Research in Motion could be next mobile giant to adopt Windows Phone

By Graeme Burton
02 Jul 2012 View Comments

Research in Motion (RIM), the troubled maker of BlackBerry mobile devices, is considering an alliance with Microsoft, according to reports on Reuters newswire.

The suggestion coincides with a wide-ranging review of the company and its activities following a sharp fall in sales and profits. The review is being led by banking groups JP Morgan and Royal Bank of Canada, and is intended to "evaluate the relative merits and feasibility of various financial strategies, including opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives," according to a statement released at the end of May.

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However, while licensing Windows Phone 8 from Microsoft remains an option, the board of RIM would prefer to complete the development of the latest iteration of its mobile operating system, BlackBerry 10, according to Reuters. Its launch, though, has been postponed to early 2013, more than a year later than originally planned.

The company needs BlackBerry 10 to enable it to compete more effectively against Apple's iOS and Google's Android operating systems, and to reinvigorate falling sales.

Executives will also be mindful of the precipitous fall in revenues and profits experienced by Nokia after it adopted Windows Phone in preference to its own Symbian series of operating systems and Google Android.

Microsoft might be tempted to take a stake in RIM and a cross-licensing deal in return for adoption of Windows Phone. Such an offer might appeal to the company if sales continue to decline – or it could adopt Android.

In its most recent quarter, it reported a revenue decline of 43 per cent to $2.81bn. But unlike Nokia, RIM is not currently burning cash – although that may change over the next year – holds no debt and also reported subscriber growth in all regions apart from North America.

Other options on the table include spinning off the hardware business to focus on its proprietary network, which provides a secure messaging service for government and corporates.

BlackBerry phones boomed in popularity – and notoriety – in the 2000s as a key tool for business executives. As prices dropped it also became a favoured low-end communication device, thanks to its free-to-use BlackBerry messaging.

However, BlackBerry has been eclipsed in the past two years; first by Apple iPhones, which are regarded as more desirable by well-heeled executive customers, and by Android-based phones at the lower-end.

More recently, corporate and government customers have started to shift from BlackBerry due to the wide-ranging software eco-system that iOS and Android offers, and the ease with which apps can be developed for them.

RIM's response to the popularity of such devices, the BlackBerry Storm, proved a widely criticised failure, while its co-founders and twin-CEOs – Mike Lazaridis and Jim Balsillie – worked out of separate offices and met too infrequently to thrash out a united corporate response to the burgeoning threat of Apple and Android.

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