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Geoff Robins / Reuters
Thorsten Heins of Research in Motion.
A management shakeup at Research in Motion this weekend has seen Thorsten Heins, a company insider, take over as chief executive officer, succeeding Mike Lazaridis and Jim Balsillie.
The departure of the co-CEOs was designed to quell investor impatience over the BlackBerry maker’s recent lackluster performance. But the appointment of Siemens veteran and former COO Heins seemed to confound more than reassure Monday, sending Research in Motion’s shares down sharply.
“As much as people have called for a change at the top, I actually think [the company’s] problems aren’t necessarily leadership related,” said James Faucette, senior research analyst at Pacific Crest Securities. “I think the problems are structural and market-based.”
New CEO Heins outlined his vision for the company’s future during a conference call Monday morning, saying Research in Motion is evolving its tactics but that a “drastic change” to the business is unnecessary.
Analysts like Faucette don’t agree. While there’s no “silver bullet” to fix Research in Motion’s problems, dramatic changes are needed.
“They need to come out with better products, faster and on time,” he said.
Heins has indicated that speeding up the development process is on his to-do list, but the company has fallen so far behind in so many key areas that a growing chorus suggests Research in Motion might be better off with that drastic change Heins eschewed.
“The rumors until last night [were] that the position would go to a financial person,” Carolina Milanesi, vice president of research in Consumer Technologies & Markets at Gartner, said in an e-mail message, adding that such a choice would have signaled to investors that a strategy involving a sale was, at the very least, under consideration.
With Heins ensconcedin the top spot and former CEOs Lazardis and Balsillie still on the company’s board, such a prospect appears unlikely for now.
Edward Snyder, managing director at Charter Equity Research, said even with a new CEO, Research in Motion still faces significant hurdles.
“The phones are dated and don’t have a lot of the features and benefits” that customers now expect thanks to the growing ubiquity of iPhones and Android devices, he said, and the company has been largely unsuccessful in its efforts to attract app developers.
Research in Motion’s plan to create its own operating system was a time-consuming, expensive endeavor that hasn’t borne fruit and, in Faucette’s view, never will.
“Continuing to kick that horse is going to lead nowhere,” he said.
Heins has expressed a commitment to BlackBerry’s forthcoming operating system, which has been plagued by delays and is set to debut late this year. But even analysts who are bullish on the company’s long-term prospects say the long wait will give the company some short-term heartburn.
"[U]ntil BlackBerry 10 handsets launch we believe RIM will continue to be challenged and could even see a loss,” Peter Misek, equity analyst at Jefferies, warned in a recent research note.
Misek has a brighter view of BlackBerry 10’s potential than Synder, saying in his note he sees “tremendous value” in RIM's network that will be fully realized once the new operating system is in use.
“We see a licensing deal and other potential monetization strategies as a path to unlocking that value,” he wrote.
Conversely, RIM could throw in the towel on its operating system and run its next-generation devices on Android.
“They’ve got to stop competing with Apple and Google,” said Ted Schadler, principal analyst at Forrester Research. “There’s no way they're going to win.”
Ditching the operating system, which RIM executives have been hyping up for months, would be a drastic move as well as a potentially risky one. The upside is it would free up resources and let the company focus on what analysts say is its crown jewel: a secure, self-contained worldwide network for data delivery.
“The network’s extremely valuable,” Schadler said. “If you're an organization that wants a secure end-to-end delivery out to the phone, what they have that no one else has is a secure data network globally.”
As Google and Apple have dismantled RIM’s dominance, some suggest that it would be better to cut its losses and funnel its resources into its enterprise business, a market that values the security and delivery capabilities of the RIM network to a greater degree than the average Angry Birds-playing consumer.
“I think they should focus on reducing expenses and try to improve the cash flow... and try to reposition the company,” Faucette said. “They should look at going back to being direct to enterprise,” he added. This would mean a substantially smaller RIM, he acknowledged, but it would also give the company a way to stand out among its competitors.
Either way, RIM’s new CEO has to decide which direction it plans to take soon. Investors punish bad decisions, but they look even less favorably on indecision.
“RIM needs to decide if BlackBerry 10 is what they want to build their future on and if so drive this aggressively,” Milanesi said. “If not and they decide that Android is the future they need to focus on enabling Android in the enterprise where vendors are still struggling today.”
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You better keep up with what consumers desire , or you'll end up like "Kodak".....
To play CEO for a moment, I think RIM stands its best chance doing what IBM did years ago. Call it quits with the consumer marker and instead focus all efforts on catering to the Corporate/Government market. Most facets of government use Blackberry because it is secure and has a no-nonsense look and operation. They should use that to their advantage, as IBM did, because right now their products are bland because they really don't know who they are selling to. So I think their first goal should be to find a market. Whatever they decide to do I think the article said it best, "they can't win if they try and compete against Apple or Google. "
i can honestly say that my blackberry curve was the absolute WORST phone I have ever owned. Had to be replaced 5 times, 5 TIMES - and it wasn't because the phone was abused in any way shape or form. One time the "replacement" phone that was shipped to me was defective right out of the box. Begged my carrier to give me a different phone but they would not (said I could purchase an android for full retail price). Finally decided it was worth it to break the contract and get an iphone. Couldn't be happier.
