August 9, 2012
RIM Shares Surge On Rumors Of Samsung Licensing Deal, Acquisition
redOrbit Staff & Wire Reports - Your Universe OnlineJefferies & Company analyst Peter Misek said Samsung could be interested in either licensing RIM´s new BlackBerry 10 software, or potentially acquiring the embattled company.
“We believe Samsung is considering ramping up its internal OS [operating system] development efforts, licensing BB10, or buying RIM,” Misek wrote in a note to clients.
“We think any acquisition is unlikely until after BB10 launches.”
Samsung is the world's largest mobile phone maker, and currently uses Google´s Android software for its smartphones. But the company could be concerned that Google will make better versions of Android for its own smartphones, or stop licensing the software to rival handset makers altogether.
Google acquired handset maker Motorola earlier this year, which may have caused Samsung to consider other possible software alternatives, Misek said.
The Korean phone maker understands the growing importance of software, and the risks in not owning the software used to run its phones, he said.
Meanwhile, RIM is considering its options as it scrambles to turn around its struggling business. The Ontario, Canada-based company's BlackBerry has lost significant market share to Apple Inc.'s iPhone and other devices, including Samsung´s, that run Android.
RIM has hired J.P. Morgan and RBC Capital Markets to assist in evaluating various strategies, including partnering with other companies and licensing its software.
In January, Samsung said it had no interest in acquiring RIM.
RIM's software has lagged behind flashier devices like Apple´s iPhone and phones running Android. But RIM points out that its much-delayed BlackBerry 10 software has been completely redesigned for multimedia, web browsing and the full-featured app experience customers expect.
Misek said he believes Samsung could pursue a licensing deal with RIM, but will likely wait to see how the BlackBerry 10 software is received before making a final decision.
RIM has said its new BlackBerry 10 will be released early next year.
Shares of RIM rose 44 cents, or 6 percent, to $7.75 in early afternoon trading on Wednesday on the Nasdaq, before closing the day at $7.62. Shares of RIM have lost half their value this year, while the company´s market capitalization has plunged from more than $89 billion in 2008 to roughly $4 billion today.
Misek also warned that RIM's smartphone sales volumes will likely continue their decline, and expects the company to ship 6.5 million handsets in the current quarter. Data released Wednesday by research firm International Data Corp (IDC) also supports these figures.
A Samsung spokesperson told AllThingsD early Wednesday that the company has not considered acquiring RIM, or licensing the new BlackBerry 10 software.