(By Ron Haruni) According to media reports, Research In Motion (RIMM)
is looking to sell some of its recent acquisitions, including cloud
services provider NewBay that the struggling smart-phone maker bought
last year, as part of the company's broader efforts to restructure its
operations.
Faced with an ever increasing competitive landscape, RIM, the
Blackberry smartphone manufacturer, acquired NewBay in October 2011 for
about $100 million. NewBay reportedly had over 80 million subscribers
for its white-label content services when it was acquired. However, the
unit, which deals with network operators including Deutsche
Telekom, AT&T (T) and Verizon Communications Inc. (VZ), was seen as a
relatively small player in the Cloudsphere and a late entry by RIM into
cloud computing.
"RIM is coming later to market than competitive offerings" from
Apple's iCloud, Amazon.com's (AMZN) Cloud Drive and services from Google
(GOOG), RBC's Mike Abramsky wrote at the time in a note to clients.
Earlier this year, RIM, which is amid a restructuring process, sold
the email services provider Alt-N Technologies Ltd., acquired in 2009.
As part of this restructuring the company hired investment banks RBC
Capital Markets and J.P. Morgan (JPM) to explore options, including the
sale of the company, as management seems to be unsure about its future
prospects.
RIM recently announced unprecedented job cuts totaling 5,000 by fiscal 2013, about a third of the current total staff.
The struggling Canadian smartphone maker, whose nightmare continues
ever since Apple's (AAPL) iPhone hit the market, is making matters worst
by continuing to delay the launch of its BlackBerry 10 software based
handset, thus further aggravating the stagnancy factor in its product
portfolio. Its share of the global smartphone market fell to 4.8% in the
2Q from 12% y/y.
While RIM still has more than $2 billion in cash and is debt-free, it
reported in June highly disappointing Q1 2013 financial results. The
company said it lost $0.37 a share, more than 5x what the Street had
predicted. RIM also failed to provide any specific time frame when the
stock's plunge will ultimately end. (RIMM) is down almost 95% from its
mid-2008 high and the shares have fallen more than 60% over the course
of the last year alone, putting the co.'s market cap at $4.28bln/$8.29
p/sh.
Meanwhile, according
to a report by Bloomberg on Friday, RIM's enterprise-services
unit, seen as the company's most valuable asset, has attracted the
interest of International Business Machines Corp. (IBM). IBM is said to
have made an informal approach about possibly acquiring the division,
which operates a network of secure servers used to support RIM's
BlackBerry devices.
The business may be valued at $1.5 billion to $2.5 billion depending
on the mix of assets included, according to Bberg, citing Berenberg
Bank.