Synergies between BlackBerry and Flip are tempting, but just shrink Cius already
Guess we don’t have to wait for the season’s to change before the next hot rumor pops up. We were just getting settled with the latest “Cisco eyes EMC” speculation when this came up this week:
Cisco making a run at RIM?
Granted, it’s total speculation and a long shot at that. And we don’t have the original document from investment firm UBS that states that it would be a good fit. But two blogs – Eric Savitz’s Tech Trader Daily, and Motley Fool — picked up on it and, well, all the pieces seem to fit.
First, instead of adding smartphone capabilities to the one-trick-pony Flip videocam, Cisco could buy the maker of BlackBerry and enhance that with Flip video capabilities. Why Cisco acquired a sole HD videocam company and product when smartphones are adding that capability is still a head scratcher. This would take care of it but boy, would it be expensive. As Motley Fool not so subtly points out:
Obviously, it would be stupid for Cisco to throw even more money at what is shaping up to be a bad initial acquisition of Flip’s parent company.
But Fool and UBS note that Cisco could acquire the Canadian company with some of the offshore $30+ billion without incurring the onerous repatriation tax the U.S. would require if it bought a domestic company.
And adding video to a BlackBerry would further Cisco’s videoconferencing/TelePresence/collaboration anywhere strategy. Everyone – well, almost everyone – in the business world has a BlackBerry or smartphone equivalent. Nobody has a Flip. If Cisco is serious about making TelePresence collaboration a ubiquitous business tool, it needs a smartphone. No one will carry around two devices when one will do. And guess which one will win?
Then again, it could just shrink Cius down into a smartphone form factor…
Both blogs also note UBS’s point that Cisco could leverage RIM’s mobile voice system. MVS merges corporate desktop phones with BlackBerry smartphones to allow users to answer calls to the corporate deskphone with their BlackBerrys. It can also allow users to make calls from their BlackBerry that appear to originate from their deskphones.
Cisco has already harnessed this type of capability with its new IP phones for the SMB market. Mobile Link allows users to walk into an office while on a cell-phone call and transfer the call to the deskphone’s handset or speakerphone via Bluetooth.
Both blogs note that UBS feels RIM could be a good fit if the valuation is right. RIM’s market cap currently stands at $25.7 billion. Combined with the $500 million Cisco coughed up for Pure Digital and its Flip, the price for buying its way into TelePresence smartphones might be too high for Cisco. Might it make more sense to make Cius smartphone-sized… and capable?
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