Following reports of another restructuring and round of layoffs, BlackBerry has issued a statement warning that its first quarter looks bleak and that it has hired bankers to "explore its options." (See Report: RIM to Cut 2,000 More Jobs .)
RIM CEO Thorsten Heins halted trading of the company's stock just after the market closed Tuesday to announce that he expects a first-quarter operating loss as RIM's competitors and "highly competitive pricing dynamics" continue hurting sales at BlackBerry maker. Financial performance at the company will continue to suffer for the next few quarters, he said. Layoffs and spending reductions are afoot, but Heins added that RIM at least expects to increase its cash position from the $2.1 billion it had at the end of fiscal 2012.
Heins also revealed that RIM has been working with RBC Capital Markets and JP Morgan to help it evaluate its next steps, which could include a partnership for the BlackBerry platform, licensing it or "strategic business model alternatives." (See RIP RIM: Will Foresight Be 20/20?)
RIM didn't elaborate, but many suggest the most likely alternative is an outright sale of the brand, a possibility Heins hasn't ruled out in the past.
The news caused RIM shares to slide another 13 percent in after-market trading Tuesday to $9.77 per share. They've already fallen nearly 80 percent over the past year.
A sale of RIM would be no surprise--the writing has been on the wall for sometime. Any ideas/suggestions on who might want to pick up the pieces--and WHY?
Hiring bankers to "explore options" is never a good sign. At <$5, one can easily see a private equity coming in. Their phone business may be abysmal, but they still make money from pushing e-mail and there's also QNX.
Facebook? Don't think they want to end up being a mere app on smartphones. If I were them, I might sniff around RIM. Plus, they do have a few billion to spare now. Would prefer Nokia though, more phone models and whatnot.
I dunno... kids do use BBM. Also, I read somewhere where it states that the younger generation think of the iPhone as being for 'old' (over 30?) people. Plus, I'm sure FB can leverage their brand to make things cool.
FB needs to tap the 'adult' and business segment - those with more spending power.
But it's not so easy to get into the smartphone space, such HW & SW integration requires both skill and experience.
Kids like BBM for sure, super cheap way to text yer brains out. If RIM was on top of this they might consider a funky, stripped-down device for this market. Carriers aren't wild on BBM though, as you might imagine, so there's a tension there.
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