Research In Motion in Buying Spree - Analyst Blog

Research In Motion Ltd. (RIMM) moves ahead with its acquisition spree. Recently, the company has acquired assets of DataViz, the makers of the popular Documents To Go application. The acquisition news came shortly after DataViz’s announcement to cancel the development of Documents To Go solution for Palm WebOS. Palm WebOS is Palm's proprietary mobile operating system running on the Linux kernel.
 
As part of this acquisition, Research in Motion also hired the majority of DataViz’s employees, who will exclusively focus on supporting the BlackBerry platform. Market sources are abuzz that Research in Motion shelled out approximately $50 million in cash to acquire DataViz, which will have no material impact on the company’s financial results.
 
DataViz currently provides Documents To Go application to all major smartphone platforms, including the Apple Inc.’s (AAPL) iPhone, Google Inc.’s (GOOG) Android and Nokia Corp.’s (NOK) Maemo. DataViz’s Documents-To-Go services allow users to open and modify Microsoft Corp.’s (MSFT) Office-package including Word, Excel and PowerPoint documents and synchronizes them between the computer and mobile devices.
 
Last month, Research in Motion acquired Cellmania, a California based company, which makes software used to run mobile phone software stores. Cellmania caters to big shot clients such as Sprint Nextel Corp. (S) and AT&T Inc. (T). Research In Motion intends to use Cellmania’s technology and expertise in its BlackBerry Application World to boost its operating system, user interface and software ecosystem. Hence, Research in Motion will attain the same level as Apple's and Google's Android operating system.
 
Research in Motion is also reportedly looking at its options for acquiring a mobile ad network. The company continues to face stiff competition from Apple’s iPhone and several newly launched smartphones based on Google’s Android operating system, especially Motorola Inc.’s (MOT) flagship DROID smartphone.
 
Nevertheless, robust growth of 3G smartphones across the globe may benefit Research In Motion in the near future.  The strong brand value of BlackBerry is also expected to sustain the earnings momentum.
 
However, we also believe that Research in Motion desperately needs a mobile phone that can out perform iPhone or Android based-phones in the market. Failing which, the company will face serious issues in maintaining its competitive edge in the market, which is rapidly changing in terms of technology, price and data plan provided by the carrier.
 
We maintain our long-term Neutral recommendation for Research In Motion. Currently, it is a short-term Zacks #3 Rank (Hold).

 
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