RIM Shot: Critics Worry 'Shakeup' Augers More Of The Same
Blackberry parent company Research in Motion “is “bowing to critics and market forces,” as the New York Times headline puts it, by replacing the co-CEOs who developed “the innovative device that was the first to reliably deliver email over airwaves.” Thorsten Heins, who joined RIM in 2007 and most recently has been COO for software, hardware and sales, becomes CEO effective today.
Mike Lazaridis, who co- founded RIM with a childhood friend in 1985, becomes vice chairman and will lead an “innovation committee,” Ian Austen reports. Jim Balsillie, who invested $250,000 in the company in 1992, remains a director and will maintain his stake in the company.
A German national who is well respected in the industry but is not necessarily known on Wall Street, Heins previously was CTO at Siemens AG.
“Going forward, we will continue to focus both on short-term and long-term growth, strategic planning, a customer- and market-based product approach, and flawless execution,” Heins says in a statement released Sunday. “We are in the process of recruiting a new Chief Marketing Officer to work closely with our product and sales teams to deliver the most compelling products and services.”
Observers, however, are already wondering exactly what will change, and if it will be sufficient to keep the company viable in the rapidly evolving market. Indeed, Heins himself tells Iain Malow: “Change to what? Change for what?”
“In the company’s release,” Forbes’ Elizabeth Woyke points out, “Heins described RIM’s current direction, which is focused on a transition to a new operating system and an increased investment in marketing, as “the right path.’”
That path took a precipitous downward slope several years ago.
“Although the stock price has been on a slide since February 2011 and new bad news seems to come out of management every few weeks,” Tim Plaehn wrote on Seeking Alpha last month, “the forces causing Research In Motion's decline in profitability have been several years in the making.”
In short, RIM squandered its lead to Apple and Android smart phones and botched its attempt to market a tablet called PlayBook, which The Guardian called “a flop from start to finish.” And it has suffered delays in its next generation operating system.
RIM commanded just 11% of the market by the third quarter of 2011, according to NPD Group and reported by Forbes’ Elizabeth Woyke –- “far behind phones powered by Google’s Android operating system, which claimed 53% of the market, and Apple’s iPhones, which made up 29% of the market.”
“Think back and you'll recall a time when RIM devices seemed to exude rubber-clad cool: if you didn't have a BlackBerry you wanted one, and business users who did possess them loved them so much they'd work in bed with them, creating armies of BlackBerry widows in the process,” writes Jonny Evans in his tellingly named “Apple Holic” blog at Computerworld.
The changes at the top aren’t going to bring back those glory days, he says, because Apple went after the widows by focusing on the user’s experience “and when their business-focused husbands saw what they were doing, they wanted a little iAction too.”
A survey that ranks smartphone “satisfaction” with various brands conducted by ChangeWave Research shows Apple alone at the top of the heap with 75% of respondents claiming they are “very satisfied. RIM is dead last with 22%. Sandwiched in between are Samsung (47%), HTC (47%), Motorola (45%), LG (31%) and Nokia (23%).
In an editorial headlined “RIM's New CEO Isn't The Shakeup It Needed,” Engadget’s Darren Murph claims that “this CEO speak smacks of the exact same thinking that has positioned RIM where it is today: miles behind Android and iOS.” Later in the piece he writes: “RIM needs more than an enthusiastic, intelligent guy who has already been soaked up in the company's culture. RIM needs a shock to the system. RIM needs a reboot.”
Not so, according to Heins. "It's going to be continuity, but it's not going to be a standstill," he tells Will Connors in the Wall Street Journal. Heins believes RIM’s next-generation operating system will “attract critical mass among developers and wow consumers and business users alike,” writes Connors and, if he’s right, it might consider leasing the software to other companies “on a case by case basis.”