RIM considers Microsoft partnership and other last ditch options


Research in Motion may have to make some hard choices. Reuters reports that three anonymous sources from within RIM claim the company is considering drastic changes in strategy after revealing that BlackBerry sales had fallen 33 percent in the last three months. RIM may be considering partnering up with Microsoft for Windows 8 or selling its network technology to other smartphone makers.

Yesterday, RIM announced its first quarterly loss in eight years, selling only 7.8 million BlackBerries, down from 11.1 million in the three months prior. Five thousand job cuts and another delay of BlackBerry 10 until early 2013 were also announced. Before he was fired earlier this year, former co-CEO Jim Ballsillie was attempting to open up the BlackBerry network to Android, iPhone, and other competitors, allowing BlackBerry’s core apps to work on any handset, possibly for a fee.

 Microsoft CEO Steve Ballmer is rumored to have approached RIM, offering to work with it on Windows Phone 8 in a deal similar to the one it made with Nokia. This option is somewhat attractive since Microsoft would likely offer millions (possibly billions) of dollars in aid, but the board does not like it because RIM would give up its technology independence. Also, it probably realizes that, despite Microsoft’s help, Nokia hasn’t turned things around yet.

What is the best option for RIM? We’re not sure there is one. With another delay in BlackBerry 10, it will likely be a year and a half between the release of BlackBerry 7 and the new BlackBerry 10. We’re not entirely surprised by this delay. I recently tried out BlackBerry 10, but it was evident that the software was far from complete. It seemed nowhere ready for release in a few months. Things aren’t looking good for RIM, and as Andrew said yesterday, the situation is now “facepalm-bad.” A few months back we argued that there might still be hope for BlackBerry. Since then, things have gone from bad to worse.