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Is Microsoft setting its sights on Research in Motion? By Steve Ballmer’s own admission, the iPhone is as much a threat to Windows Mobile as Google is to Microsoft’s search efforts. Windows Mobile has seen its market share eroded by fresher, more nimble competitors like RIM and Symbian-based smartphones. Given the lack of excitement around any new Windows Mobile devices or versions, is buying RIM a cheaper alternative?

A few years ago, Microsoft had managed to capture almost a quarter of the smartphone market with Windows Mobile. But uninspiring versions of the operating system, and several lackluster devices from various partners, have cheapened the experience, causing Windows Mobile to lose almost half of its market share to competing devices. Microsoft, in the face of actual competition, never succeeds in dominating markets—Windows took control in the post-Apple era because there was a lack of any serious competing operating systems. It is not difficult to imagine Steve Ballmer sweating over the erosion of the Windows brand in all its forms—since the Microsoft/Yahoo merger never happened, RIM could plug a hole in the (somewhat) leaky SS Windows.

Would this buyout make sense? Microsoft typically buys other companies for key technology or products to be assimilated into existing Microsoft product lines (think PowerPoint, bought from Forethought, Inc. in the late 80s and rolled into Microsoft Office). Windows Mobile is, at least technically, Windows code—proprietary as the day is long. RIM’s client architecture is Linux based (though no less proprietary), so the opportunities for integration are rather limited. A merged MS/RIM could even afford to keep both product lines up and running—anything to fend off the onslaught. 

With Apple muscling its way in, and Android soon to join the fray, Microsoft will need to control more than 10% of a market with five able-bodied competitors. Although the details would be tough to work out, the argument for power and market share is undeniable. So is this a silver lining, or a dark cloud? There can be no doubt that any MS/RIM merger would need serious scrutiny by antitrust authorities. And there is the risk that such a merger would spell the end of Windows Mobile entirely, either through cannibalized sales or deliberate replacement of the product line with the new RIM assets. Sound off in the comments section with your opinion!

Read [9 to 5 Mac]