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Lenovo buying RIM? Not necessarily

Lenovo buying RIM? Not necessarily

Still, Ovum analyst sees RIM in steady decline even after two new smartphones are due to be unveiled Wednesday

Lenovo on Monday played down reports that it was interested in buying Research In Motion, saying that the BlackBerry maker was one of many companies it was looking at as a potential takeover target.

Lenovo's Chief Financial Officer Wai Ming Wong was quoted by the Bloomberg news service last week saying that Lenovo was looking at " RIM and many others" as takeover targets.

On Monday, a Lenovo spokesman, in a statement, said Wong only meant to include RIM in a list of possibilities, since a journalist had specifically asked about RIM.

"We are aware that Lenovo's CFO, Wai Ming Wong was speaking broadly about M&A strategy in a recent interview," the spokesman said. "RIM was raised as a potential target by the journalist and Mr. Wong repeatedly answered in a manner consistent with all of our previous statements on M&A strategy: Lenovo is very focused on growing its business, both organically and through M&A. When inorganic ideas arise, we explore them to see if there is a strategic fit."

The possibility of Lenovo's buying RIM would make sense, given Lenovo's strong push with smartphones in China and RIM's diminishing share of the global smartphone market, which is now at 5%. Lenovo's interest in RIM is an acknowledgement of the decline in PCs and the surge in interest in smartphones, tablets and other mobile hardware.

Lenovo announced the IdeaPhone K900 smartphone, which will be sold in April in China, at the International CES trade show earlier this month. The phone is unusual in that it runs an Atom processor from Intel, while most phones on the market run ARM-based chips.

However, some pundits also have noted that RIM would not need to be sold to Lenovo, since RIM has cash on hand and is willing to license its software.

RIM's biggest problem is a lack of popular smartphones, which it hopes to correct with the announcement of two smartphones on Wednesday based on the new BlackBerry 10 operating system.

The phones will also be shown in TV ads during the SuperBowl on Sunday.

One analyst noted that RIM isn't likely to exit the smartphone market yet since the company has no debt, has 80 million subscribers and some profits in recent quarters.

That analyst, Jan Dawson, at research firm Ovum, wrote Monday: "RIM continues to face the twin demons of consumer-driven buying power and a chronic inability to appeal to mature market consumers. There is nothing in what we've seen so far of BB10 that it will conquer the second of those demons and the first is utterly out of RIM's control. We don't expect a speedy exit from market...The company can continue in this vein for years. But its glory days are past and it is only a matter of time before it reaches a natural end."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

See more by Matt Hamblen on Computerworld.com.

Read more about mobile/wireless in Computerworld's Mobile/Wireless Topic Center.


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