For a cash consideration of $55.5 million, Research In Motion Limited has offloaded its cloud content service unit NewBay to Synchronoss Technologies Inc. Viewed as a part of Research in Motion’s restructuring effort, this partial disposal of its investment includes selling of its non-core business.
A wholly-owned subsidiary of Research In Motion, NewBay Inc., allows its customers to safely store, share and deliver content like photo albums, video social networking across smartphone and tablets. Its cloud services have the top telecom carriers of Europe, North America and Asia as its customers and are delivered to millions of users.
Ontario-based Research In Motion, Waterloo, to better compete with the big cloud-based players like Microsoft Corp., Google and Apple, acquired NewBay in 2011 for approximately $100 million.
Nevertheless, translating into a loss of approximately $45 million, the company is offloading it at a much lower price. At the end of fourth quarter of 2012, the transaction was expected to close. Alternatively, for Synchronoss, the deal will be quite beneficial. For mobile carriers around the world, the integration of NewBay will allow it to become a leader in providing cloud-based mobile content services.
Besides that, it will also acquire NewBay’s rich customer list, which includes Vodafone Group Plc., AT&T and Verizon Communications Inc., among others. Scheduled to launch in the first half of 2013, the Canadian company is now betting on its new Blackberry 10 OS-based devices.
It could be a potential game changer for the Canadian company particularly in the productive North American market, only if the new smartphone with its new developed feature is able to lure more enterprise clients.
By reducing its global work force by nearly 2000, the struggling Canadian smartphone manufacturer is going through a restructuring process and by the end of 2013, and plans to improve the effectiveness of its resources thereby saving $1 billion.
Edited by Allison Boccamazzo