Microsoft, Nokia considered joint bid for RIM, report says

As Microsoft and Nokia were working out their Windows Phone 7 plans earlier this year, the companies were also considering a joint bid for Research In Motion, a new report claims.

Citing anonymous sources, The Wall Street Journal is reporting today that Microsoft and Nokia neared a joint bid for RIM "in recent months" before deciding against it. The Journal's sources also said that while RIM co-CEOs Jim Balsillie and Mike Lazaridis won't necessarily turn their backs on any buyout offers, the executives are waiting until next year's launch of the company's new mobile software before taking any buyout bids seriously.

Microsoft and Nokia surprised many industry observers this year with a partnership that would make Windows Phone 7 the "principal" operating system on the handset maker's line of devices. The move effectively ended Nokia's long-standing reliance upon Symbian and could either be the move that saves Nokia or that only exacerbates its continued market share losses.

RIM, like Nokia, is in bad shape. Over the last couple years, the company's market share has dropped as Apple and Android-handset makers deliver products that consumers find more compelling than the BlackBerry. Those market share declines have spilled over to RIM's financials, which have plummeted in the last several quarters, prompting many investors to call for new management and a potential sale.

"Jaguar believes that RIM should sell its handset business and monetize its patent portfolio, while retaining its service business under new leadership," Jaguar Financial, aRIM shareholder, said in a statement last week. "Jaguar believes RIM has lost its ability to compete in the consumer hardware business and a sale or spinout to its shareholders of the handset business is recommended as an approach to restoring value."

A sale might have been unthinkable just a year ago when RIM's stock was hovering around $60 a share and its market capitalization was high. But over the last year, RIM's shares have dropped 79 percent to close yesterday at $12.52. The company's market cap is just $6.56 billion, which, assuming a suitor would offer a slight premium on that to sweeten the pot for RIM, is a bargain for major companies, like Microsoft and Nokia.

But they're reportedly not the only firms that have considered acquiring RIM. Just yesterday, Reuters reported that Amazon had flirted with the idea of merging with the BlackBerry maker, but stopped short of placing a formal offer after RIM management discouraged the idea.

RIM has, however, been willing to talk to other companies about something much different: licensing its software. According to the Journal's sources, RIM has held talks with HTC and Samsung on licensing its next operating system version. However, unlike Microsoft, which licenses its software but stops short of developing handsets, RIM would still sell its BlackBerry smartphones, even if it inked licensing deals with other firms, the sources said.