Research In Motion's stock price jumped by as much as 10% Tuesday on reports that Samsung was looking to acquire the maker of BlackBerrys. Too bad for RIM, that's just not in the cards.
"We haven't considered acquiring the firm and are not interested in [buying RIM]," Samsung spokesman James Chung said to Reuters. Samsung also noted that the company has not been contacted by RIM co-CEO Jim Balsillie about either an acquisition or a scenario in which Samsung would license RIM's smartphone software.
Samsung aside, RIM may be exploring options, as it has reportedly hired Goldman Sachs to help it determine its next steps. But what are those options?
First, RIM can move ahead with its current plans. Those include bringing PlayBook OS 2.0 to market by the end of February; launching a seven-inch PlayBook 3G+ in April; launching BlackBerry 10 and associated handsets in September; and capping off the year by launching a 10-inch PlayBook tablet.
[ RIM's leadership needs to take a look in the mirror at its own mistakes. See RIM's Board As Bad As Its CEOs. ]
This seems like a workable strategy, but its likelihood of long-term success with BlackBerry 10 is looking bleaker by the moment. Here's why.
"The smartphone software battle in the consumer space has narrowed to a two-horse race (the hopes from Nokia/Microsoft to expand this to three notwithstanding) between Android and Apple," said Craig Cartier, an analyst for the ICT practice at Frost & Sullivan, in a note sent to media. "It will be a monumental task for RIM on its own to establish itself as a legitimate third (or fourth) alternative at the same scale as these players."
The reason? Apps. Between Android and iOS, there are more than one million active applications available for download. BlackBerry 10 will be a brand new operating system when it launches. While it will be rooted in RIM's PlayBook OS, QNX, and BlackBerry 7.1, it will start off with an anemic selection of applications, with little hope of ever catching Android and iOS. Just look at Microsoft. It has more than 50,000 apps available to its Windows Phone platform and the smartphone operating system still hasn't gained much traction with consumers, enterprises, or developers. RIM will effectively be starting at zero.
Another option? Give up, sort of.
GDGT.com's Peter Rojas believes that RIM should can BlackBerry 10 and instead license Android or Windows Phone.
"It's time for RIM to abandon BlackBerry 10 and adopt either Android or Windows Phone," argues Rojas. "It doesn't matter that PlayBook 2.0 received some better-than-expected press coverage at CES last week, or that there have been some interesting hints here and there about what the first phones running RIM's new mobile OS will look like ... Even if RIM started shipping phones tomorrow with an OS that could hold a candle to iOS, Android, and Windows Phone, it probably wouldn't make much of a difference. RIM would still be in very serious trouble."
He continued, "Why? Because the market has coalesced around iOS and Android, and the network effects (primarily, but not only, around apps) those two platforms have created is proving difficult for even a worthy competitor like Windows Phone, which has already been available for over a year, to gain market share."
Rojas' point of view matches that of Frost & Sullivan's Cartier and I am prone to agree with both.
Other options facing RIM? It could sell its handset business, or try to license its software and/or BlackBerry Enterprise Server services to other hardware makers, which Cartier thinks is a good option.
"If Samsung (or any other Android partner) were to integrate RIM's enterprise services like BlackBerry Messenger into their offering, they would achieve instant differentiation in the increasingly monochrome Android space," said Cartier. "Not to mention gaining a brand which, despite its recent misfortune, still enjoys a loyal following and has seen recent gains in developing markets globally."
One thing is for certain. RIM needs to pick a direction and then go with it 100%, despite the fact that it is hard to say at this point which one will be the best course.
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