BlackBerry maker Research in Motion is considering selling cloud services provider NewBay and some of the other minor assets it recently attained as part of a strategic review process, according to a source close to the action. RIM acquired NewBay, a supplier of photo, video, and social-networking tools for smartphones and computers, in October 2011 for around $100 million, as it tried to roll out a new strategy to stem its steady deterioration.
RIM, centred in Waterloo, Ontario, is a pioneer in the smartphone industry, but has struggled over the last couple of years, as its aged line-up of BlackBerry smartphones have been unable to compete against more-advanced devices like Apple’s iPhone and a number of other models based on Google Inc’s Android software. The acquisition of NewBay in Dublin, Ireland, was an enormous part of the former RIM leadership’s plan to modify its course and boost service revenue by letting carriers use its services for messaging, content delivery and analytics.
When RIM bought it in late 2011, NewBay had over 80 million subscribers. NewBay stores media on its own servers and delivers it to any Internet-connected device, including mobile phones, personal computers, desktops and tablets.
However, in the face of mounting pressure RIM’s Co-Chief Executives Mike Lazaridis and Jim Balsillie resigned early this year. RIM’s new CEO Thorsten Heins started a strategic review process within the company and is focused on delivering a new line-up of devices that run on RIM’s new BB10 operating system, to be out in the first-quarter of 2013. Since taking the reins early in 2012, Heins has retained RBC Capital Markets and JPMorgan to explore options for RIM.
Its share price has dropped more than 60 percent over the duration of the last year, as RIM has continued to haemorrhage market share to the likes of nimbler competitors like Apple and Samsung. RIM’s shares closed more than 6 percent higher at $8.29 on Friday on the Nasdaq, after it was reported that tech giant IBM had at one point thought of buying RIM’s enterprise division.
