Wednesday, November 30, 2005

Enderle: RIM on the Ropes

Rob Enderle analyzes the potential impact of US District Judge James R. Spencer's denial of RIM’s motion to enforce an earlier settlement with NTP at Technology Pundits. As Enderle notes, NTP pulled out of that settlement, which was valued at $450 million,because "NTP is aggressively seeking the maximum benefit from their wining position and, apparently they now want a lot more than $450M."

Enderle's situation analysis is that "NTP appears to have the power to say whether RIM stays in business or not and that has given NTP a rather impressive negotiating position." One scenario Enderle puts forth is NTP taking an equity stake in RIM that probably would come with voting rights and "perhaps a controlling power."

Enderle also notes the increase market competition RIM faces, such as Palm/Microsoft, and states "RIM knows they have to have their shop in order before that happens [launch of Treo 700W] otherwise the two firms are likely to cut through their market share like a hot knife through butter."

Enderle concludes

It would be wise for both companies to find an agreement they both can live with so that the fight doesn’t destroy what otherwise could still be a lucrative future for both NTP and RIM.