RIM shares rise on Samsung speculation - Mobile World Live

RIM shares rise on Samsung speculation

19 MAR 2012

Shares in Blackberry-maker RIM rose almost 5 percent in trading Friday, apparently on the back of speculation that Samsung could take a minority stake in the struggling firm.

According to a report by Barron’s, Collin Gillis, an analyst at BGC Partners, believes Samsung’s rumoured investment could see the South Korean giant strike a deal to make phones on RIM’s new BlackBerry 10 (BB10) operating system due to be unveiled later this year.

“Obviously new management has been sitting down and saying, ‘maybe we could extend the platform and bring something new into the ecosystem’ [with Samsung or another partner]”, says Gillis, who says he is "fairly certain" there have been talks between the two.

The report suggests an investment of around US$1.5 billion, noting that the Canadian government has vetoed an outright buyout of the company.

In terms of timing, Gillis said “I could give you a better answer in the fall… When we see how much the [BB10] platform has deteriorated.”

RIM installed a new CEO – Thorsten Heins – in January to replace the co-CEO pairing of Mike Lazaridis and Jim Balsillie. With RIM’s stock at an historic low, Heins is facing pressure to break the company up or sell it off. Licensing the new platform could potentially provide a new revenue stream, but would also directly impact RIM’s own efforts on the hardware side.

As for Samsung, the report notes that the vendor is looking to diversity its smartphones platforms beyond Android following Google’s acquisition of Motorola Mobility, which could see Google competing directly with its Android licensees.

RIM’s shares were up US$0.66 cents, or almost 5 percent, to US$14.11 in trading Friday morning.