02-14-2005, 05:32 PM
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| | [02-14-2005] BlackBerry : Riped for Picking?
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Nokia. Microsoft. Motorola. Hewlett-Packard. IBM. |
These giants of tech and telecom have all been named over the past two years as possible acquirers of Waterloo-based Research in Motion Ltd., whose immensely popular Blackberry email and mobile phone combo has made it an investment darling and rumour magnet.
The Wall Street Journal, citing recent analyst reports and the tremendous growth of Blackberry sales, asked three weeks ago whether RIM, Canada's largest technology company by market valuation, will soon get scooped up by a major handset or software maker looking to tap the growth potential of wireless email, particularly in the corporate world.
It's not difficult to envision. The Blackberry business looks sweet and juicy as it dangles from its vine, seemingly begging to be picked. "We could see the same incredible growth we've seen from RIM over the last five years in the next five years," says Barry Richards, a wireless analyst with Paradigm Capital Inc. in Toronto.
RIM is expected to close its 2005 fiscal year this month with more than 2.5 million Blackberry subscribers, and some industry experts say the company could double that number within a year if product introductions in Asia and its new 7100 line of smart phones gain traction. Early indication is that sales are booming.
That tantalizing growth may be too difficult for others to resist. Kona Shio, an analyst with Conscius Capital Partners in Montreal, gives a RIM acquisition a 50-50 probability.
The question is: Would the berry quickly spoil once plucked from the vine that nurtured it?
Jim Balsillie, co-chief executive officer of RIM, won't comment directly on acquisition rumours. But in an interview with the Star he did go into great detail to explain why Blackberry just wouldn't taste the same if tossed in a bigger company's fruit basket.
In essence, RIM's very success is based on the notion that it's a non-threatening partner — a business enabler — in an industry full of companies that despise or, at the very least, are suspicious of each other.
"We've tried to build a company that serves the needs of the wireless carriers and the chief information officers (of large organizations), and in the process we have also partnered with application guys and the device guys to better service those two constituencies," explains Balsillie.
"That's how we built our company, and that's how we think. Has that made us friends of the carriers, rather than competitors? Yes. Has that led us to be partners of the large device companies? Yes. Are we sitting in a very carefully balanced set of roles? Yes."
RIM's biggest asset may be that balancing act itself, the ability to walk an industry tightrope that has led others to fall and that the big guys would rather pay to see than do.