RIM shares plunged 9.1 per cent on Monday after the company announced that its chief operating officer, Thorsten Heins, will take over from co-CEOs Jim Balsillie and Mike Lazaridis, who remain as directors.
Heins said he's certain of RIM's future as a key player in the smartphone market, despite analyst concerns that BlackBerrys have fallen dangerously far behind their Apple and Android competitors.
"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)," Heins told analysts during a conference call to announce his plans for the company.
But he signalled that the Waterloo, Ont., company isn't changing its course.
"I don't think that there is a drastic change needed."
However, shares in Research In Motion dropped 9.1 per cent, or $1.57, to close at $15.67 Monday on the Toronto Stock Exchange.
Activist shareholders expressed disappointment with the changes at the top.
"The market is voting with its feet," said Vic Alboini, president of Jaguar Financial Corp. in Toronto, which has been pushing for a change in the board structure for several months.
Alboini, one of a group of like-minded shareholders who collectively own more than 10 per cent of RIM's stock, said the change in CEO doesn't go far enough. He repeated his call for a complete strategic review that would consider every option, including a sale of the company or part of it.
"Overall the news is negative, unfortunately, because they're keeping the two co-CEOs on the board," Alboini said from Toronto.
"The last thing you want to do is surround a new CEO from whom you want fresh thinking, independent initiatives ... with the history of RIM captured in the two co-founders sitting at the boardroom table."
Alboini, who has been among RIM's most vocal and influential critics, called the new CEO and board members a "transitional team," saying they will have only months to bring about needed results.
RIM's new CEO addressed analysts Monday morning after the company announced late Sunday that Heins would replace Balsillie and Lazaridis.
The move is an attempt to pull the troubled company out of a years-long slump but Heins didn't announce any major change in direction.
"This is not a seismic change," Heins said, in response to a question during the conference call.
But Heins said that one of the areas where RIM will make noticeable changes is in marketing to consumers, particularly in the United States.
"We need to be more marketing driven. We need to be more consumer oriented," he said. "This is where a lot of our growth is coming from."
Evercore Partners analyst Alkesh Shah said RIM has to come out with smartphones that create a buzz.
"They have to get people proud to own a BlackBerry in the U.S.," Shah said from New York.
"Mr. Heins may be able to do that, but his background doesn't show that he has experience doing that."
RIM now has only about 10 per cent of U.S. market share and despite being known for its high level of security and ability to push email directly into BlackBerrys, consumers have been opting for more Internet friendly smartphones with an emphasis on software applications.
RIM needs to hire a marketing chief, a position that Balsillie held, who's perceived as "creating interesting, exciting devices," Shah said, perhaps someone who would come over from Apple, Google or Samsung.
Once one of Canada's most valuable companies, RIM has seen its fortunes plunge over the last few years as it lost market share to competitors such as Apple's iPhone and iPad and devices using Google's Android platform.
RIM's problems have been made worse by disappointing sales of its PlayBook tablet and a global four-day service outage for its BlackBerry service. The company, particularly Balsillie, has countered that sales of its latest BlackBerry smartphones hit a record pace after their launch last year.
Nevertheless, delays in launching the original PlayBook tablet last year and its successor — plus a delay in the BlackBerry 10 until later this year — have weighed heavily on RIM's reputation.
RIM's stock was once so highly priced as to briefly elevate it to Canada's most valuable company, worth more than $70 billion. Its market capitalization stands now around $9 billion.
While Balsillie and Lazaridis have left day-to-day operations, they both still remain on RIM's board and will have influence through their large ownership stakes.
William Blair & Co. analyst Anil Doradla questioned whether Heins will be truly independent.
"Is there going to be an invisible hand?" he said. "The story that the new CEO highlighted was not very convincing."
UBS analyst Phillip Huang said it will require more than change in RIM's top executive ranks to alter the course of the company.
"While we think this is a small step in the right direction, we are surprised RIM has decided to go with an operations minded insider, especially since we consider the challenges tied more to strategy," Huang wrote in a research note.
"We don't believe these announcements will produce much change in the short medium term, and much will depend on the success of BlackBerry 10," he said, referring to a new generation of BlackBerrys expected out later this year.
Edward Jones technology analyst Bill Kreher said RIM's challenges don't end with the appoint of a new CEO because the company's strategy is largely unchanged.
"And RIM will continue to struggle in a very intense market," Kreher said from St. Louis, Mo.
Also on Monday, Ottawa-based Wi-LAN Inc. (TSX:WIN) said it launched a patent suit against RIM in a U.S. district court in Florida claiming the company is infringing on two patents it owns.