Vertical integration works in the Japanese car industry, so why not in Canadian telecommunications?
Smartphone designer Research In Motion
I don't think the phone giant would have bought this outfit under happier circumstances. The company's strengths lie in hardware, and software sales account for just 3% of the company's sales. And Chalk's business has been eroding over the past few years. The little company has never made an annual profit, and sales have fallen from about $4.2 million in 2005 to $1.6 million in the last four quarters.
The sale price for the whole kit and caboodle is $23 million Canadian, or about $18.5 million in American cash. On top of that, RIM is lending $2.2 million Canadian to its beau just to make sure it can survive until the wedding date. That's why I think of this deal as a bailout.
Research In Motion certainly needs all the business heft it can muster these days. With the global economy locked in a death-defying dive and competition from newcomers like Google's
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