RIM Could Split Into Two Companies

RIM could split into two companies after reporting its first operating loss since 2003, according to a report in The Sunday Times.

The troubled BlackBerry manufacturer could sell its struggling handset division and its messaging network, as it prepares to published an expected loss of more than $10 million (£6.4m) in its first quarter results later this week.

BlackBerry break-up

Potential buyers for its smartphone division include Facebook and Amazon. Facebook has been rumoured to be bringing out a handset as early as next year, while the success of the Kindle Fire tablet has prompted speculation that Amazon could enter the market. Another possibility that has been suggested is that it keeps the business intact, but under the protection of a larger company such as Microsoft.

RIM’s messaging service could either be sold or opened up to the likes of Apple and Google, potentially earning billions of dollars a year. One investor reportedly supports the sale of the handset division, as well as RIM’s patent portfolio, which could also secure billions of dollars.

Two banks have been hired to explore the move, which would appease investors angered by heavy lossess sustained since the launch of the iPhone in 2007. Four years ago, BlackBerrys accounted for half of all smartphone sales, yet now represent just ten percent of the market.

Problems have been mounting at RIM for some time, with a worldwide data outage damaging its reputation and poor sales harming its finances. It has emerged that the company faces a £661 million writedown after its stockpile of devices grew by 18 percent in the last quarter and the company has brought in two other banks to conduct a strategic review.

This apparently includes the loss of 2,000 jobs, a process which reportedly began last week. Many at the company hope that the release of phones running BlackBerry 10 OS later this year will kickstart a revival of fortunes.

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