RIM looking to JPMorgan for life support, report says
The mobile company is reportedly trying to ink a deal with JPMorgan Chase, so the financial firm can help it make smart strategy decisions.
Research In Motion CEO Thorsten Heins has decided he needs some outside input on the company's strategy, according to a new report.
The BlackBerry maker is currently nearing a decision to pick a financial adviser that will help it make strategic decisions, according to Bloomberg, citing sources. JPMorgan Chase is the front-runner in RIM's list of choices, and could be named its adviser within the next couple of days, the news agency is reporting.
RIM's reported decision to bring on a financial adviser comes just a few weeks after the company posted a bleak fiscal fourth quarter that saw the firm lose $125 million, down from a $934 million profit in the previous year. In addition, RIM reported that revenue was down 25 percent to $4.2 billion and BlackBerry shipments fell 80 percent to 11.1 million units.
"It's clear to me substantial change is what we need," Heins, who replaced co-CEOs Jim Balsillie and Mike Lazaridis earlier this year, said in a statement.
According to Bloomberg's sources, the "substantial change" Heins cited might include RIM licensing the BlackBerry mobile operating system to third-party vendors. If the licensing doesn't work out, the company could try to find a strategic investor to help boost its cash flow and allow it to invest in other growth areas, the publication's sources claim.
Left out of the discussion, it seems, is an idea former co-CEO Jim Balsillie brought up behind closed doors last year. Reuters reported last week that prior to his ouster, Balsillie had been in talks with wireless carriers across the U.S. to allow them to offload their traffic onto RIM's network. The move, Balsillie reportedly believed, would help RIM dramatically increase revenue and perhaps most importantly, reduce the company's reliance upon hardware sales.
According to Reuters, the idea was quickly tossed out by Heins and Lazaridis, who believe focusing on BlackBerry 10 devices is the path to RIM's future success.
RIM's own investors, however, don't seem all that convinced that such a plan makes sense. Back in October, an activist investor said in an interview with Reuters that RIM must either sell off its hardware business or break the company apart to maximize shareholder value.
"Everybody is in support of a sale of RIM or another value-creative transaction," Jaguar CEO Vic Alboini told Reuters. "Like splitting the company into separate public companies--a network company, a device company, and a patents company."
Regardless of what RIM decides, it's clear something needs to happen, and soon. The company's shares are down 75 percent in the last year alone, and nearly all analysts believe the bottom is not yet in sight.
RIM declined CNET's request for comment on the Bloomberg report.