Taylor says that one of these days, if it hasn’t already happened, M’soft CEO Steve Ballmer, RIM execs Mike Lazaridis and Jim Balsillie will gather for a quiet lunch and talk about what appears unavoidable: Microsoft buying RIM.
According to Taylor, the two companies share an annoying dilemma known as Apple. Both RIM and Microsoft recently disappointed shareholders, argues Taylor, partly because they can not innovate with the energy of Steve Jobs and Co. And both companies are eager for an alternative (one might actually reason that it’s a matter of life or death).
Taylor asserts that Microsoft’s problem is similar to RIM’s. “It’s not exactly a hotbed of innovation.”[From G&M]: “When is the last time [MSFT] invented anything? It spent billions on music players, smart phones, the Xbox and other things, with results ranging from complete failure (in most cases) to questionable success in others (notably Xbox).
None of this really mattered because Microsoft could always rely on its two cash cows – Windows and Office – to churn out profits.
But just as computing moved from the desktop to the laptop, which didn’t hurt Microsoft, it’s now moving from the computer to the smart phone and tablet, which will hurt because Mr. Ballmer’s company has come up short in both areas. The race is over, and Microsoft was never really a contender.
Investors have an amazing knack for underestimating how quickly technological shifts can destroy what seem like unassailable franchises, but if you have any doubt, consider what innovation (or lack thereof) did to Eastman Kodak. Only 15 years ago, it was a $90 stock. It’s about three bucks today.
Tablets will evolve – they already have come far – and it’s not hard to foresee a future where many people never use a computer, just a tablet, leaving Microsoft out in the cold.”
Taylor points out that M’soft is acutely mindful of its position and that there is one way to help address it: buy RIM, adding that the BlackBerry maker would accept such an offer since the economics of its business structure are beginning to degrade as competitiveness – not just from Apple – crushes its profitability.
During Thursday’s trading session, RIM shares have gained 62 cents, or 1.25%, to $47.95. MSFT is down 0.59% to $25.91 and AAPL has lost 0.25% to $348.71.