NEW YORK (TheStreet) -- For as much as I have covered technology stocks and found a so-called "turnaround story" seemingly at every turn -- including Sirius XM (SIRI) or Nokia (NOK) -- one thing I have realized is that there are few of these stories on Wall Street that have happy endings. In the world of business there is no such thing as "retirement parties" or "sunset send-offs."
Instead, what happen is, as soon as a market leader emerges, rivals come out like a pack of wolves to circle around any sign of weakness with the sole purpose of taking what you have and sending you out of business. It's merciless and shrewd, yet it's the best system ever developed. |
Whenever RIM is said to be a target of an acquisition, there is the obligatory mention of Microsoft ( MSFT), which makes perfect sense; it would relish the opportunity to beat Apple and Google at their own games while strengthening its existing partnership with Nokia. For that matter, there are plenty of reasons why Nokia might enter the mix and make a play of its own for RIM. I think the two best candidates for RIM are social media giant Facebook ( FB - Get Report) and Sony ( SNE - Get Report), though, with the latter needing something to restore its brand and save it from obscurity.
On the heels of what has been an absolute debacle of an IPO, Facebook is looking for a way to save some face with Wall Street, now caught trying to assess what exactly is the value of social media. Facebook's response is to build a phone. But the company forgets it knows nothing about hardware. It's another decision destined to fail. In essence, Facebook needs RIM as much as RIM needs Facebook. Furthermore, the market understands that Facebook's business and sustainability will be heavily predicated not only on its ability to perfect mobile ad revenue but also its ability to monetize its 900 million-person user base. In RIM, not only will Facebook get a better enterprise presence; it will acquire assets such as RIM's BB10 software, a growing music service as well as RIM's Mobile Fusion, a product that supports the collaboration of enterprise mobile devices, even that of competing models such as iPhones and Android devices. In Essence, Facebook immediately becomes a hardware and services company while silencing critics such as myself who assert that the company does not make anything and is merely a fad. Will Facebook see the opportunity it has in RIM? Or insist on throwing good money toward its own R&D project that will likely go nowhere? The case for Sony
There are a lot of similarities between what RIM has become and Sony, which is far from being buried underground but has long been placed there by Wall Street -- grouped with names such as Nokia and Sprint ( S). For Sony, I think buying RIM will be a turnaround story. For as much as I have always respected Sony as a company, I have also always understood it has gotten a lot of credit in the area of innovation for things it never really invented. For example, although it created the PlayStation, it did not invent the video game. It also gets plenty of credit for the VCR, CD, DVD and other technologies already invented by someone else. Sony's specialty has always been the remarkable way it can transform an existing idea into a must-have, and in that sense has been much like Apple. It has relinquished its lead to Apple in mobile audio technology, though, after preceding the iPod with the Walkman, and in that sense is more like RIM. With each passing quarter, Sony product portfolio gets further and further behind. The company can re-acquaint itself with consumers by buying RIM, as well as get something it does not have: an enterprise presence and a possible cloud strategy. By buying RIM, Sony will be able to merge its mobile gaming devices such as the PlayStation portable with a smartphone while also broadening its Sony Music assets with that of existing BlackBerry music subscribers. This also lets it into the highly competitive automotive audio dashboard world to compete with the likes of Pandora ( P) and Sirius XM ( SIRI). Sony has the cash to make this deal work and can re-emerge immediately as a rival to Apple and Google. And, as with Facebook, Sony needs this deal to save its life. But will it recognize how important this opportunity is? Bottom line
For RIM, the game is over -- end of story! For Sony and Facebook, buying RIM starts new chapters within their respective narratives. For Sony, it will be preserving a legacy and reminding Wall Street there are such events in business as happy endings. For Facebook, buying RIM will alter immediately what has become on Wall Street "assumed chapters" in a novel that has only just begun. RIM deserves a considerable amount of credit for its willingness to donate (or in this case) sell its organs for the benefit of humanity in hoping that its mistakes are never repeated. This is Wall Street, though, where we don't learn from our mistakes and a new RIM is popping up every day.
There are a lot of similarities between what RIM has become and Sony, which is far from being buried underground but has long been placed there by Wall Street -- grouped with names such as Nokia and Sprint ( S). For Sony, I think buying RIM will be a turnaround story. For as much as I have always respected Sony as a company, I have also always understood it has gotten a lot of credit in the area of innovation for things it never really invented. For example, although it created the PlayStation, it did not invent the video game. It also gets plenty of credit for the VCR, CD, DVD and other technologies already invented by someone else. Sony's specialty has always been the remarkable way it can transform an existing idea into a must-have, and in that sense has been much like Apple. It has relinquished its lead to Apple in mobile audio technology, though, after preceding the iPod with the Walkman, and in that sense is more like RIM. With each passing quarter, Sony product portfolio gets further and further behind. The company can re-acquaint itself with consumers by buying RIM, as well as get something it does not have: an enterprise presence and a possible cloud strategy. By buying RIM, Sony will be able to merge its mobile gaming devices such as the PlayStation portable with a smartphone while also broadening its Sony Music assets with that of existing BlackBerry music subscribers. This also lets it into the highly competitive automotive audio dashboard world to compete with the likes of Pandora ( P) and Sirius XM ( SIRI). Sony has the cash to make this deal work and can re-emerge immediately as a rival to Apple and Google. And, as with Facebook, Sony needs this deal to save its life. But will it recognize how important this opportunity is? Bottom line
For RIM, the game is over -- end of story! For Sony and Facebook, buying RIM starts new chapters within their respective narratives. For Sony, it will be preserving a legacy and reminding Wall Street there are such events in business as happy endings. For Facebook, buying RIM will alter immediately what has become on Wall Street "assumed chapters" in a novel that has only just begun. RIM deserves a considerable amount of credit for its willingness to donate (or in this case) sell its organs for the benefit of humanity in hoping that its mistakes are never repeated. This is Wall Street, though, where we don't learn from our mistakes and a new RIM is popping up every day.
