I'm not trying to beat a dead horse, but the lively discussion last week about whether BlackBerry (Nasdaq: RIMM; Toronto: RIM) might be an acquisition target makes it worth our while to take another look at the company's near-term future. (See: RIM's Struggle to Succeed.)
In case you missed the newsfeed or some of the comments in our recent post, RIM has attracted a few big-name suitors. Amazon.com Inc. (Nasdaq: AMZN), which is selling its Kindle Fire tablet and Kindle e-readers in several parts of the globe, reportedly has been sniffing around. Microsoft Corp. (Nasdaq: MSFT) and Nokia Corp. (NYSE: NOK) also flirted with the idea of buying RIM, according to the Wall Street Journal. And there have been reports that RIM executives approached other smartphone makers, including High Tech Computer Corp. (HTC) (Taiwan: 2498) and Samsung Electronics Co. Ltd. (Korea: SEC), about licensing its operating system.
There is no story yet. It's not clear how extensive the conversations were or even how far they went, but speculation says a RIM purchase may require more restructuring effort than any likely buyer would want to take on.
With a dose of 2011 hindsight filtered through the recent headlines, what could 2012 mean for RIM? Here are the potential scenarios that are worth considering:
- Nothing happens. RIM stubbornly stays its course and continues the downward spiral we saw play out in 2011. Multiple reports have said that executives would prefer to fix the problems on their own. In my opinion, this muddle-through strategy is unlikely to succeed.
- RIM innovates. Under this scenario, I would expect RIM to dedicate additional resources to revamping its BlackBerry line to make the products more competitive and deliver something global customers want to retain. This may be unlikely, since the company is delaying its 2012 product launch. But executives have said they are analyzing the entire company and will leave no stone unturned. Maybe there's hope still hidden under one of those rocks.
- Management changes. The board steps up, makes some serious leadership changes, and provides clear strategic focus. Some observers have wondered out loud why RIM's board has remained on the sidelines and has not revamped an organizational chart that features two co-CEOs and two chairmen. You would think having your co-CEOs make it on to a list of the worst CEOs of 2011 would provoke at least some change.
- RIM breaks up. The board sells off parts or the whole business to companies looking to expand their smartphone or tablet offerings. Or a private-equity firm offers a buyout and promises a core-rattling turnaround. Again, this would depend largely on knowing what RIM and its portfolio are worth and evaluating how different assets would strengthen a platform, planned or otherwise.
- The BlackBerry patent is licensed. RIM could license its valuable BlackBerry patent (CIOs still value the secured corporate messaging system) and make a profit on its intellectual property. RIM is putting a lot of faith in its QNX/Blackberry 10 OS, but software development glitches have led to product delays. If the software hits the market too late in 2012, it could put RIM at risk of becoming irrelevant in the market.
- Bye-bye, RIM. This company runs the risk of collapsing and fading into high-tech institutional memory. I don't suspect this will happen very soon, or at least not in the next year. Though it's just a glimmer of a sliver lining, the company reportedly has about 75 million subscribers worldwide and earns nearly $1 billion in quarterly services fees. It would take time for those figures to wither to zero.
What other scenarios might play out for RIM in 2012? Tell me in the comment section.