Research in Motion should be split in two to accelerate innovation and unlock shareholder value, RBC Capital Market’s Managing Director Mike Abramsky told the Fast traders Wednesday.
It hasn’t been a good year for RIM . Shares are down more than 50 percent year-to-date as competitors Apple and Google steal market shares. And Tuesday, the company’s CEO told shareholders RIM was facing challenges as it moves towards what it calls the biggest product launch yet, thanks delays in releasing its new operating system.
Abramsky thinks the best bet is for the company to split its network from its handset unit.
The network carries RIM’s push mail service as well as its BlackBerry messaging. Abramsky thinks it could generate about $5 billion in revenue and get approximately seven million subscribers.
“BBM is essentially an untapped and significant opportunity that’s enormously growing all over the world,” he told the Fast traders.
The handset business, on the other hand, has found itself in a tough market and needs to turn around.
“This separation would still allow that business to attempt that turn around but without dragging down the value opportunity for the network,” he said.
The split would also make an acquisition easier for those eyeing a takeover of the beleaguered tech company.
“It would be hard for Samsung to see buying RIM but it would be easier for them just to buy the handset business,” he said. “Similarly, it would be easier Google to buy the network business with its roughly 600 carrier interconnects all over the world and its enterprise focus.”
But he doesn’t see RIM jumping aboard his plan. He thinks it will take some pressure from Wall Street for the company to consider making the bold move.