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Nokia 'not interested' in buying RIM

Devices unattractive - but what about the software?

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Internet Security Threat Report 2014

Nokia doesn't want to buy Research in Motion, a senior staffer said today.

Mary McDowell, who runs Nokia's Enterprise Solutions business, said the phone giant can develop similar devices to RIM's without the need to acquire the Canadian company's expertise, the Helsingin Sanomatreports.

And since almost 70 per cent of RIM's revenue comes from device sales, a market Nokia in which already well established, it doesn't make much sense buying RIM for its earnings potential, she added.

RIM posted a profit for the three months to 28 May, the first quarter of its 2006 fiscal year. The company reported a net income of $132.5m (67 cents a share) on revenues of $453.9m, up 12 per cent sequentially and 68 per cent year on year. The company closed the quarter with 3.11m Blackberry subscribers, 24 per cent more than the Q4 FY2005 tally.

Nokia was named in January as a possible suitor for RIM by a Goldman Sachs analyst. Motorola, which last week acquired UK mobile phone maker Sendo, was also named as a potential buyer.

RIM's success has been built on device sales, but it has also been keen to license its client software to other hardware makers. In the US, that's been impossible because of the company's long-running legal battle with NTP. March's settlement paved the way for RIM to begin to tackle that segment in earnest, and while the deal brokered between the two companies hasn't gone as planned, the signs point to a resolution in RIM's favour.

Thus begins RIM's shift toward services and software, more lucrative than devices. That shift may well attract Nokia, since it fits better with the Finnish giant's existing business. RIM's strength lies in its customer base and brand-awareness. Technologically, it has nothing compelling to offer: there are plenty of device makers and software companies out there offering comparable products - all they lack is a name as recognisable as Blackberry's. ®

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