Research In Motion (RIM), the once mighty Canadian telecom company behind the BlackBerry, has undertaken a self-described less-than drastic leadership shuffle in an effort to reinvent itself.
Late Sunday, the company announced the resignation of its dual CEOs Mike Lazaridis and Jim Balsillie, who will be replaced by one new CEO, Thorsten Heins, formerly the company’s chief operating officer.
“I don’t think that there is a drastic change needed,” Heins said to a conference call of investors on Monday, The Canadian Press reported. “We are evolving our strategies, our tactics and processes… I want us to have a bit more of an ear toward the consumer market and understand trends — and not just do what the Street is telling (us).”
RIM also announced that Lazaridis and Balsillie would step down as co-chairs of the board, with board member Barbara Stymiest, formerly of Royal Bank of Canada’s Group Executive, stepping up into the role of chair.
Lazaridis, who founded the company and steered it through the height of its success in the late 2000’s as well as through its recent global service outage, will remain a vice-chairman of the board and Balsillie will remain a director with “no executive responsibilities,” The Globe and Mail reported.
Lazaridis admitted it was personally difficult for him to relinquish his leadership role, the paper added:
Mr. Lazaridis said the decision to step back from operational responsibilities was difficult to make after building the company from a start-up to a global franchise that at one point surpassed Royal Bank of Canada in market capitalization. But, he stressed, “The bigger mistake is waiting too long.”
Although the company has continued to report increasing annual revenues, the price of its stock has suffered a precipitous decline since it hit an all-time high of $148 U.S. in June 2008, giving RIM a market cap of $67 billion, making it the fourth-most valuable company on the S&P/Toronto Stock Exchange composite index, according to MarketWatch.
Unfortunately for the company and its shareholders and fans, RIM’s shares have lost almost 90 percent of their value since that time, as the market share of RIM’s signature BlackBerry line has suffered a similarly steep fall, down from an all-time high of 20 percent globally in 2009 to 11 percent in third quarter of 2011, according to research firm Gartner (it may be even less now).
And of course, all of that just underlines the most salient point: Customers are abandoning the BlackBerry family in droves and flocking to smartphones powered by Google’s Android operating system and Apple’s iPhone and iOS platform, including RIM’s formerly loyal enterprise users.
The appointment of Heins as CEO has so far done little to inspire renewed confidence, perhaps due to his repeated insistence that RIM is already on the right track.
Shares of RIM were down over 7 percent on the Frankfurt exchange and down almost 8 percent on the Toronto Exchange on Monday morning, CBC reported.
“Is Research in Motion CEO Thorsten Heins in denial?” asked Lance Ulanoff at Mashable.
RIM posted a video of Heins on Sunday night attempting to explain just why he was the right man for the job and why the company and its BlackBerry products were poised to recapture the market, but the video landed with a thud.
“This guy doesn’t exactly make you want to run through a wall to smash the competition,” Jay Yarow noted at the The Business Insider.
“For a brief moment, I had hopes that RIM had made a move that would unseat it from the funk it’s been sitting in for years,” wrote Darren Murph at Engadget, “And then I watched the introductory video of newly-appointed CEO Thorsten Heins.”
Heins, a German-born engineer who joined RIM at its apex in 2007, previously worked for German electronics giant Siemens AG for 23 years, holding various positions within the company, from R&D to sales, the official Inside BlackBerry blog noted.
However, even these attributes don’t seem to be wining Heins many fans on Wall Street.
“Heins is a product execution guy, he’s not a visionary,” Ehud Gelblum, analyst at Morgan Stanley, told Reuters. “Heins has to give people a reason why they need a BlackBerry. It’s going to be very difficult for him.”
Indeed, some analysts speculated that if Heins hadn’t achieved meaningful results by May, RIM could begin to solicit takeover bids, the Toronto Star reported.
But whatever happens with that, the real question will be whether Heins’s vision of RIM continuing a tradition of excellence and only making slight tweaks will be enough to regain the company’s momentum in the face of increasingly dominant competition.
RIM’s consumer market hopes essentially rest on the unveiling of its new “Blackberry 10” operating system (formerly known as “BBX”), which isn’t expected until later this year at the earliest. The Blackberry 10 operating system is designed to provide a unified platform across RIM’s mobile devices — from phones to tablets.
The standard corporate disclaimer at the bottom of RIM’s announcement of Heins as CEO might have put it best: “Many factors could cause RIM’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements…”
Stay tuned.
