Samsung to spend big on mobile - including RIM?
Korean giant to invest almost $13bn on smartphone chips and displays, also rumored to be interested in buying RIM
Published: 17 January, 2012
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Samsung is under further attack from Apple's lawyers, and its rumoured LTE plans, but the Korean vendor is investing heavily to maintain the momentum behind its mobile growth. It plans to spend $6.5bn on boosting its mobile components business, particularly processors and displays, in 2012, but will it also shell out to acquire RIM?
The BlackBerry maker's shares rose by as much as 6.7% on a report that it had attracted the interest of Samsung - speculation which arose shortly after RIM was said to have hired Goldman Sachs to investigate possible bidders. This would represent a shift in outlook - last year, RIM's co-CEOs Jim Balsillie and Mike Lazaridis were insistent that the firm would come through its current troubles as an independent player, and were even said to have rejected advances from Nokia and Microsoft. Now, as those troubles worsen and shareholder pressure to sell rises, they may be more welcoming towards Samsung.
RIM's significant surviving strengths in back end messaging platforms and the enterprise market would be attractive to Samsung, whose smartphone success has been heavily consumer driven. It would also like to add the Canadian firm's patents to its mountain and have another weapon to fight off Apple. However, it is unlikely that the Korean giant would want yet another operating system or device platform, so the rumoured merger could result in the stillbirth of the upcoming BlackBerry 10, as well as the ill-fated PlayBook tablet.
The acquisition would be a complex one to manage - and Samsung has been linked, wrongly, with other purchases such as webOS - but the Korean's determination to lead the US smartphone race gives this more credibility than some of the other supposed RIM acquisition stories. According to unnamed sources who talked to the BGR blog, however, RIM's asking price is currently too high.
Not that Samsung is shy of spending large amounts of money to bolster its position across the mobile ecosystem. It has announced plans to spend KRW7.5 trillion ($6.5bn) this year on enhancing its smartphone chip technology, as part of an overall KRW47.8 trillion investment plan, which also sees a similar sum going to the successful AMOLED mobile displays. The shift in the market, and Samsung's priorities, is seen in the fact that mobile processor spend has overtaken that on memory chips for the first time (memories, a highly pressurized market, will get KRW6.5 trillion).
The money will go on new manufacturing capacity, R&D, acquisitions and staff, with plans to recruit 26,000 additional employees this year, joining a total of 350,000. The company also plans to expand production of its Exynos range and other mobile chips in its Austin, Texas plant, and Bloomberg reports that it intends to issue its first overseas bonds since 1997 to raise up to $1bn for this project.
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