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?
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
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Plus, after much ado, Softbank is oh-so-close to acquiring Sprint.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.