updated 09:25 pm EDT, Sat August 11, 2012
RIM to shed cloud services provider as restructuring continues
Research in Motion is looking to divest itself of the cloud service provider NewBay, which it acquired only last year. Sources familiar with the BlackBerry maker's plans tell Reuters that the NewBay sale would be yet another step in the company's continuing effort to retool and address its steadily worsening market woes.
RIM initially acquired NewBay in October of last year for $100 million. NewBay's LifeCache service -- which allows users to upload and share photos and videos -- as well as its Social Networking Gateway -- which allowed for updating social sites from a central hub -- were RIM's main targets. The Canadian manufacturer hoped to fold these cloud services into its own BlackBerry operating system and products, thereby giving BlackBerry users a mature and robust cloud component.
The acquisition was also reportedly part of a plan to boost revenue by allowing carriers to use RIM's services across a range of other smartphones. Such a plan never materialized, though.
Since then, though, RIM's market position has continued to suffer. In the face of competition from Apple, Google, and others, the BlackBerry platform has underperformed, and the company's revenues have dropped precipitously. RIM has now delayed the release of its next BlackBerry handsets until the first quarter of next year, and the company has been trimming its workforce steadily in an effort to bring costs under control. Should the company sell NewBay, it would most likely be in pursuance of that goal.