Microsoft purchase of RIM nice to consider, but unlikely

Speculation that Microsoft will purchase RIM is unlikely untrue, though there would be some benefits to the deal for both companies.

Rumors that Microsoft may purchase BlackBerry maker Research in Motion are likely just that because of RIM's high price tag, though there would be benefits for both parties if a deal were struck, analysts said Friday.

Michelle Warren, a senior analyst for Info-Tech Research Group, sent out a note Thursday on industry speculation that Microsoft is in discussions with RIM, observing that the deal would give Microsoft ammunition to compete in the consumer device market against Apple.

It also would position them well to fight any wireless strategy from Google, which has been buying up dark cable networks and is expected to make a big move in wireless communications in the next year or two, she said.

"I think this makes sense basically because Microsoft has to do something different to order increase market share in the overall IT market," Warren said in an interview Friday. "They have to do something disruptive and eye-catching, and this speaks to their marketing positioning and future expansion plans."

Microsoft has achieved a fair amount of success with its latest mobile OS, Windows Mobile 6, and has identified the mobile device space as an important one for the company's growth and revenue diversification going forward. Buying RIM would counter its current weakness in developing hardware for its mobile OS, Warren said.

RIM would gain Microsoft's brand power and also engineering expertise for one of BlackBerry's competitive differentiators. Business users find a BlackBerry's ability to communicate with Microsoft Exchange Server for mobile e-mail an attractive feature. Microsoft also makes this option available in Windows Mobile. Synching up with Microsoft would allow the company to enhance this capability faster and more efficiently, Warren said.

Neither Microsoft nor RIM would comment Friday on the possibility of a deal.

Despite the advantages of a Microsoft-RIM merger, the deal just doesn't make economic sense, other analysts said Friday. To them, it's not even a remote possibility Microsoft would pony up more than the US$47 billion in market cap RIM currently has to buy the vendor.

"I just don't see it," said Matt Rosoff, an analyst with Directions on Microsoft in Kirkland, Washington.

He acknowledged he was surprised by Microsoft's purchase of digital advertising services firm aQuantive for US$6 billion, and so also could be mistaken in the case of RIM. However, it isn't likely that Microsoft, for which the aQuantive deal was its largest to date, would shell out much more than a few billion to purchase a company.

"A RIM deal would be larger by an order of magnitude," Rosoff said. "I just don't see Microsoft making that size of acquisition."

He added that some kind of strategic alliance between the two, which currently compete head to head in the mobile OS space, would be more likely. "A multiyear partnership agreement, where some money might change hands but we'd never know how much," would make more sense, Rosoff said.

Roger Kay, president of market intelligence firm Endpoint Technologies Associates, agreed that Microsoft likely won't make a purchase that large. He also noted that although Microsoft has become increasingly "more comfortable" with developing consumer hardware -- with products like the Xbox 360 gaming console and Zune digital media player on the market -- there could be thorny competitive issues with mobile device makers that license Windows Mobile if Microsoft begin making hardware for this market.

Join the PC World newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Elizabeth Montalbano

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Armand Abogado

HP OfficeJet 250 Mobile Printer

Wireless printing from my iPhone was also a handy feature, the whole experience was quick and seamless with no setup requirements - accessed through the default iOS printing menu options.

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?