RIM Acquisition Have Got Multiple Road Blocks For Suitable Buyers !


Undoubtedly, RIM is struggling with best of its potential only to regain its market share but the outcome remains futile. Just a week ago, the company’s total value slipped to $7.04 billion which was lesser than its actual worth $7.08 billion. In last few months, the company has grappled with weak shipment of its products and dwindle market share due to its three days outage in October 2011. It’s the first time ever when RIM’s market share has declined by 75% since February 2011.

The predicament is continue to intense instead of drop off and that’s why the company is looking for the strong takeover aspirant without any prospective. But, the road is so bumpy that many potential buyers are still heading quite slow and precautionary. The main hurdle, that the potential suitors are facing, is stiff confliction from its executives—Mike Lazaridis and Jim Balsillie – who own more than 10% of the overall shares in the company and makes them the largest shareholder. It’s quite clear; even after procrastinated merger of the company, both executives will remain tall and play the same roles as they had played earlier. However, The takeover with such adjustment won’t benefit the suitor by anyhow if both executive will be remained the decision maker of the company and continue the execution in the same manner which deceased RIM for current situation.

Recently, Canadian prime minister stated in a conference that RIM is an important Canadian company. However, The same Canadian government plays the role of a greatest barricade for foreign investors to buy the major domestic corporations.

With all such rumors, speculations and predictions, RIM official has strictly uttered that they are not going to comment anything against the “rumors and speculation” that has prevailed in the market.

Despite of intense condemnation, the company is still the most favorite preference for the security conscious users—including law enforcement agencies and financial services companies. Then why should RIM worry when still there are almost 75 million worldwide users hanging with sinking ship ? The company should be concerned in perspective of the large share erosion in the most part of the world especially in North America where RIM’s has succeeded to earn $1.29 billion in the last nine months of this year.

The executive of RIM as well as Amazon have been seen with each other. The situation evidences a serious discussion in progress between both the companies. Previously, Amazon had endeavored to merge the company but unfortunately the discussion didn’t materialize. Amazon has already planned to market its smartphone next year and the partnership with RIM might be evocative.

In present scenario, the most appropriate potential suitor for RIM is expected to be a Chinese Cellphone manufacture—ZTE. The reason is obvious; the Chinese company has acted a role of contract manufacturer for many branded companies. The company is fourth largest handset manufacturer in the world according to IDC but it has weak hold outside Asia especially in North America and Europe. The advantage of this takeover is that another brand name will tagged into ZTE portfolio which might provide global exposure to the Chinese giant. However, the Chinese company has already announced to produce its own high-end phone and western countries are at target.

Although, RIM has lack of significant presence in Chinese market but it has stronghold in western market. The company’s amalgamation with ZTE might prove fruitful for both to dominate worldwide. But before inking the deal, RIM should think about the Chinese conservative mentality and commanding execution style which could be another big challenge to over come.



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