Research In Motion Ltd, maker of BlackBerry smartphones and PlayBook tablet computers, may have the most to lose from Google Inc’s deal to acquire Motorola Mobility Holdings Inc.
Google’s proposed $12.5-billion acquisition would leave RIM a smaller player relative to rivals, which may force it to strike an alliance with another company or sell itself to remain competitive, said Will Stofega, a programme director at consultant IDC. With Google’s cash and software expertise, Motorola may present a direct challenge to RIM in its traditional stronghold, the corporate market, he said.
“Now that Motorola has a big war chest behind it, Research In Motion has got to watch out,” Stofega said in an interview.
Already losing market share in smartphones, RIM is seeing several competitors beyond Google and Motorola gain scale and expertise. In February, mobile phone maker Nokia Oyj struck a strategic partnership with Microsoft Corp, the world’s largest software maker. Last year, Hewlett-Packard Co, the world’s largest computer company, bought handset maker Palm Inc. Apple Inc , maker of the iPhone, briefly became the world’s most valuable company last week, though it hasn’t made major acquisitions.
RIM may need more size and software expertise to compete, said independent wireless analyst Chetan Sharma. The Waterloo, Ontario-based maker of BlackBerrys may have to sell to a company such as Hewlett-Packard, Dell Inc, Samsung Electronics Co or HTC Corp, he said.
“They are in no-man’s land at this point,” Sharma said in an interview.
FALLING SHARE
Marisa Conway, a spokeswoman for RIM, declined to comment on the record about the Google deal or the prospect of an acquisition. Michael Thacker, a Hewlett-Packard spokesman; Kim Titus, a Samsung spokesman and Jess Blackburn, a Dell spokesman, also declined to comment. HTC couldn’t be immediately reached for comment
RIM is losing market share as consumers turn to mobile phones that can run games, surf the web and handle other computing tasks. The company’s share of the global smartphone market fell to 12 per cent in the second quarter, from 19 per cent a year earlier, according to Gartner. Android became the world’s leading mobile-phone operating system over the same period, rising to 43 per cent of the market. Apple climbed to 18 per cent, from 14 per cent a year earlier, Gartner said.
RIM shares had dropped 53 per cent this year before Tuesday. The stock rose $2.55, or 10 percent, to $27.11 yesterday on the Nasdaq Stock Market.
PATENT BATTLE
RIM’s rise on Google news may indicate investors think the chances of an acquisition are increasing, said Peter Misek, an analyst with Jefferies & Co Inc. Though the company has been struggling, it has a strong base of corporate customers and valuable patents, he said.
As handset makers have sued each other over patents, intellectual property has emerged as critical asset in mobile- computing competition. A group of companies including Apple and RIM agreed to spend $4.5 billion this year to buy Nortel Networks Corp’s patent portfolio. The BlackBerry maker holds 2,033 patents, pertaining to everything from mobile security to e-mail, according to the US Patent Office.
Google said Motorola’s intellectual property was one motivation for the acquisition.
