LENOVO TARGETTING ON RIM ACQUISITION

LENOVO TARGETTING ON RIM ACQUISITION

Now Research In Motion (RIM) has become the target of acquisition. This time it is China’s Lenovo, which is looking at a coup of RIM or at the very least entering a tactical alliance. 

Lenovo’s CFO Wang Wai Ming told Bloomberg at the World Economic Forum meeting in Davos, Switzerland that the Beijing company looks at the BlackBerry maker as an acquisition target or strategic alliance partner. “We are looking at all opportunities–RIM and many others. We’ll have no hesitation if the right opportunity comes along that could benefit us and shareholders,” he said. Wong said his company has already spoken to RIM’s executives and bankers about various permutations and options to enter a tactical alliance, though exactly when Lenovo will put in a bid, if at all, has not been revealed.

Lenovo’s CFO comments  at a time whe RIM CEO said this week that RIM is still undergoing a tactical review, with the possibility of licensing BB10 to other manufacturers and selling its hardware production unit. Heins the RIM CEO, said that no decision will been taken till the company gauges the reception that BB10 will get when it launches on January 30. After enduring multi-year losses for the past few years, RIM’s shares have picked up before the imminent launch of BB10.

RIM has been subject of takeover speculation for some time now and the company itself has looked at options after its market share fell in the face of iOS and Android. Other companies have been rumoured to take over RIM over the past two years. Amazon was the first such company when rumours surfaced back in 2011, while in 2012,Samsung denied that it was going to acquire the Canadian company.

Lenovo’s bought IBM’s PC unit in 2005, but the global PC market is shrivelling and has kept the Chinese company from growing. Since that acquisition there is a clear divergence in Lenovo’s PC division, with the Thinkpad line inherited from IBM and the Ideapad series, which is a result of the company’s own research and development. Lenovo's stranglehold on the business notebooks market could bode well for RIM. 

A nuptials between Lenovo and RIM could translate the change in future for the RIM. Lenovo’s strong position in the Chinese market, insider knowledge of the world’s most populated country and its pedigreed manufacturing capabilities mark it out as a great suitor for RIM. It would help BlackBerry establish a strong base in Asia and gain a foothold in the burgeoning smartphone market in the continent.

A takeover of RIM by a Chinese company, however, does raise security questions, especially when in July last year, Heins said that the company had pulled back from expanding its China operations due to concerns over possible breach of sensitive networks. Though a deal focussed on just hardware instead of a full-scale buyout would not in all likelihood have any problems passing telecom regulations.

This isn’t the first time that Lenovo is in news lately for a possible acquisition. This month it completed the buyout of Brazilian consumer electronics maker CCE and among five acquisitions in 2011, the purchases of German electronics company Medion and the PC unit of Tokyo’s NEC Corp stand out.