Should Hewlett-Packard acquire RIM?

The computer behemoth is struggling to catch up in the fast-moving mobile market. Is purchasing a flailing smartphone maker of yesteryear really the solution?

By Oct 4, 2012 10:07AM

Hewlett-Packard (HPQ) hired CEO Meg Whitman last year to turn the company around, but judging by HP's tumbling stock prices, she still has a long way to go.

With computer sales slumping as customers move to newer mobile devices, HP released a grim profit outlook for the coming year on Wednesday, sending its shares dropping 7%.

Whitman is getting a lot of free advice from armchair advisers, some of whom have urged her to buy BlackBerry maker Research In Motion (RIMM) to gain instant access to the smartphone market, but she flatly says that's out of the question. 

Should she reconsider?

Yes. This is HP's only hope

Hewlett-Packard and RIM "have one choice if they hope to survive," says Rocco Pendola at The Street. Apple and other well-positioned competitors are eating them both for breakfast right now, but if they consolidate -- and even join forces with another dinosaur, Dell -- they might actually have "a fighting chance." Then at least HP would have a solid smartphone to offer. After that, it could hire innovative hotshots and "create some excitement."

RIM might work -- but Nokia would be better

HP is considering "taking another stab at building a smartphone ... an Android one," says Christopher Versace at Forbes. After previous in-house false starts -- last year it gave up on the TouchPad and WebOS smartphone business -- it's "better off acquiring an existing player." RIM might fit the bill, but its BlackBerrys have "taken it on the chin" since employers started letting people use their personal phones for work. Nokia might be a safer bet.

Sorry, but HP knows better

RIM certainly needs to find a buyer to stay afloat, says Paul Shea at ValueWalk. Trouble is, the company's long-term prospects are so dark that its "shares may not be worth the paper they're written on." If anyone knows the danger of buying the beleaguered RIM it's Hewlett-Packard. Its "disastrous attempt to enter the tablet market" by purchasing Palm "almost led to it leaving the hardware business completely."

More from The Week

Oct 4, 2012 3:51PM
probably the dumbest article out there.  Have you paid attention to HP in the last couple years?
Oct 6, 2012 3:31AM
"Hewlett-Packard and RIM have one choice if they hope to survive...if they consolidate -- and even join forces with another dinosaur, Dell -- they might actually have 'a fighting chance.'" 

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