In recent weeks, I think the probability of Google acquiring Research In Motion has gone from almost 0 per cent to somewhere in the ballpark of 50 per cent, and I believe there are three dominant reasons why.
Before I get into my three arguments, I need to mention two things:
1. I have absolutely no knowledge that Google and RIM are even talking to each other. I often meet with people from Google and RIM, and on the occasions that I have brought up my theory, these people have given me feedback to the effect that I am probably crazy and that they would eat their own hat if it would ever happen.
2. I have to give full credit to Kevin Michaluk, founder and editor in chief of the outstanding Crackberry.com blog, who published this article on July 4, awakening my thoughts to the serious idea of Google acquiring RIM.
My initial reaction to the idea was to dismiss it largely based on the antitrust argument. Google needs another Department of Justice investigation just like Obama needs another increase in the unemployment rate. This argument remains valid in principle, but it is mitigated by the relative increase in importance of the other factors. RIM recently fell below $24 (U.S.), is expected to make $5.50 in earnings this year and has $3-billion in cash, making it a very easy buy for Google, even if you assume a monster 100 per cent-plus premium.
The market’s recent fall may also cause the feds to pull back their attack dogs in order to allow corporate America to engage in their constitutional right to pursue economic freedom, including merging.
If the feds are going to approve AT&T’s $39-billion acquisition of T-Mobile USA, how could they in good conscience block a smaller deal to acquire a company which the pundits are telling us is falling off a cliff?
Here are the three most powerful reasons Google should acquire RIM, right now:
1. Platform convergence
On Sept. 28, 2010, I published an article suggesting that RIM’s PlayBook tablet will be running Android apps. This theory of mine was subsequently confirmed by RIM in March 2011, and it will be extended to the QNX-based BlackBerry smart phones some time in “early” 2012, however RIM defines the term “early.” RIM looks to launch its Android app compatibility on the PlayBook soon, probably within the next month or two, although delays have been a recent RIM standard practice.
How does RIM do it? In 2010, RIM selected the Texas Instruments OMAP 4400 series chip to be the CPU foundation for its proprietary QNX operating system. On top of this, developers are able to very easily re-purpose their Android apps to run over QNX. Given how easy this is to do, it would be reasonable to believe that the hundreds of thousands of Android apps will run on BlackBerry within months from now.
Here is where is gets extra interesting from Google’s standpoint: Based on numerous media reports in recent months, we can now conclude that Google has anointed the same CPU family – the Texas Instruments OMAP 4400 series – to be the reference chassis platform for Android 4.0, aka “Ice Cream Sandwich” or ICS. This goes not only for tablets, but also for the much-more-important smart phones, constituting the vast majority of Android’s 550,000 daily activations. ICS 4.0 looks to launch on a small number of initial devices some time around Thanksgiving this year.
Folks, starting by the end of 2011, Android and BlackBerry will be on the same platform, and running the same apps. If this does not get your alarm bells go off, what will?
Yes, this will not gel completely until early 2012, but initial devices from the Google/Android side of equation are scheduled to hit the market by December 2011. You could have understood 50 per cent of this if you had read the Sept. 28, 2010 article, but it will be a lot harder to ignore this within the next six months.
The market certainly hasn’t given RIM credit for this. Why shouldn’t Google strike before the market wakes up to the significance of this convergence?
For all intents and purposes, despite all other differences, RIM is joining the Android ecosystem in the epic battle against Apple, Microsoft and eventually Google’s own Chrome OS. As they said during the Cold War, “There is no such thing as coincidence... .”