Microsoft, RIM Rumors Intensify as Stock Plummets

Dennis Faas's picture

As Research in Motion (RIM) stock continues its free-fall, speculation about a possible acquisition of the Canadian company by Microsoft persists.

RIM insists it remains a profitable firm; however, recent criticisms of the company's strategy have experts wondering if the firm needs a little help moving forward.

"RIM's business is profitable and remains solid overall with growing market share in numerous markets around the world and a strong balance sheet with almost $3 billion in cash," said Jim Balsillie, RIM's co-CEO, in a recent presentation.

"We believe that with the new products scheduled for launch in the next few months and realigning our cost structure, RIM will see strong profit growth in the latter part of fiscal 2012." (Source:

RIM Opportunities Squandered, say Critics

Morgan Stanley analysts recently scolded the Waterloo, Ontario company for bungling opportunities to enter several lucrative markets in recent months.

"We believe RIM has now squandered nearly every opportunity and competitive advantage it enjoyed through ineffective research and development resource management, delayed product launches and misreads of the competitive environment."

Such criticisms have led to new a new report from Bloomberg that either Microsoft or well-known hardware producer Dell may be interested in buying up RIM and setting it back on course.

RIM Still Full of Potential

Toronto-based analyst Paul Taylor of the Bank of Montreal (BMO) Harris says he thinks an investment in Research in Motion could lead to a big payoff for either company.

"Given how significant the deterioration of the stock price has been, that alone will cause interest," Taylor said. "RIM still has meaningful market share in the U.S. and meaningful market share internationally, and RIM has an iconic brand."

Some experts don't see a deal happening, however. Computerworld blogger Preston Gralla thinks Microsoft probably isn't interested in a company like RIM because the latter is so dedicated to a non-Windows platform.

"I don't expect Microsoft to purchase RIM," Gralla said. "One issue is that Microsoft seems wedded to a Window-everywhere strategy, and RIM doesn't fit into that." (Source:

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