Why we predicted RIM splitting back in May 2011

One of the latest rumors making its way around the blogsphere is that RIM is going to split into two businesses, one that will sell Blackberry devices and one that will sell the secure Blackberry messaging service.

The article reporting this rumor is sour on the idea, thinking that neither business can survive without the other.

At Grizzly Analytics, however, we've been predicting this split since May, 2011.  Moreover, we think it's a good idea.

What made us think that RIM is considering this? One indication was their acquisitions of Gist and Tungle in early 2011.  Each of these companies has technology for integrating contact and calendar data (respectively) across different devices. These acquisitions would make no sense unless RIM was targeting integration with other devices.

Another indication was comments by a RIM Vice President in January 2011 that RIM was working on a cloud version of their secure service, that can operate without positioning servers inside enterprises.  The VP also commented that they were considering offering their device management services on devices from other manufacturers.

Most of all, the bottom line in the market is that while enterprises trust Blackberry security more than any other device management or messaging system, executives are less and less willing to use Blackberries instead of iPhones.  And RIM has not yet convinced anyone that they can compete device-on-device with Apple or Samsung.

If RIM can deliver its secure device management and messaging, with enterprise-grade security, on iPhones and Android devices, they're likely to cement their position in the enterprise.  At that point, we see their service unit as a likely acquisition target, both by Apple (who's been trying for years to break into the enterprise) or by any number of others.

At the same time, their devices unit can probably keep a reasonable position as a niche-market unit.  They'll never regain their grandeur, but that grandeur is probably lost in any case.

Bottom line, splitting into two units might be a great way to cement their enterprise leadership in the era of the iPhone and Android.


No comments:

Post a Comment