Who Will Buy Research In Motion?

The end is nigh, Fool. Research In Motion (Nasdaq: RIMM  ) has retained JPMorgan Chase and RBC Capital Markets to perform a previously announced "strategic review." Don't be duped by the corporate speak. RIM is selling itself to the highest bidder with the help of its two bankers, which will draw fees from the transaction.

Forget the sensational rumors that Facebook (NYSE: FB  ) is interested; selling RIM won't be an easy task. On Tuesday, the one-time smartphone titan announced its second straight quarter of operating losses.

"The ongoing competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this, and likely result in an operating loss for the quarter," chief executive Thorsten Heins said in a statement.

Frankly, this isn't much of a surprise given Apple's remarkable success with the iPhone. Nor had Wall Street been expecting much. According to Yahoo! Finance, analysts believe RIM should see revenue decline 25.6% and per-share earnings drop 68.4%.

3 potential suckers ... I mean, suitors
So who would pay the minimum $5.3 billion needed to purchase Research In Motion? I've three ideas, presented here in no particular order:

  1. Nokia (NYSE: NOK  ) . Years of stinging losses at the hands of Apple and a cartel of powerful Android models has brought the one-time smartphone superstar to the brink of irrelevancy here in the U.S. and muted its presence elsewhere. Purchasing RIM would give the company a much-needed do-over in the North American market.
  2. Microsoft (Nasdaq: MSFT  ) . Nokia's partner for the well-received Lumia handset also has an interest in preserving its lead in office productivity apps, and RIM, for all its challenges, remains a leader in delivering corporate email to devices. Think of it as a bid for securing tens of millions of users who might be thinking of switching to the iPhone or Android for corporate connectivity.
  3. Oracle (Nasdaq: ORCL  ) . A less obvious choice, to be sure, but the database king is already in the hardware business on the server side. Meanwhile, corporate software (including email) is an important growth driver. Having the means to outfit an entire mobile workforce could strengthen CEO Larry Ellison's argument that he's created a one-stop shop for corporate computing.

Whoever wins the "prize" in the bidding for Research In Motion, there are far better ways to profit from the rise of mobile computing. Our Foolish tech analysts profiled one -- an up-and-coming chipmaker -- in this special report: "The Next Trillion-Dollar Revolution." The report won't be available forever, so get access today -- it's totally free.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple at the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Microsoft and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Microsoft and creating bull call spread positions in Apple and Microsoft. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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  • Report this Comment On May 31, 2012, at 2:23 AM, lovesaves wrote:

    Samsung and Cisco could also both easily absorb RIM and benefit greatly from the secure RIM enterprise platform.

  • Report this Comment On May 31, 2012, at 4:52 AM, infektu wrote:

    If somebody wants to buy it, then there's money to be made.

    Why then is everybody saying that a turnaround is not possible?

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