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Insider info: Microsoft planning to take over RIM in next year

Rumors have circulated before that Microsoft have been contemplating the purchase of Research In Motion (RIM). This has been fuelled recently with the deal struck behind closed doors to include Microsoft’s BING search client on all upcoming BlackBerry smartphones.

KitGuru heard last night from some industry insiders that Microsoft may be contemplating a takeover in the next year. With Microsoft’s stance in the mobile market and their desire for success, RIM looks like a very viable takeover option for Steve Ballmer’s team.

How feasible would a takeover be however? Currently RIM’s market capitalisation is only $25 billion and Microsoft have around $50 billion in cash. Financially, it is easily achievable for Microsoft to buy RIM and increase their floundering mobile sales overnight. Microsoft are very serious about targeting smartphone sales and in honesty, their Windows Phone 7 launch has been a disaster.

RIM haven’t had a great year either, struggling to create a new design to target increasing iPhone and Android sales. They did buy QNX but their first device to support it, the Playbook hasn’t had a great launch either with many reviews saying it is not ready for release and has a lot of development ahead of it to make a formidable challenger against the iPad 2.

If Microsoft and RIM were to combine resources, both companies would have a much larger pool of resources to draw from, and software development could be much quicker. Of course there is always the theory that the merging of two development teams can end up very messy and that product development can actually be slowed down.

Microsoft are without question watching RIM’s market value, especially the dropping market share and potential take over costs. Microsoft may be waiting for a few more billion to be deducted from the takeover price before making their move. With RIM in their corner, the enterprise customer base would increase exponentially. With both companies targeting the same market as a unifed group, it could pose a serious threat to Apple and Google.

KitGuru says: watch this space.

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