As predicted here, Certicom succumbed to RIM’s second (hostile) takeover offer on Wednesday. RIM had to double its original offer, which is 43% higher than an overture from Verisign, to seal the deal for Certicom.

RIM’s victory, if you will, isn’t a surprise for a number of reasons.

First, Certicom or other subjects of a takeover offer almost never take the first offer from a potential suitor.

Second, RIM’s a better strategic fit for Certicom as the companies have worked together for years. This means RIM would spare almost no expense to win the day. RIM would rather control Certicom’s future than have it end up in the hands of Nokia or another partner that have licensing deals with the company. RIM needs Certicom’s technology to help it maintain what it considers to be a technological advantage with large organizations and key customers such as the U.S. Department of Defence.

Third, Certicom is a better strategic fit with RIM ,which has been on a patent collection tear for several years. Certicom has some 470 security patents, which helps RIM round out its patent portfolio once the deal is completed. RIM, as most tech followers remember, had to pay a firm called NTP $620-million in 2005 after a high-profile court battle that could have led to the shutdown of BlackBerry service in the United States.

The BlackBerry maker boosted its offer for the wireless security software maker to $3 a share in cash on Tuesday or double its previous bid which was announced last month.

It also probably brings the parties closer to a deal even though Certicom’s closing price of $3.20 on the Toronto Stock Exchange suggests investors think a counterbid is in the offing.

Few companies have as the cash, wherewithal, or reasons to buy Certicom as RIM.

Waterloo, Ont.-based RIM needs Certicom’s elliptic curve cryptography (ECC) technology to help protect its perceived technological lead in the fast-growing smartphone market.

RIM’s trying to stay ahead of competitors, such as Apple and Nokia, in order to command the premium prices for its high-end models. Providing a more secure product is one way to protect its lead with business customers in North America.

RIM also needs Certicom’s technology to help secure handsets that will sufficiently secure electronic messages for the U.S. Department of Defense and other key customers.

RIM would rather control Certicom’s development future than have it end up in the hands of a competitor such as Samsung or Nokia which have patent licensing deals in place with Certicom. RIM currently uses Certicom technology in some BlackBerry models.

Then there’s the tax credits, which RIM can more easily use than most companies given the fact it’s based in Canada.

Certicom could also theoretically more easily fit into the RIM fold than that of a white knight as it’s been a RIM partner for years.

So pay no mind to the courts and RIM’s original lowball offer, which was soundly rejected by Certicom.

You can probably also ignore the offer of Verisign, the U.S. security software maker which bid $2.10 a share for Certicom in January though another bid for RIM may yet come. Certicom needed to solicit the Verisign offer in order to open the RIM vault up further.

Chalk it all up to corporate gamesmanship.

In any case, Certicom will soon be subsumed by the BlackBerry borg.

[tags] RIM, Certicom, Verisign [/tags]

But there is far too much being made of the competition between Apple and RIM.

If someone dropped onto Earth from another planet and read the latest edition of BusinessWeek, the only conclusion they’d be able to draw is that there are two smartphones (a.k.a. converged mobile devices) available today.

BusinessWeek is the worst offender – the well-respected business magazine has published three stories in as many months on the “battle” between the companies.

It’s easy to see why pundits or reporters want to turn the smartphone market into a RIM and Apple fight – both companies are growing by leaps and bounds and offer cool devices. Apple will eventually offer BlackBerry-like corporate e-mail functionality on its iPhone. The BlackBerry may even have a decent music player in it one day.

Fact of the matter is the companies already compete albeit for the prosumer, which is a smaller but fast-growing slice of the market. Apple is a relative newbie (albeit a fast-growing one) to the smartphone game while RIM has extended its reach into the consumer segment.

But Apple and RIM are also up against cell phone behemoths such as Nokia, Samsung and Sony Ericsson, which makes the BlackBerry vs. iPhone argument kind of a silly one. Nokia and Samsung are the top mobile phone vendors worldwide BTW. There are a number of other mobile phones that offer wireless e-mail functionality (courtesy of RIM’s BlackBerry Connect program) and music-playing capabilities.

(In a sense, the companies also compete against the service providers, at least in Canada, which maintain stubbornly high data prices that (believe it or not) dampens demand for BlackBerrys but that’s a separate post.)

Consumers want one device to manage all types of information be it music or messages. Ideally, those devices will give people access to information “in the cloud” as well, if not from the desktop. RIM and Apple are trying to become the provider of that pre-eminent provider of such a device. So are others. It’s not that big a deal.

