Research In Motion (RIM), the Canadian manufacturer of the once immensely popular Blackberry smartphone is supposedly being arm-twisted by circumstances to consider deals that may compromise the company’s best interests. The possibilities include selling a majority stake in the company’s hardware business or associating with Microsoft in an effort to undo the damage and prevent future decline in brand trust after a further delay in the release of its next line of smartphones.
After the announcement that Blackberry 10 smartphones would be released only in early 2013, shares of RIM took a hit and dropped nearly 18%, reducing the stock value to about 30% of what it was last year. This announcement effectively postpones the release of the awaited smartphones by at least a year. The consequence of this delay is that RIM might be forced to go against the business strategy it has adopted so far, according to sources who have requested to be anonymous as the information is very confidential.
One of the possible courses of action for the company is to adopt the operating system developed by Microsoft, Windows Phone. Windows Phone 8 has only recently been released in the market and is currently in use by top manufacturers like Nokia and HTC through specific agreements which allows for using the software giant’s OS on their devices. It is rumored that Microsoft CEO Mr. Steve Ballmer has already met with RIM to strike such a partnership. If this deal does go through, it would also levy the responsibility of buying a stake in RIM on Microsoft, the proceedings from which can be used to market the Blackberry devices. While this option is seemingly beneficial for the Blackberry brand, it is quite unlikely as it will result in a loss of independence for the company.
The other possibility for RIM is to sell a share in its proprietary network, the one that made it globally popular, to a third party operator. The result would be that other smartphone platforms would be allowed to access it and offer high security e-mail services. This could relax the financial burden on RIM but it will mean an end to the Blackberry devices as they stand today. The best way out for RIM is to work around this possibility without giving up too much of its existing infrastructure to competitors.