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RIM dismisses report of splitting firm in two

Three people on the floor of the New York Stock Exchange display their Blackberry smartphones.

Richard Drew/AP

Without saying where the information comes from, a report by the Sunday Times of London says that Research In Motion Ltd. wants to separate the hardware side of the business from the services side, or else sell a stake in the company.

The report mentions Facebook and Amazon as potential buyers, but on Sunday several people close to RIM dismissed the news as "a silly fantasy," and "one of the most ridiculous ideas I have heard in a while."

RIM spokesman Nick Manning, meanwhile, said the company's top management remains committed to maximizing shareholder value by continuing on a turnaround strategy that will see RIM launch new devices in the coming months.

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The idea of splitting RIM in two – separating the hardware business that makes BlackBerrys and PlayBooks from the so-called "services" division that is responsible for the global network that relays the devices' messages – was an idea first advanced by former RBC Dominion Securities analyst Mike Abramsky.

Although the services side of the business is undeniably valuable, RIM's hardware sales account for roughly 80 per cent of RIM's revenue. One former RIM executive, in a previous interview, maintained that the failure of RIM's handset business was clouding the value of the valuable services division, which many corporations and government departments rely on for secure communication.

But two former RIM executives said on Sunday that top managers do not currently take the idea seriously, and one said that "splitting the two would accomplish nothing." According to one of these people, RIM's current CEO Thorsten Heins remains committed to the idea of RIM as an integrated company and RIM co-founder and vice-chairman Mike Lazaridis doesn't believe the idea of breaking apart the company would work either.

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