The second BlackBerry blackout in as many weeks casts doubt on the company’s ability to support the two million new customers it expects to add this quarter which ends on March 1. RIM’s revised forecast is 15 to 20 per cent higher than the 1.8-million figure it gave in December.

Yesterday, users of RIM’s BlackBerry Internet Service (like yours truly) were without service for some of the morning. One BlackBerry outage newsgroup claimed half of BIS users in the Americas were without service – members of the group began reporting problems at around 6 a.m. on the U.S. East Coast. The issue appeared to get progressively worse, initially affecting about half of users in the Americas but eventually affecting all users. The blackout only affected users of the BIS service – last week it was BlackBerry Enterprise Service users that were left without their CrackBerrys for hours.

RIM’s corporate communications department chalked up yesterday’s BIS outage to regular maintenance work. No word as to whether BIS users were warned of the update beforehand.

A wise man named Vint Cerf (yes, the man who is widely credited as a "co-founder" of the Internet,) once told me RIM’s problem was one of stochastic instability (a prize of some sort to anyone who can explain the concept in layman’s terms please and thanks.)

I took that to mean the company’s rapid subscriber growth has put undue strain on its infrastructure (e.g. the network operating center) but I could be wrong.

My experience and that others over the past two weeks makes one wonder however.

The struggling handset maker is uh, trying to console Crackberry users still suffering from withdrawal after Monday’s network outage. The company’s taken out full page ads in several national U.S. papers and media outlets to let people know that Palm users don’t have to worry about such things as third-party servers and blackouts.

The company’s U.S. homepage is also running the ad that promises Palm devices will deliver "uptime."

The struggling handset maker of course will take any opportunity it can get to take RIM, a smartphone market leader, down a peg or two.

Canada being RIM’s backyard, you’d think Palm would roll the ads out here. You know, hit the giant where it hurts. Alas, I have yet to see the ads in any Canadian publication or media outlet. Have I missed them?

The company’s longtime Canadian president, Mike Moskowitz, left in November last year after at least 10 years as division head to become XM Canada’s president. What’s going on with Palm in Canada?

RIM said that millions were left without service (horror of horrors!) in the U.S. and Canada because of an “internal data routing system within the BlackBerry service infrastructure that had been recently upgraded.”

It’s roughly the same excuse used last April when a similar outage occurred.

The latest upgrade was meant to boost network capacity and speed message routing, RIM said.

Wasn’t this issue supposed to have been solved already? Oh well. The carriers are happy as long as revenue per user keeps going up and cool new devices can be placed in the hands of people who haven’t owned BlackBerrys previously. As for the customer, well, a hiccup now and then is going to have to be tolerated.

As Rob Pegoraro points out, the downtime shows the danger of RIM’s “eggs in one basket” approach to network management.

1) We are a nation of whiners. I mean, how many people’s lives were truly endangered or disrupted yesterday by the fact. Surely, people that needed to be contacted yesterday could have been reached by phone or text message or by yodelling across Parliament Hill.

1 a) Garth Turner seriously needs to get a life. The Liberal MP declared yesterday that the Liberals were in "crisis" and that the BlackBerry outage made him and fellow politicians feel "isolated." Pathetic. Mr. Turner, you’ve officially lost one vote – I am going to vote for the Tories or NDP – any other party – come spring or whenever the next fruitless election is held. Anyone or any party that can’t run a caucus meeting without functioning BlackBerrys doesn’t deserve to run the country.

2) Nonetheless, what in the name of Jim Balsillie is going on at RIM? I seem to recall a statement from Mr. Balsillie some time ago that BlackBerry outages are "very rare" or some such verbiage. These outages seem to happen at least once a year if not more. Am I wrong?

3) This is more of a question for RIM’s communications department. Why is it during BlackBerry outages, your company is silent? Is it a tacit agreement with the carriers, such as Bell Canada, that they will handle all communications matters related to BlackBerry outages? Users would like to know when service will be up and running again.

4) My BlackBerry, which runs on the BlackBerry Internet Service, ran perfectly all day. This says to me the problem is obviously located in Waterloo, Ont. where RIM’s unique network operating centre (NOC) is located. RIM – what’s the problem and is it going to affect service in future? Can RIM’s network infrastructure keep up with subscriber growth?

5) CNBC’s coverage of the BlackBerry yesterday was over the top. There are 12-million BlackBerry subscribers worldwide – a three-hour outage doesn’t deserve the same kind of coverage the war in Iraq or other world issues receive no matter how much air time you have to fill.