Im in shock to hear that Blackberry is in the condition its in. Blackberry, as long as theyve been around has been a professional communication tool for those who arent looking to carry around a toy all day. For a moment through 2007-2009, Blackberrybecame trendy because texting was officially becoming the primary mode of communication and users enjoyed the BB devices keyboards, crystal clear displays and more professional appearance. Other companies jumped on the bandwagon, started designed more classy looking phones (brushed aluminum frams, chrome accents, and high resolution displays) which, if you noticed, has stuck with consumer appeal.
Now, I think BB has been on the right track and even though they have a couple bugs to fix with some of their new products, they really aren't too shabby. Blackberry has always been in the marketplace, consumers saw something they liked about BB, but bull@!$%# features prevail. Blackberry is a professional communication device and Id like to see it stay that way. Games, shopping apps, and Facespace programs...leave that to the toys. Blackberry devices are meant for adults. Adults who are looking to stay organized, compact, not get lost in a bubbly operating system with rainbows and unicorns.
I am a Blackberry user. I take communication serious, for the most part. If youre looking for a device that makes communicating simple, staying organized a breeze, and has a professional and classy exterior styling - this is the device you've been looking for. Blackberry, you havent done anything wrong...you just couldn't hold the attention of the consumer body. They want glam and toys. Stay the course, fix some of the bugs in the Playbook and everything will be fine.
If you build it, they will come.
Pretty funny that you consider the BlackBerry to be a "professional communication device" with all the outages they have. But hey, if carrying one still makes you feel like you did in 2005 then by all means go ahead while the rest of the world continues to leave you behind.
There is no way you could possibly believe the rubbish you just wrote. Let me guess, your comment about carrying around a toy is directed at the iPhone? Have you used an iPhone? I'm a business owner who uses my iPhone every day - for work to manage contacts, schedules, appointments, email, proposals, buy airline tickets, hail cabs, book hotel rooms, find directions to where I'm going, etc.
I think RIM should hire you - you seem to have it all figured out - fix the bugs and stay the course. Build it and they will come. Those are brilliant suggestions that they should be taking to heart.
Consumers don't want toys, they want technology to be seamless with their work and their lives. RIM isn't just dealing with bugs, but wholesale issues with who they are and why they're relevant (or not). They had a brilliant piece of technology that they thought would carry them forever into the future. Unfortunately, the dolts running the place didn't realize that other companies would not only catch up, but surpass them in both tech and form/function.
You really need to get out and try using an iPhone or Android phone before commenting like you have.
I wouldn't have a BlackBerry again if they gave it to me. Android is a MILLION times better and is more versatile.
What is to be confounded for? BB has been left behind by almost EVERY phone. If they are to survive they need to listen to their customers. As of today, BB is the crapiest system in the market!
I will say this for Blackberry- they created thousands upon thousands of high paying jobs for Canadians. Not like their main competitor who 'outsourced'
Remember Blackberry CEO's are hockey men too and the only way Canada hockey men solve anything will be with brawl. Look for bench clearing brawl before Blackberry men resurface
They are entering a death spiral caused by the co-CEO's (one of the dumbest ideas) and the new CEO and board is either too arrogant or too ignorant to understand the peril they are in. Unless they have an "ah-ha" moment in the next 60 days they are toast because the product development cycle for phones and software is too long to allow them one more misstep.
amen to that - just to hit their stay the course schedule, they would have to have functioning phones, tab, os now and they don't have that. There is no way they are going to hit timelines at this point.
I have the Backberry Playbook 1.0, and it blows away the iPad and Andriods for the work stuff. True it does not have 700 versions of hangman or solitaire to be downloaded, and I can't play with angry birds, or use an app to read MSNBC, but I can read MSNBC on the browsewr, and watch all the videos.
I can't wait for the 2.0 release to see what they add. And later this year, they will have a phone with the same software.
HTML5 is the future of apps, and BB PB does it great in the browser today, by March even better.
I have a Blackberry Storm2. It is very slow and difficult to use on the web. It is also a very "buggy" device. I am seriously considering an Apple iPhone. However, the one unique feature about the Blackberry device that impresses me is that when I am at my desk with my Windows PC, my iPad, and my Blackberry, I always receive any email 30 seconds to several minutes earlier with my Blackberry than my other devices. When I go to the phone store and describe my most important requirements which are Email and telephoning, they always recommend Blackberry. When I add that battery life is also very important, they recommend Apple. Although the carrier I have (Verizon) is very big on Android, they tell me that if you set them up for very frequent polling for emails the Battery life is bad.
I have been a Blackberry user for several years, and if the devices were more reliable it would probably be a difficult decision to leave them.
The CEO shuffle continues, complete with fully preloaded golden parachute.
These companies wonder why they are stagnant...maybe it's because none of them have seen fresh blood in 20 years.
Wonderful and better clarifying one about blackberry related. I just admire it.