RIM may abandon BlackBerry OS and standardize on Windows Phone

RIM is in such bad financial shape that it has considered abandoning its BlackBerry operating system and having new devices run Windows Phone instead. So reports Reuters. If true, it could be a big win for Microsoft.

RIM's just-released quarterly earnings were nothing less than catastrophic. It shows dramatically lower revenue, and a $518 million loss for the quarter than ended in May.

That should surprise no one. BlackBerry market share of the smartphone market has been plunging precipitously -- 6.4% for the first quarter of 2012, which is about half of its market share a year previously. And the only way from here is down.

The news only gets worse. The launch of BlackBerry 10 devices has been postponed, to early 2013, which is more than a year than initially expected. The reason? RIM says development of the new operating system has "proven to be more time-consuming than anticipated," according to Reuters.

Given all that, it's hard to know how RIM can survive. Reuters says that one option RIM is considering is to abandon the BlackBerry OS and standardize on Windows Phone. Reuters says that Microsoft CEO Steve Ballmer approached RIM after the departure of several long-time executives and made a pitch to do just that.

In addition, a deal could include Microsoft buying a stake in RIM, and also pay for a variety of expenses, such as marketing.

The deal would make a great deal of sense for Microsoft. With RIM and Nokia both standardizing on Windows Phone, Microsoft could finally gain significant market share in the smartphone market.

RIM is looking at other options, so a Microsoft deal might not happen. But if it does, it will give new life to struggling Windows Phone.

Preston Gralla is a contributing editor for Computerworld and author of more than 40 books, including "Windows 8 Hacks" and "How the Internet Works". You can follow him on Twitter or Google+.