RIM – Microsoft Licensing Deal Signed

By Thea Neuman (Google)

Research in Motion from the Blackberry fame of mobile phones has recently signed a licensing agreement as a patent with the Microsoft which states the use of Microsoft’s file system on Blackberry smartphones. The financial terms of the agreement were unavailable, but the agreement gives RIM access to technology concerning file allocation, making it easy to handle large files.

RIM shares gained a total of 2.4% in the stock exchange of Toronto after announcement of the agreement and closed with 17 cents up to $7.23. Since smartphones are increasingly being used by customers to view multimedia applications involving watching as well as shooting HD videos, the size of files has been growing.

Microsoft claims that its new system has the capacity to expand size of files which can be handled by devices using flash memory, thereby increasing the speed of access to these files. David Kaefer, the general manager at Microsoft and in-charge of Intellectual Licensing, says that the smartphones need more capacity in order to display high definition images as well as data, when compared with older generation mobiles. He also states that this agreement with RIM will also highlight the latest file system like exFAT which tends to address customer’s specific needs directly, thereby greatly affecting mobile market.

The deal has been signed when RIM is soon scheduled to release its Blackberry 10, a new generation smartphone. The company has high stakes on this launch, as its future depends on the operation system used in this device. The BlackBerry 10, on its arrival, will have several competitor brands of smartphones in the market. It also faces a threat from the recently launched iPhone 5 by Apple.

As per the IDC sales numbers, Apple as well as Android smartphones are seen dominating the market with shares over 85%. Blackberry with its 4.8% market share is far behind the latest smartphones in its sales as well as popularity according to the charts on market analysis. The real test of the company and its position with investors will be determined by success of its brand new launch, BlackBerry 10.

Rim has been dominant in the market of smartphones before it slipped down to be replaced by Apple, Samsung as well as other competitors. This tech giant is expecting a revival of past with introduction of Blackberry 10 in mobile market in first quarter of the year 2013. With the new device, RIM hopes that it will be able to regain its market share which has been grabbed by iPhones and Google devices that use Android operating system.

While these speculations may prove to be true, yet it remains a long journey to customer hearts. Apple, Samsung, HTC seem to have created a niche in the customer preference, which will be extremely difficult to replace. The speed with which technological advancements in the operating system are taking place, Blackberry needs a lot to catch up.