Will This Advice Help Research in Motion Stay Afloat?
The advice Canadian billionaire Terry Matthews has for the struggling manufacturer of the BlackBerry, Research in Motion (NASDAQ:RIMM), is simple: find a strategic partner to help defray expenses.
As the founder of Newbridge Networks told the Toronto Board of Trade on Tuesday, “Partnering is so important because it’s not on your income statement.”
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In Matthews’s opinion, a partnership could both generate revenue for Research in Motion and provide additional research spending.
Last week, the smartphone manufacturer’s Chief Executive Officer Thorsten Heins said he had met with executives from several organizations in recent months to discuss software licensing partnerships.
Recapturing the market share Research in Motion has lost to to Apple’s (NASDAQ:AAPL) iPhone and Google’s (NASDAQ:GOOG) Android will not be easy. At the height of the BlackBerry’s popularity in 2009, the brand held 55 percent of the smartphone market, now the company has approximately 5 percent. Not only has the company lost market share, but also its value. On Tuesday, global branding consultancy Interbrand announced that the BlackBerry is 93rd on its list of the 100 most valuable global brands. Last year, the company ranked 56th.
But not all recent news for Research in Motion has been negative. On September 27, the company reported fiscal second quarter revenue that surpassed Wall Street’s estimates. Furthermore, the market analysis publication Seeking Alpha believes that the stock has found bottom at $7.50 per share, the price the it closed at on Friday. Based on several factors, including the company’s impending 2013 release of the BlackBerry 10, its target of saving $1 billion next year, and plans to license the phone’s new operating system, the publication has said the company’s stock may reach $10 per share within the next 12 months. A partnership would further stimulate growth for the company.
While Matthews did not name any potential partners for Research in Motion during his interview with the Board of Trade, Microsoft (NASDAQ:MSFT) has been cited as the most logical partner.
“They have to have a good partner program and mutual respect,” was all he said. “It could make a massive difference.”
Shares of Research in Motion (NASDAQ:RIMM) finished Friday at $8.22 per share.
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