RIM may start offloading smaller divisions
Reported to be seeking buyer for cloud provider NewBay, which the BlackBerry maker only bought in October
Published: 13 August, 2012
RIM is looking to sell off several of its minor units in a race for cash, including cloud services unit NewBay, which it only acquired 10 months ago. This is part of the firm's ongoing strategic review, according to Reuters, a review which could end up with far greater changes, even the sale or break-up of the BlackBerry maker.
RIM bought Irish NewBay in October for a reported $100m, during a phase when it was trying to address its challenges by diversifying into growth areas like cloud media. The acquisition seemed a logical one for RIM, bringing a range of video and social networking tools which could tie into carrier partnerships, cloud strategies or BlackBerry Messenger. The smaller firm offers a white label service, LifeCache, for storing content in the cloud, which is badged by Verizon, AT&T, Telefonica O2, Orange and other operators.
It was supposed to help RIM increase services revenue, enhance the BlackBerry offering and keep pace with Amazon Cloud Drive or Apple iCloud. It made a series of media related purchases in 2011, including video editing company JayCut, mobile social gaming specialist Scoreloop and tinyHippos, developer of the Ripple mobile environment emulator.
However, the emphasis since new CEO Thorsten Heins took over earlier this year has shifted to streamlining and cutbacks, not a broader product range. That could see a series of divisions offloaded, some of them larger than NewBay - IBM was recently reported to be interested in the back end enterprise platforms. But many observers, including some activist shareholders, think RIM should hold onto those kind of assets and instead focus on selling off the handset business. Heins, however, is clinging to the idea that the upcoming, though delayed, BlackBerry 10 will rescue the device platform, and enable this to remain the centrepiece of the firm's activities.
In its review process, RIM is targeting about $1bn in savings by the end of its current fiscal year and the eventual loss of about one-third of its staff, or 5,000 jobs. RIM declined to comment on the NewBay sale report.