The analysts have parsed the press releases and conference calls, and something of a consensus is emerging on RIM’s management shakeup: It will probably change nothing.
Following the announcement Sunday that Research In Motion co-CEOs Jim Balsillie and Mike Lazaridis are stepping down to make way for COO Thorsten Heins to take the reins, RIM shares jumped in early trading -- and then dropped below their close Friday.
It was a sign that investors quickly lost confidence the company could change direction under its new management.
Many market observers panned Heins on Monday after a conference call Monday in which he declared, "I don't think there is some drastic change needed."
Those bold words were poorly received by investors in RIM, many of whom believe drastic change is needed. The company saw its sales plunge from $911 million in the third quarter of 2010 to $265 million in the third quarter of 2011.
“Investors should be stunned by the Heins appointment,” writes Douglas A. McIntyre at 24/7 Wall Street, reflecting a common sentiment about the company’s move. “They should be rattled by the fact that Lazaridis and Balsillie will remain on the board. They should believe that Heins has only the most modest ability to set the company on a new course and, as member of senior management for years, he was part of a group that made and carried out RIM’s flawed strategy.”
While Heins suggested one departure from RIM’s strategy, saying he is open to licensing RIM’s operating system, QNX, to other phone manufacturers, he argued the company doesn’t need to change its direction with product, but should rather put more effort into marketing.
As some pointed out Monday morning, this strategy is no different from the one Balsillie and Lazaridis put forward late last year.
“In order to drive increasing demand for BlackBerry products and services in this key market, we're planning to undertake a comprehensive advertising and promotional program in 2012,” Balsillie said in an earnings call in December.
“We understand that our marketing efforts over the past year have not achieved the desired results, impacting the company's performance. In addition to the U.S. advertising and promotional programs, we're also planning to increase advertising and promotional activities in a number of key global markets.”
Heins also said he is not interested in breaking up and selling RIM, as some vocal shareholders have suggested.
“This is an amazing company with a passionate and loyal global consumer base,” Heins said during the call.
Yet how loyal customers are to the BlackBerry brand is an open question. In data culled from a million users, gadget site Drippler determined that some three-quarters of BlackBerry users are considering moving on to a different brand.
Analyst Mark Tauschek of Info-Tech Research Group said delays in releasing new products are behind at least part of the desire to ditch the BlackBerry.
“We’re going to be waiting for BB OS 10, or QNX 10, or whatever they’re calling it these days ... until the latter half of the year,” he said. “And, of course, all the talk and speculation going on right now about others either buying them outright or licensing their intellectually property doesn’t help.”
It’s for this reason, among others, that a new advertising and marketing push doesn’t ring right with many RIM investors.
"[Heins] remains committed to the money-losing PlayBook tablet, which he sees as merely the first step in the rollout of RIM's BlackBerry 10 platform," John Fortt at CNBC reports. "He won't be embracing Android. He will continue to target both the consumer and enterprise markets. Phones with BlackBerry 10 will still arrive in late 2012. And he won't be selling off key assets like RIM's proprietary network.."
Heins’ openness to licensing RIM’s operating software may be the brightest spot on RIM’s horizon, at least in some investors’ eyes. By licensing QNX to other phone companies, RIM would be placing itself on a par with Google’s Android and Microsoft’s Windows Mobile, which are both licensed to various manufacturers.
According to unconfirmed reports, Samsung, which had recently been rumoured to be interested in buying RIM, is in talks to license QNX.
RIM'S ROUGH YEAR
