Research In Motion’s earnings call showing
huge losses by the Waterloo, Ontario-based company was not a huge surprise.
Hardly anyone was expecting good results. But what followed was a series of
surprises that went off like depth charges around a sinking
submarine.

BlackBerry 10 wouldn’t arrive until the first quarter
of 2013, and there will be 5,000 layoffs. Couple that with the earlier
announcement that RIM
had hired JPMorgan and RBC Capital to review its strategic options, and the
picture is bleak.

So it’s no wonder that RIM opened June
29 off 15 percent on Nasdaq and then continued to fall. The market clearly
has lost faith in RIM’s ability to hang on for the next six to eight months
until BlackBerry 10 arrives. This is made worse when everyone realizes that
BlackBerry 10 is RIM’s last hope. If BB10 is dead on arrival, then it’s not
going to be a long good-bye. RIM as we know it will perish.

So the real question now is what are RIM’s
options? Obviously, the hiring of two major investment banks that deal in
mergers and acquisitions means that RIM is planning to sell something. But it
may not be the company itself. RIM may have decided that it’s time to offload
its device manufacturing and move to contract manufacturing, which is what most
other smartphone companies do.

Notably, the companies that are making money
on smartphones aren’t making them in Canada, and most aren’t making anything
themselves. While Samsung, which is the world’s largest phone maker, does build
its own phones, Samsung is also one of the world’s largest contract
manufacturers. But Apple doesn’t make its own phones; those come from Foxconn
factories in China. Google doesn’t make its phones either. Google-branded
phones and tablets are made by somebody else, such as Asus or HTC.

Having Samsung, for example, build the
BlackBerry 10 device would mean that the company can focus on its software and
its data-delivery business, which is RIM’s strong suit. When I saw the
BlackBerry 10 prototype platform at the BlackBerry World conference in May, I
didn’t see any distinguishing feature that wasn’t done in software. In other
words, there wasn’t anything in the BB10 device that couldn’t be made by a
generic smartphone maker.

At least by moving to a contract
manufacturing model, RIM could work with companies that have great expertise in
bringing hardware platforms to market and meeting specific and detailed
requirements. The Apple iPhone 4S is an excellent example of what can be done
with contract manufacturing. There’s a strong likelihood that adopting a
similar model would give RIM lower costs without any loss of quality or
control.