Who could -- and probably should -- buy RIM?

Summary:BlackBerry maker Research in Motion can stick around, split off and share its products, or sell off completely. Who could make a bid for its patents, its network or phone unit -- or even the entire business?

Research in Motion, the BlackBerry maker, is sinking.

The company's first-quarter earnings paint a dire picture from the once-proud smartphone giant, which left the company with open wounds as it expects to miss further targets for the upcoming second-quarter.

A RIM spokesperson told sister site CNET it has hired advisors --- notably J.P. Morgan and RBC Capital --- to "examine ways to leverage the BlackBerry platform through partnerships, licensing opportunities, and strategic business model alternatives."

The first sign of a sale: get the bankers in, and RIM has done exactly that.

On Thursday, RIM announced it would cut 5,000 employees as part of a corporate restructure, after missing analyst expectations by a wide gap. It announced a $518 million loss on revenue of $2.8 billion, only a month after it said it expected to announce an operating loss.

The BlackBerry maker is still selling smartphones, and -- believe it or not -- it's managed go get out 280,000 PlayBook tablets; but it is holding back on the forthcoming BlackBerry 10 operating system and compatible handsets.

Even Wall Street analysts said RIM could "run out of cash and ultimately fail, even with the launch of its now-delayed BlackBerry 10 device early next year," according to Reuters.

RIM can stay and stand its ground, split off and share its products through strategic licensing, or sell off the company completely.

But who would want a floundering former smartphone giant? It's more than just a smartphone-building unit. It has a data network and a valued $1.3 billion to $3 billion patent portfolio, according to Macquarie analysts.

Let's see who could have what, based on analysts' predictions and practical implications.

Apple

The Cupertino-based technology giant could make a bid for RIM's data network. Its already-established place in the enterprise market could convince the company into buying the government-grade email service to bolster its government and enterprise iMessage platform. Many former BlackBerry users are defecting to the iPhone anyway.

But Apple already has iOS and doesn't need another operating system, ruling out a complete company buyout, and large acquisitions are typically uncharacteristic for Apple.

Amazon

Retail giant turned tablet maker Amazon reportedly looked at buying RIM in late 2011. The original Reuters report, citing anonymous sources, said RIM turned down the officer because it wanted to "fix its problems on its own."

Amazon could acquire the BlackBerry Messenger functionality for its emerging market presence, and could lead to a much-needed boost in Amazon's market share among the bigwigs away from other Android-based devices and the iPad juggernaut.

TD Securities said in an analysts' note that e-commerce could be a "vibrant use" of the secure RIM network.

Canadian or U.S. government

In August, I argued the Canadian government could extend an olive branch to the company, but this looks increasingly unlikely. RIM plans to cut 5,000 jobs by the end of this year, pegging the total employee base will be reduced to about 11,500.

If RIM was Nokia's size and at the low hundred-thousand mark, Canada might step in to protect the vast number of jobs. Canada said previously it would not block a foreign sale of RIM should a company make an offer, but stubborn RIM may not even allow a sale until it's too late.

RIM isn't central to the financial interests of Canada. It's not like General Motors, or the Royal Bank of Canada. They didn't even step in to help Nortel, a company that was far more critical to Canada's economic situation than RIM is or ever was.

The U.S. government could buy the data network to keep its existing range of enterprise-enabled BlackBerry smartphones with an eye on replacing the devices over time, but it would be a tough sell to justify to the taxpayer, who must ultimately foot the bill.

Facebook

The world's largest social network, with around 950 million users, has been on and off with developing a dedicated Facebook smartphone. RIM could offer device-building expertise in not only smartphone design but in the manufacturing process.

But analysts warn that it has little enterprise value and could be a drag on Facebook's margins.

General Patent Corp. chief executive Alexander Poltorak told ZDNet: "Facebook seems a possible buyer of RIM's patents. They have money, they need more patents and they are in the market looking for patents to buy."

Google

With Android, like Apple, Google doesn't need another operating system. It also doesn't need a data network because it has secure email provider Postini hooked into Google Apps to provide much of the same function as the RIM network.

What Google really wants is RIM's patent portfolio. "RIM would be a patent play for Google," TD Securities analysts said.

General Patent's Poltorak said: "Google would be a logical candidate since they had bid for this patents last summer at the Nortel auction and lost. However, Google's main purpose in buying up patents is to wield them at Apple, but Apple is already licensed under these patents so no one can assert them against Apple."

Microsoft

Analysts believe that Microsoft's pitch to buy the smartphone-building side of RIM's business would be an "atypical" move, but would be a market share play. A smartphone business would boost Microsoft's poor Windows Phone market share --- currently at around 4 percent, according to comScore --- to around 15 percent overall.

The Wall Street Journal reported in December that Microsoft had "explored the possibility" of a buyout bid along with Nokia. The two companies already work together on a BlackBerry enterprise email service for Office 365, but it remains unclear as to whether Microsoft would make a firm bid for the small-in-comparison number of part Exchange/part BlackBerry users.

ZDNet's Mary Jo Foley told me she doesn't think Microsoft will or should buy any part of RIM.

"If they did, they would do serious damage to their lead Windows Phone partner Nokia. If Microsoft bought any part of RIM --- other than RIM patents --- it would seem that Microsoft wanted to be in the smartphone-manufacturing business. If Microsoft becomes a phone maker, why would they need Nokia any more?"

She noted that Microsoft executives this week denied it would build its own branded smartphone, saying it was "very satisfied" with its partnership with Nokia, seemingly ruling out any chance of a purchase.

Nokia

Unless Microsoft and Nokia joined forces, a buyout of RIM would all but certainly financially cripple Nokia. Not only would a major acquisition of new smartphones and a two operating systems --- BlackBerry OS, and the forthcoming QNX-based BlackBerry 10 --- add complication to the Windows Phone switch-over, which is currently in progress.

Nokia is also facing a restructuring following a reshuffle of its production plants, while at the same time cutting around 4,000 jobs. With its own dwindling market share, Nokia would likely steer clear of RIM altogether.

Back to the age-old question: who falls first, RIM or Nokia? At the moment, it's likely the former but the latter isn't faring so well either.

Samsung

Rumblings last year suggested Samsung may have wanted to put in a price for RIM, but "may have" are the two key words.

Samsung has experimented outside the realms of Android with Windows Phone software, and also sought diversification with Bada OS. The Korean smartphone giant is also looking for enterprise security approval, and a RIM acquisition could certainly help speed this process along.

According to reports, only days after RIM hired Goldman Sachs earlier this year to field potential buyout bids, it looked to Samsung as a company wanting to be sold. The flailing smartphone maker's share price went up by more than 10 percent, despite Samsung's announcement shortly after denying the claims.

The bottom line

The real fact here is that RIM may not be that attractive as a complete purchase from a single entity. Anyone who can afford to buy RIM --- even at a $7 a share mark, which it reached on Friday --- probably wouldn't want to buy the company flat out.

Having said that, there is a chance a major player could swoop in and buy the company in full. With that, as part of the transaction, we could see assets being divested to third-parties at the same time, such as what we saw with Novell.

The Canadian and U.S. governments in coalition could buy the data network because both still operate BlackBerry devices in the field, while Microsoft might want to chip in a bit so it can operate secure and encrypted email from its Office 365 service.

The Chinese may want the manufacturing and design portfolio, Apple may want the patents, while Nokia --- despite its own problems --- may want to expand its hardware range with the BlackBerry smartphone 'shell' devices.

Image credit: Research in Motion, CNET.

Related:

Topics: BlackBerry, Government, Government : US, Mobility, Nokia, Security

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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