Unnamed sources “close” to BlackBerry maker Research in Motion (TSX: RIM)dismissed as a “silly fantasy” a story by The Sunday Times of London claiming that the company was considering splitting its hardware and network services groups in to separate businesses.
<a href="http://www.itbusiness.ca/it/client/en/cdn/News.asp?id=68054"The report, behind a pay-wall, was cited in numerous mainstream news stories. The newspaper didn’t identify the sources for its assertion that RIM was thinking of separating the two businesses or selling a stake in the company. It also claimed that Amazon and Facebook as potential buyers.
One called it a “silly fantasy,” another “one of the most ridiculous ideas I have heard in a while,” according to this report.
And now RIM apparently has issued a statement, though not posted on its website, also denying the rumor. MobileSyrup’s Ian Hardy got this response from RIM: “RIM has hired advisers to help the Company examine ways to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives. As Thorsten [RIM CEO Thorsten Heins] said on the Company’s fourth-quarter earnings call, ‘We believe the best way to drive value for our stakeholders is to execute on our plan to turn the company around.’ This remains true.”
RIM sales have plunged over the past two quarters and continue to do so. The company will be releasing a new operating system, now called BlackBerry 10, along with the first smartphones to run it later this year, perhaps as early as this fall. The new OS has received good grades from developers and users.
Research in Motion on Monday reiterated its commitment to turning the company around, even as a report said RIM could be planning to split off its BlackBerry smartphone division.
The Sunday Times of London said companies such as Amazon or Facebook could buy the struggling BlackBerry business to separate it from the RIM messaging network. Or, RIM could sell a stake in its overall operation to a big tech company like Microsoft, the report said.
RIM is reporting its first quarter results this coming Thursday, and CEO Thorsten Heins said in May that the quarter would likely show an operating loss. Last week, RIM said it was beginning to make job cuts to achieve an earlier-stated goal of cutting $1 billion in costs by the end of the 2013 fiscal year.
While Waterloo-Ontario-based RIM did not comment directly on the Sunday Times report of a possible sell-off of BlackBerry, it issued a statement saying it was continuing plans to turn the company around. The smartphone make earlier said it had hired J.P. Morgan and RBC Capital Markets to review its strategies.
“RIM has hired advisers to help the Company examine ways to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives. As Thorsten said on the Company’s fourth-quarter earnings call, ‘We believe the best way to drive value for our stakeholders is to execute on our plan to turn the company around.’ This remains true.”
RIM in March reported a net loss of $125 million in the fourth quarter of 2012, along with a 25% year-over-year decline in revenue to $4.2 billion. IDC reported that 9.7 million BlackBerry smartphones shipped in the first quarter of 2012, a decline from 13.8 million that shipped in the first quarter of 2011.
RIM shares are down by two-thirds over the past year, and were at $9.84 a share shortly after opening Monday on the TSX exchange. By noon ET, the share price had dipped to $9.09.
With files from Matt Hamblen.