What’s Next For RIM?


Things are looking down for RIM and their case patent infringement case with Virginia-based NTP. Today a federal court in the United States on Friday refused a request from Research in Motion to freeze a patent infringement lawsuit while it appealed the case to the Supreme Court. However, the chances of the Supreme Court to over see the case is rare and RIM knows it. Now talks about an injunction on Blackberry sales in the US are very possible.

So what’s next for RIM and the future of their Blackberry device? The most logical solution for them is to settle but they have already tried that before, having agreed to a $450 million settlement with NTP back in March. But the deal subsequently collapsed with each side accusing the other of adding unacceptable conditions. Now fast forward to today and NTP has the upper hand and don’t expect them to be too kind with RIM. Remember NTP’s only assets are the wireless email patents, they don’t manufactuer or produce any products or services. We wouldn’t be surprise if we see a new settlement that was double the original offer, maybe even breaking the one billion dollar mark.

RIM would be smart to settle because an injunction would prove fatal for RIM seeing how 75 percent of their business comes from the US. Not only would RIM lose out on the Blackberry hardware sales but they would also be forced to shutdown all services. Just imagine 5 million plus thumbs becoming Blackberry-less and picking up Treos, Nokias, or whatever instead. Even if the injunction was for a week, anyone that picked up a new device during that time wouldn’t want to go back using their Blackberry especially if they just paid $500+ for a new Treo. So not only would they lose on potential new customers but a large chunk of their existing customer base would adopt other handhelds.

Our recommendation, not that it means much is to play it safe and settle. Don’t chance it with having the courts decide on the future of RIM and Blackberrys in America.