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Research In Motion Ltd (BBRY) & Nook: An Accretive Opportunity for this Software Giant?

Research in Motion Ltd. (BBRY)Research In Motion Ltd (NASDAQ:BBRY) seems to be on the outs with investors again. The shares, after jumping to $18 from $6, fell back sharply when the company recently reported disappointing quarterly results.

Barnes & Noble, Inc. (NYSE:BKS)’s Nook business seems to be in a worse predicament. After losing $475 million last fiscal year, the CEO recently fled and the company announced it would stop manufacturing the Nook tablet.

Given the news, the pair’s chances for long-term survival don’t look great. But each has some attractive assets that may offer substantial value to the right corporate acquirer. Software giant Microsoft Corporation (NASDAQ:MSFT) might just be that buyer.

Microsoft needs devices

Microsoft Corporation (NASDAQ:MSFT) boss Steve Ballmer has repeatedly said that the company’s future is going to be in “devices and services.” This means he’s looking to build a compelling ecosystem: an environment of mobile devices, software and computer hardware & services in a cloud structure that binds a user to the company.

With an already strong position in the enterprise-computing world, Microsoft could conceivably put a lock on the corporate ecosystem market if it had a well-integrated stable of mobile devices. If recent reports like the company’s talks to purchase smartphone maker Nokia Corporation (ADR) (NYSE:NOK) are accurate; Microsoft Corporation (NASDAQ:MSFT) is already trying to shore up this deficiency.

What Blackberry & Nook have to offer

Research In Motion Ltd (NASDAQ:BBRY) & Nook could help Microsoft fill the void. The original BlackBerry phone was once a staple in the corporate world and its keyboard layout is still very popular. After a lengthy delay, the company finally updated its legacy product with a new keyboard device called Q10. To get traction with a younger crowd it also launched a touch screen Z10 version. Including a new and cheaper Q5 keyboard phone targeted at emerging markets, Research In Motion Ltd (NASDAQ:BBRY) said it shipped 6.8 million smartphones in the last quarter. Not a bad figure when its core customer is taken into consideration.

The company has always made the business person its key market. But a trend toward employees bringing phones into the workplace stifled demand for BlackBerry’s product and reduced its clout with employers.

To fight back, the firm recently launched a new security solution known as Secure Work Space. This product, even available for devices running on Apple Inc. (NASDAQ:AAPL)’s iOS and Google Inc (NASDAQ:GOOG)’s Android operating system, segregates personal and professional data and applications on mobile devices. It lets the corporation allow employees to use their own device while safeguarding professional data at a minimal cost. An enterprise power player like Microsoft Corporation (NASDAQ:MSFT) could easily exploit this kind of innovation and a related fairly popular smartphone product line to its advantage.

Barnes & Noble, Inc. (NYSE:BKS)’s Nook unit might also be a nice fit for Microsoft. The business is clearly in trouble, as demonstrated by a 34% drop in device and e-book sales last quarter. The repeated slashing of Nook tablet pricing suggests that things will probably not be getting better anytime soon.

But Nook has some assets Microsoft Corporation (NASDAQ:MSFT) might find useful. The Nook tablet, by all accounts a workable device, could be a loss-leading entry level partner to Microsoft’s more powerful Surface product. Nook is also a major player in e-books, which account for about 20% of all book sales.

he brand’s reputation is good in the affluent serious reader market, and still delivers on popular e-book machines like the Nook Simple Touch. Beside e-books, Nook also offers Microsoft Corporation (NASDAQ:MSFT) a leading place in the growing digital education market. The Nook Study, a textbook reading app, could integrate well with other Microsoft products in the lucrative high school and university student markets.

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