How Would Nokia Feel if Microsoft Bought RIM?

Once again RIM is a takeover (talk) target. The recent drop in the company's stock value, declining market share and newly announced layoffs have rekindled discussion among financial analysts of a potential Microsoft acquisition. The following appeared today in Bloomberg/BusinessWeek:

Research In Motion Ltd. has lost so much value that an acquirer could pay a 50 percent premium and still buy the BlackBerry maker for a lower multiple than any company in the industry.

RIM, once worth $83 billion, fell more than 80 percent from its record three years ago as Apple Inc.’s iPhone and Google Inc.’s Android platform siphoned off smartphone customers. The Waterloo, Ontario-based company, which plunged last week after saying quarterly sales may drop for the first time in nine years, closed yesterday at $25.89 a share, or 4.7 times earnings next year. That’s less than any communications-equipment provider, according to data compiled by Bloomberg.

The BlackBerry maker's market cap is currently about $14.6 billion. It's quite possible that a private equity fund could rush in and try to buy the company. But putting that aside Microsoft is always mentioned as the logical buyer (because of RIM's enterprise foothold and the hardware business). 

Yet Microsoft just spent $8 billion on Skype and more than a billion (reportedly) on its deal with Nokia. Would Microsoft turn around and now spend $15 billion or more on RIM? Beyond the cost, it would probably undermine the deal that Microsoft and Nokia have just done -- or at least trust between the companies. Suddenly Microsoft would be directly competing with Nokia, it's premier handset partner. 

I suspect Microsoft won't make a move to buy RIM in the wake of Nokia. If it were to do that Nokia might rethink "betting the farm" on Windows Phone. After all Nokia just released a pretty nice looking handset (N9) based on MeeGo. In fact the demo looks so good it makes one wonder why Nokia felt compelled to do the Microsoft deal in the first place. 

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