If no-one will save RIM, perhaps Canada should

If no-one will save RIM, perhaps Canada should

Summary: Takeover this, takeover that. If the BlackBerry maker is unsellable, or a loose cannon in the current market, why shouldn't Canada step in?

SHARE:

Research in Motion is seriously struggling. As it puts on a brave face to the public by releasing its new BlackBerry smartphones into the wild, behind the scenes, there are fires burning in the offices, gang-warfare between floors and executives hurling themselves out of windows.

OK, so I paint a colourful, albeit fictional picture. But nevertheless Research in Motion is not looking healthy.

With the Motoroogle deal under way -- the handset maker Motorola Mobility, is gobbled up by Google -- the industry is turning its head towards RIM with bated breath -- hoping it will survive the cold winter.

Shares at RIM have plummeted this year; rescued by a 10 percent rise since the Motoroogle deal, in anticipation it could be bought out.

After a long conversation with senior technology editor, Jason Perlow, as though we were conspiring stuffing a pillow over the face of the BlackBerry giant, we came to some interesting conclusions.

Perlow strongly believes that RIM cannot recover its losses on its own. It needs help. I questioned whether Google or even Amazon -- in my sheer naivety -- could buy out RIM.

Google suddenly has a cashflow problem in that, all in all, it cannot afford RIM. Besides, what would it do with it? Amazon has its own tablet coming out soon, along with the Kindle it needs to support. But Amazon isn't worried about "getting dinged on patents", as Perlow eloquently put it.

If anything, Amazon should focus its efforts on the cloud -- only yesterday announcing provisions for the U.S. government -- for supplying goods and content to RIM's platforms.

And then comes Microsoft. The Redmond-based company and Ontario-based company have been secretly seeing each other for some time.

RIM and Microsoft have been holding hands behind the scenes, shying away from hotter, more attractive models such as Google and Facebook.

By bringing together BlackBerry enterprise and encrypted email software to Microsoft's online services, this partners the two companies in a deep, meaningful evening of heavy petting.

Bringing together, dare I say it, Windows Phone 7 to the BlackBerry handset would force RIM to drop BlackBerry OS 7 and its QNX venture, into an operating system not strictly designed for the handset. It would mean further modifications to Windows Phone 7 to even get it to work on the vastly different BlackBerry handset range.

Together, whilst seemingly looking like a partnership, would be weighed on Microsoft's part -- supporting the BlackBerry maker through its troubling times. Besides which, Mary Jo Foley says "nah" to the idea -- and I trust her with my life.

As Perlow put it nicely: "RIM is not a clean purchase for anyone".

That is, with the exception, of nationalising it to become the property of the Canadian government.

Though the brand value of the BlackBerry may not be enough, and considering RIM's net income was down by around $130 million last quarter, based on revenue in the same quarter the year before, the Canadian government could still present RIM as a vital boost to its citizen takings.

It would mean, by nationalising RIM, that the Canadian taxpayer would ultimately have to pay for the buy-out.

But it's not the first time a government has taken over a failing company -- or bank, for that matter.

Pointing you in the direction of Northern Rock in the United Kingdom -- the BBC business editor Robert Peston, often cited as the man who brought down the bank -- is safely in the hands of the British government.

Having said that, the Canadian economy needs RIM to keep going. It employs tens of thousands of employees in Canada alone, and pays a shedload of tax that Canada would struggle to find elsewhere.

Technologically, the Canadians have already roared upheaval over the United States' Patriot Act, which can reach not only to cloud-stored data in Canada, but Europe and further afield, also.

But RIM already has a massive datacenter in Canada, allowing the Canadian government to outsource email operations to a datacenter on its own soil -- well out of the reach of the American's.

All I ask, dear Canada -- a fellow commonwealth country to my British home -- is that you don't sit idly by as you did with Nortel and allow the company to be sold off.

What goes down, must come up. Or, something to that effect. Canada needs to keep RIM -- economically, for its brand portfolio, or to simply keep it out of American hands -- and it has to be done sooner rather than later.

Topics: BlackBerry, Mobility, Security

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

20 comments
Log in or register to join the discussion
  • Zack, you don't know Canada

    1. Canada is doing fine economically, actually finer than either US or UK. Actually do you find anyone doing better in western countries? Hard, right, US is in trouble, EU is in deaper trouble economically.

    2. Canada right now is under right wing government. When I say right, I mean the "right" right is which opposite to wrong. They are not going to do stupid socialist things as the current US socialist goverment do.

    3. You are right about Nortel, I do think Canada shouldn't have let Nortel die. Because Nortel was a technology giant with poor management. RIM doesn't have much of that.

    Canada can't and will not try to save RIM in any way, trust me.

    4. So, again, you are right about RIM to make Windows Phone. I simply just can't see a second choice. Unless someone believe QNX will save RIM.
    jk_10
    • RE: If no-one will save RIM, perhaps Canada should

      @jk_10 If you think the current Canadian government doesn't do "stupid socalist things" then you've been drinking the Harper kool-aid without looking into anything yourself.
      samalie
    • RE: If no-one will save RIM, perhaps Canada should

      @jk_10 It's true, the Harper government would never step in to help a viable company in trouble. Instead they focus on burgeoning industries like asbestos mining. This is the "right" way of doing things.
      PatrickBay.ca
  • RE: If no-one will save RIM, perhaps Canada should

    I believe in QNX! =D
    MediaCastleX
    • I don't

      @MediaCastleX I don't believe anyting ends with a X, I mean Unix or Linux.
      jk_10
  • RIM is toast.

