Shareholders are not the only ones who want to see something at RIM split. First it’s the separation between chairman and CEO roles that are currently handled by both Jim Balsillie and Mike Lazaridis. Today, analyst Mike Abramsky of RBC Capital Markets stated the best thing for RIM to do is split their handset and network businesses into two divisions. RIM currently has over 68 million worldwide users and this sounds very much like what Motorola decided to do when they split up earlier this year, essentially creating Motorola Mobility and Motorola Solutions.
Abramsky stated in a note to his clients that “Pressured by Apple, Google and losing North America share, valuation at 5x P/E reflects low sentiment regarding RIM’s turnaround prospects…RIM’s organization, like its handsets, needs modernization. By acting now, splitting RIM into network and handset businesses may target opportunities and unlock significant shareholder value… RIM’s end-to-end solution was conceived when data devices and networks were nascent — but times have changed,”
According to Abramsky one of the main reasons for the split is because of RIM’s QNX operating system. This is what’s powering the PlayBook and will be in the next-generation BlackBerry smartphones too. Abramsky noted that “QNX is not a panacea, the Smartphone sector has become intensely competitive and turbulent, and there is no magic bullet for turning around RIM’s handset business overnight. Although QNX appears strong, if QNX doesn’t work, or further mis-execution undermines RIM’s turnaround, then RIM will be left without a ‘plan B.’”
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