Research in Motion (RIM) has sold its cloud services company NewBay to Synchronoss Technologies at a considerable loss, just a little more than a year after purchasing it.
RIM's purchase of Irish software company NewBay for $100m in October 2011 originally met with come scepticism in the markets. Analysts wondered whether the troubled Canadian BlackBerry manufacturer was trying to play a game of catch-up with the likes of Apple, Amazon and Google in the mobile services market that it was never going to win.
Now it seems that the sceptics may have been right. Over Christmas RIM sold NewBay to mobile content management firm Synchronoss Technologies for $55.5m (£34.6m) – a little more than half its original purchase price.
So far RIM has remained tight-lipped about the deal, but with investors, businesses and consumers eagerly anticipating the release of a new range of BlackBerry smartphones and the BB10 operating system later this month, every move that the firm makes is inevitably being picked over for meaning.
It could be that RIM is consolidating its resources, pooling funds for the launch that most see as being make-or-break for the company. Or it might be that RIM is cutting out anything not immediately relevant to its desire to return to its core function of secure mobility for business, as suggested by Computing when the rumour broke in August. Whatever the reason, the fact that the sale lost money will be a source of concern.
For Synchronoss the deal makes a lot more sense. The company's technology allows customers to connect, synchronise and activate connected devices and services across the cloud.
"By adding NewBay's technology assets and millions of subscribers, this transaction further establishes Synchronoss as the clear leader in providing cloud-based mobile content services for mobile operators around the world. By combining our strengths, Synchronoss will deliver the most comprehensive, scalable and secure cloud platform, and we will significantly expand our early market share leadership position," said Stephen G Waldis, CEO of Synchronoss, in a statement.
With the NewBay acquisition Synchronoss will be expanding into Europe with clients such as Vodafone, Orange, Swisscom and T-Mobile, plus American carrier US Cellular and Asia/Pacific firms LG Electronics and Telstra.