Following the dividend and share repurchase announcement, some of the speculation about how Apple (AAPL) might use its cash hoard has been put to rest. However, it still has a large amount left over, with the intention of allowing the company to exploit any potential investment opportunity that they consider worthwhile. How about a purchase of Research In Motion (RIMM)?
RIM's market cap currently stands at just over $7 bn. That's almost petty cash to Apple, even with a premium added for the takeover, and RIM has what I believe to be the things Apple needs.
Whilst the BlackBerry handsets may be going down the drain (and having owned them myself, I can see why) RIM's patents mean that the company still holds enormous value. RIM has thousands of patents, ranging from wireless technology to email systems to phone security, and so a purchase by Apple could be very useful.
As I discussed in this recent article, Apple has not yet made it into the corporate market. The primary reason for this in the smart phone market is that the iPhone is not secure enough in comparison to the BlackBerry. If Apple were to buy RIM, they could take advantage of its unique encrypted email cloud service, and introduce the enterprise email system to its phones. This could be a huge step towards making iPhones more suitable for business, and would give businesses the choice between iPhones and BlackBerrys.
In addition, a purchase of RIM would preempt the inevitable purchase from one of Apple's rivals. Whilst it would not be disastrous for Apple if Google (GOOG) got a hold of RIM's patents, it could see Apple involved in yet more patent litigation, and it would give Google a boost in the fierce battle between them.
Buying RIM would give Apple the 16.5 million US users that RIM had in September 2011, it would give it all of the important patents and software, including the very popular BlackBerry Messenger, and it would also give it an invaluable route into the corporate market that it is yet to exploit.
It's a possibility. What do you think?
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AAPL over the next 72 hours.