Market Commentary and Intraday News
Reports: RIM Looks To Sell Cloud-services Provider NewBay, Other Assets
312 days ago
(RTTNews) - Research in Motion Ltd. (RIMM, RIM.TO) is looking to sell cloud-services provider NewBay and some of its other recent acquisitions, as part of the struggling Canadian smartphone maker's efforts to streamline its operations, according to media reports on Friday.
RIM, the maker of Blackberry smartphones, acquired NewBay in October 2011 for about $100 million. At that time, the acquisition was seen as an important, but late entry by RIM into cloud computing.
NewBay reportedly had over 80 million subscribers when it was acquired by RIM. However, the unit is currently seen as a relatively small player in the cloud-computing industry.
Earlier this year, RIM sold the email services provider Alt-N Technologies Ltd., which it acquired in 2009.
RIM, once a market leader in smartphones, has been struggling to compete with arch rival Apple Inc.'s (AAPL) iPhone and iPad, as well as devices powered by Google Inc.'s (GOOG) Android. According to research firm IDC, BlackBerry reportedly accounts for only 7 percent of global smartphone shipments at present.
RIM, which is amid a restructuring process, recently announced unprecedented job cuts totaling 5,000 by fiscal year 2013 as it seeks to cut costs by $1 billion. The company currently has about 16,500 staff globally. In May, RIM said it had hired JPMorgan Securities LLC and RBC Capital Markets to evaluate strategic options.
RIM is now aiming to regain market share as it plans to come out with a successful new set of BlackBerry devices, called BlackBerry 10, by 2013 to boost its sales.
Meanwhile, according to a report by Bloomberg on Friday, RIM's enterprise-services unit has attracted interest from International Business Machines Corp. (IBM). IBM is said to have made an informal approach about possibly acquiring the unit, which operates a network of secure servers used to support RIM's BlackBerry devices.
IBM has said it plans to make $20 billion worth of acquisitions between now and 2015. During the second quarter, the company completed the acquisitions ofVaricent Software Inc., Vivisimo, and Tealeaf Technology, Inc.
RIMM closed Friday's regular session at $8.29, up $0.49 or 6.28 percent on a volume of 34.29 million shares.
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