    Their numbers have been awful for years. ASP, subscribers added, total margin, etc, have all shown that they've been on the downward side of the bell curve for a while. Their co-CEOs have been too stupid to see it, and now RIM employees will pay, literally, with their jobs.

    Rather than a bailout, the Canadian government should be preparing for a lot of smart, unemployed people. Instead of a lifeline to RIM that will likely only benefit executives and/or shareholders, Ottawa would be wise to allocate funds to stake start-ups by soon-to-be-ex-RIM employees.
    matthew_maurice
    • RE: If no-one will save RIM, perhaps Canada should

      @matthew_maurice But think of the benefits that Canada's government could have with the RIM portfolio. "Hey, we provide governments with secure messaging -- oh by the way, we're a government, too".
      zwhittaker
      • RE: If no-one will save RIM, perhaps Canada should

        @zwhittaker Yes, because if there is one thing a Government will do, it is buy "secure" communications from another government.

        The possibility of any sort of spying activity will ensure that every other government on the planet would immediately dump BlackBerry.

        Sorry Zack, but you're out of your mind on this one.
        samalie
      • RE: If no-one will save RIM, perhaps Canada should

        @samalie Considering that BES encryption keys are *not* held by RIM, then there would be no need for other gov's to ditch the BlackBerry. It's not even clear whether BBM encryption keys are held by RIM -- but if they are, Canada could sell them to other law enforcement around the world.
        zwhittaker
      • RE: If no-one will save RIM, perhaps Canada should

        @zwhittaker If the Canadian Government (or ANY government) got their hands on a company like RIM, probably the first thing they would do is engineer the software to be able to intercept communications of their choice. After all, they'll own the company, and they'll make changes that benefit THEM.

        I know the keys are not held by RIM today...but you get a government involved, and there WILL be a backdoor. And you know they won't tell us about it.
        samalie
  • Unfortunately no one can save RIM now.

    If would be pure folly for Canada to even try. It would be a huge boondoggle wasting billions of Canadian taxpayer cash. RIM best bet now is to grab hold of WP7 and try to make a value add enterprise play and try to beat Nokia to the enterprise in the next 12 months while Nokia is still largely consumer focused. But it would take very quick decisive moving on RIM's part and they havent shown themselves to be that kind of company.
    Johnny Vegas
  • RE: If no-one will save RIM, perhaps Canada should

    No one can save RIM... They are a failed company with a lot of crappy phones that they shove down our throat... They learnt from MS that if they give some kickbacks to the IT departments, they can stay in enterprise forever and shove crap phones down our throat... iPhone started a revolution against this mal-practice and Android is keeping it up... Bye RIM, it is time for you to RIP
    browser.
    • RE: If no-one will save RIM, perhaps Canada should

      @browser. Care to make a wager whether RIM will die? You will lose!
      kwatcha
      • RE: If no-one will save RIM, perhaps Canada should

        @kwatcha - Browser has no clue what he is talking about.Lets revisit his comments in 3 Weeks and he will iCry :)
        negative001
  • RE: If no-one will save RIM, perhaps Canada should

    Ah, I'm a Canadian & last time I checked Canada makes more money in a day than the U.S. makes in months. Yes, we make more money than you. Wake up! This article is soooo stupid! A little research wouldn't hurt at all. Canada makes more off minerals & potatoes than RIM will ever make for them.
    SBMobile
  • Message has been deleted.

    samalie
  • RE: If no-one will save RIM, perhaps Canada should

    The author clearly suggests a ridiculous idea. RIM is nowhere close to failing as a company, now that they have stacked up on their patents. But if you guys look outside the US, RIMM has been doing pretty well in markets like India, Indonesia and the UAE. And for corporates, Blackberries are still the phones of choice if you want to do some serious work. RIM will continue to have a loyal marketshare and is nowhere close to extinction. Yes, it's in trouble but then its trying too with its BB OS 7 & QNX based new phones.
    Rahul Mulchandani
  • RE: If no-one will save RIM, perhaps Canada should

    If Google has a Sell from S&P and so does US. The US and Google are the one's that need to be saved. You Idiots all think your funny claiming Death of RIM. The only death that will come before that, may be you. They surely aren't going anywhere! Idiots!
    kwatcha
  • RE: If no-one will save RIM, perhaps Canada should

    Zack - you and most of the other pundits still try and call RIM out all the time. Yet who was really "THE NEXT PALM"?
    MOTOROLA! Yet all I can see are a bunch of articles espousing why RIM is dead, when clearly RIM knocked out MOTOROLA. Can you please explain why the pundits then are not espousing this fact on their blogs?
    respighifan
  • Canadian gov't saves RIM? Won't happen!

    Zack, it would be an idea for the government to save RIM, but it won't happen. Why?

    1) The company would have to be seen as being viable in the future - and it isn't with the current management who have implemented the current strategy. Once the handset business dies, so does the data network.

    2) you've no idea just how stupid, corrupt, and ideologically blind Harper is. Not only doesn't he understand the value of turning RIM around for our economy and tech sector, his ideology is against such actions. This is a man who has muzzled federal scientists such that the journal Nature has censured him and is closing the busiest coast guard/rescue station in the country in Vancouver. The station is in the heart of a 600,000 person city and 1.2 million person metropolitan area that continually responds to distress calls from small boats, small human powered craft, windsurfers, etc. yet he says the calls can be handled by a station that is thirty minutes away by road on a light traffic day and further by water. He values ideology above human lives - he won't be saving RIM.
    3) The government doesn't have anyone who understands what should be done to turn RIM around. Nothing would change and the inevitable would only be delayed, costing the taxpayers in the end.
    Marc Erickson