The first thing that comes to mind when I hear that Samsung might buy RIM is what will happen to thousands of people in Waterloo who work for RIM. The sands are shifting in the smartphone world. Samsung is giving Apple a run for its money all over the world and now it might takeover RIM. Facebook, Microsoft and billionaire activist Carl Icahn are also rumoured to be looking at buying RIM. But will the buyer keep RIM’s Waterloo operations up an running?
Samsung is Hot, RIM is Not
Samsung is at the top of their game right now. They were arguably the hottest company at the Consumer Electronics Show in Vegas this month. Their Samsung Galaxy S II Epic Touch 4G Android Smartphone is trending in the top ten products this morning according to Alexa What’s Hot.
RIM is not doing so well. Disappointing Playbook sales and delays in the release of their new Blackberry 7 OS have taken a toll. RIM shares dropped over 73 percent over the past year, although the takeover rumours boosted RIM shares by 42 per cent since Dec. 21.
How epic it would be to have a hybrid Galaxy Blackberry – the Glaxberry.
Why Would Samsung Want RIM?
RIM has a portfolio of patents that is estimated to be worth between 2 and 3 billion by technology analsyt Shaw Wu. RIM also has BBM messaging with about 45 million users that is also worth between 2 and 3 billion according to Wu. (Source: “Rumours in Motion” by Josh Rubin, The Toronto Star, January 19, 2012)
RIM has one more major asset that would be attractive to Samsung and other buyers: Intellectual Capital.
Intellectual Capital at RIM Will Save Waterloo
I think that the jobs of the thousands of people working at RIM Waterloo will be safe because it is impossible to move Waterloo’s intellectual capitol to Korea. Here’s why Samsung or any buyer will keep RIM in Waterloo:
- They created a technology hub around Waterloo University
- They have hundreds of co-op students that work for them every year and they pick the best to become their employees
- The local and federal government have a vested interest to keep RIM in Waterloo to keep the economy surging forward. 6000 jobs leaving the area is a political nightmare.
- They are founded the Perimiter Institute
- They created the “push email” technology that made Blackberry the number one phone in the world for many years. They have an enormous workforce of some of the best mobile developers and engineers in the entire world. I doubt that Samsung would want to pass on all of that talent.
Even if somebody decides to buy RIM, it would be strategically valuable to keep the intellectual capital in Waterloo. Do you agree?