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Analyst calls for RIM to break apart handset, network businesses

Zach Epstein
July 12th, 2011 at 9:00 AM

With Research In Motion’s annual shareholder meeting scheduled to take place later today, one popular RIM-focused analyst is calling for the company to split its handset and network businesses into two separate companies. “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,” RBC Capital Markets Managing Director Mike Abramsky wrote in a note to investors on Tuesday. “RIM’s end-to-end solution was conceived when data devices and networks were nascent — but times have changed,” the analyst continued. Abramsky believes the standalone network business can target a market of roughly 400 million Android devices, Windows Phones, tablets and other devices with “affordable, efficient, cross-platform mobile push messaging, social networking, cloud and business data services (and software)” that is already interconnected with 595 carriers around the globe. On the other end, splitting off RIM’s devices business could accelerate handset innovation, strengthen developer relationships and help the company prioritize its customers and developers over its carrier partners — a sentiment thought by some to be paramount to RIM’s success moving forward. Abramsky reiterated his price target of $35 for RIM stock, noting above-average risk.

Zach Epstein

Zach Epstein has worked in and around ICT for more than 15 years, first in marketing and business development with two private telcos, then as a writer and editor covering business news, consumer electronics and telecommunications. Zach’s work has been quoted by countless top news publications in the US and around the world. He was also recently named one of the world's top-10 “power mobile influencers” by Forbes, as well as one of Inc. Magazine's top-30 Internet of Things experts.

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