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.
Heins said in a statement released Sunday.
“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. 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?”
Forbes’ Elizabeth Woyke points out,
“In the company’s release, 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.
Tim Plaehn wrote on Seeking Alpha last month,
“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, 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.”
Jonny Evans in his tellingly named “Apple Holic” blog at Computerworld wrote.
“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.”
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. He tells Will Connors in the Wall Street Journal.
"It's going to be continuity, but it's not going to be a standstill."
"Heins believes RIM’s next-generation operating system will attract critical mass among developers and wow consumers and business users alike.”
And, if he’s right, it might consider leasing the software to other companies “on a case by case basis.”
Under RIM BlackBerry co-CEOs Jim Balsillie and Mike Lazaridis, RIM's (RIMM:NASDAQ) stock has taken a beating. RIMM shares ended at 15.56 on January 23, 2012--down 1.44 or 8.47. On February 18, 2012, RIMM stock traded at 69.862. RIMM shares peaked at 144.56 back on June 20, 2008. The latter is a drop of 129 points or 89.24%.
COMMENTARY: Of the big three smartphone manufacturer's Research in Motion was late in introducing a touchscreen phone, the Torch 9800, in August 3, 2010. However, by the time the Torch was introduced, Apple iPhone had fully exploited its first-mover advantage, Google was growing like crazy, and both were stealing huge chunks of market share from BlackBerry. The delay really cost RIM, because they failed to respond with a touchscreen of their own.
In June 3, 2011, comScore reported that the Apple iPhone had officially overtaken RIM's BlackBerry as the No 2 mobile phone in the U.S. In July 5, 2011, comScore reported mobile phone market shares for the month ending May 2011, and this showed that RIM BlackBerry had lost even more market share.
Research in Motion was also very late to the tablet market, introducing the BlackBerry PlayBook tablet in September 27, 2010, but the new tablet was not available for sale until late December 2010, missing most of the Christmas shopping season. The PlayBook was a decent tablet. I tested it myself. It supported Adobe Flash, had multi-tasking features, a higher screen resolution than the iPad, but it was heaver and its battery life was inferior to the iPad, and most importantly lacked sufficient apps to draw buyers. RIM claimed it has sold over 500,000 PlayBook's, but this is a far cry from the nearly 22 million iPad's that Apple has sold through the end of June 2011.
Heins cannot afford to lose further market share to the iPhone or Android phones. RIM BlackBerry built its reputation as being the "business" cell phone. The phones were reliable, but the lines between the consumer and enterprise cellular markets have become blurred, and corporate America wants slick designs in their phones, and has quickly switched to the iPhone and Android phones because of the variety of different innovative and modern designs, and have left RIM BlackBerry in the rear view mirror. If I were BlackBerry I would strongly consider introducing a line of Android phones themselves. This will keep some customers from switching to other brands, and allow them to tap into the over 300,000 in apps available for Android phones.
Courtesy of an article dated January 23, 2012 appearing in MediaPost Publications Marketing Daily Blog