Who Should Buy RIM?

The past few months have not been kind to Research In Motion. On August 5, Eric Jackson of Ironfire Capital predicted that the company would need a buyout by early 2013. Since that time, the company's stock has rebounded a bit, likely due to the recent announcement of new handsets and a new BlackBerry Management Center for small business. But if the BlackBerry maker did go up for sale, which of today's tech giants would be best suited to the acquisition?

As the recent failure of HP's Palm buyout demonstrates, successful tech mergers require more than just capital. They demand a good match. A failed merger could mean the end of RIM, and that would be bad news for businesses that depend on the company's technology. To make the most of a potential merger, the acquiring company must be the right match for RIM's technology, for its customers, and for the future potential of its patents.

There's no shortage of speculation over possible buyers for RIM, and the two most common names that pop up are, of course, Google and Microsoft. These are good guesses, and you don't need to be a tech industry or Wall Street analyst to put these two behemoths at the top of your list. In fact, if you walked out onto the sidewalk and asked any random stranger who they think should buy any given tech company, be it Apple, Twitter, or Facebook, the answer you'd get would almost certainly be Google or Microsoft. Of course, obviousness doesn't make these propositions wrong, and some good minds have offered sound reasons for advancing these two companies as suitors for a flailing RIM.

Back in June, Boston-based venture capitalist Richard Dale suggested Google as the best fit.

"Google could get the patent portfolio to allow them to use (or better, out-license) that great keyboard, instead of the crappy one on, say, the Motorola Droid slide-outs," Dale wrote in a commentary for CNNMoney. "Google could even choose to spin off the hardware altogether to a handset manufacturer (HTC?), to reap the benefits of getting Android onto the platform but avoid competing with their channel."

Last month, over in the Crackberry camp where the love of RIM runs deep, blogger Kevin Michaluk offered 10 reasons Google will buy RIM. Among those reasons: QNX would make a good kernel for Android, RIM has lots of neat patents, the BlackBerry enjoys deep enterprise penetration, and "Canada is nice." While it's clear Michaluk was stretching to reach 10 bullet points in his commentary, some of his reasons are pretty compelling.

Speaking for Microsoft advocates, PCMag's Peter Pachal pointed to Steve Ballmer's attendance at BlackBerry World in May as possibly pointing to a Microsoft buyout. "Microsoft has been very aggressive in the mobile space, pushing Windows Phone 7 hard and forging an alliance with the top handset maker in the world, Nokia," Pachal said. "Despite device sales that are probably not that great (and some are calling 'catastrophic'), Microsoft is serious about making WP7 a success, and it's clearly playing the long game of mobile platforms to win."

But Microsoft and Google aren't the only players that could pounce on a vulnerable RIM and make the most of it. Cameron Kane of the investment site SeekingAlpha has proposed Dell as a worthy suitor, though it's hard to imagine Dell taking on something as uncharacteristically platform-centric as a RIM buyout, particularly after a similar move proved so catastrophic to HP.

In an interview with InformationWeek.com, Current Analysis research director Avi Greengart proposed some more interesting possibilities, and discounted the idea that Google or Microsoft would make the play. "Microsoft and Google do not need the headache of managing a completely separate ecosystem, and Microsoft doesn't need RIM's IP," Greengart said.

"The only companies I could see interested in taking on RIM as-is are Samsung--which has articulated a goal of getting more enterprise mobility business and already has experience managing multiple operating systems--and Chinese vendors such as Huawei, ZTE, or Lenovo, who would want it for market access and brand--but could run into problems with North American government approval for the sale for security reasons," said Greengart.

The idea of Samsung buying RIM seems particularly compelling. Given the company's ongoing patent war with Apple, acquiring RIM could arm the company with a large enough pool of intellectual property to push Apple back, and it would give the company an instant in with the enterprise world.

Ultimately, though, Greengart doesn't really believe RIM needs a buyout. "I don't think it has to be anyone, frankly. RIM's sales are down overall and its platform is clearly losing steam, but the company is still extremely profitable and sales in certain markets are actually growing rapidly. RIM needs to complete the transition to QNX and provide a rationale why consumers and enterprises should buy those QNX devices (reaching parity with Apple and Google on user interface is not enough), but it does not need to find a buyer," Greengart said.

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