Microsoft may still buy RIM?

rimwp7 Even the well-received announcement of Windows Phone 7 has not caused rumours of a RIM buy-out by Microsoft to die.

"It’s something I know they’ve talked about — buying Research in Motion or even Nokia," Toan Tran, an analyst at Morningstar, said of Microsoft. "To really compete in this business, Microsoft needs to get into the hardware business, where they are able to control the entire user experience."

"Apple has shown that’s the model that works," Tran added. "In a consumer device, people just want something that works, they don’t want something as complicated as a PC."

Microsoft has about $35 billion in cash and short term investments and a market cap of around $248 billion, making RIM’s $39 billion market cap pricy but affordable.

Microsoft has always resisted competing with their OEM’s, but as traditional Windows Mobile OEM’s stray to other OS’s this may become less of an issue.

The new consumer focus of Windows Phone 7 series may also be a sign of Microsoft abandoning the Windows Mobile business market, leaving the company in need of another route into the enterprise market.

Chief Executive Steve Ballmer has however pooh-poohed the idea:

"The word ‘ever’ is a big word, but I certainly don’t feel like that’s the right strategy for us today," Ballmer told Reuters at Mobile World Congress recently.

"Buying somebody would be a shortcut," said Kim Caughey, an analyst at Fort Pitt Capital Group. "But if they can give business users more functionality (with the new phones), they have a shot."

Morgan Keegan analyst Tavis McCourt said he did not believe Microsoft has yet given up on its software licensing strategy:

"Microsoft doesn’t want to be in the hardware space. It would alienate its other hardware customers," said McCourt.

Do our readers believe the rumours of a RIM purchase is credible? Let us know in the comments.