RIM to Split as Part of its Restructuring Plans BeginVW Staff
The BlackBerry maker Research in Motion Limited (TSE:RIM) (NASDAQ:RIMM), is reportedly considering splitting according to reports from CNET. The split will see the company separate its handset business from its messaging business, along with the sale of the former. The company has been looking for advice on how to deal with its struggling BlackBerry hardware business, and engaging several strategic advisers in the process.
The report quotes remarks from other sources suggesting that Facebook Inc. (NASDAQ:FB) and Amazon.com Inc. (NASDAQ:AMZN) have been potential strategic partners for RIM in its attempt to find a solution for BlackBerry, which would involve selling the hardware business to either of them. There is also a possibility of the company avoiding a split, but it would have to sell a big chunk of its holding to Microsoft Corporation (NASDAQ:MSFT), the report notes.
Nonetheless, RIM declined to comment on the details for the future of its BlackBerry business, albeit reiterating its pursuit for a wide range of options.
- A representative from the company is quoted saying, “RIM has hired advisers to help the company examine ways to leverage the BlackBerry platform through partnerships, licensing opportunities, and strategic business model alternatives.”
- He also said, “we believe the best way to drive value for our stakeholders is to execute our plan to turn the company around.’ This remains true.”
RIM has struggled to recoup back its lost market share in the smartphone industry, which is now dominated by Samsung and Apple Inc. (NASDAQ:AAPL), and has also been undertaking backroom layoffs after its revenue dropped by a massive 25% resulting into a net loss of $125 million for Q4, 2011. The First Quarter in 2012 was no different after the company announced that it expected to make a loss.
RIM has engaged JPMorgan Chase & Co. Ltd (NYSE:JPM) and RBC Capital about its restructuring process in which, it expects to save approximately $1 billion by the end of current financial year. The restructuring process also involves coming up with strategic business-model alternatives or exploration of a potential sale.