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CEO Gaffe of the Week: BlackBerry

Last year, I introduced a weekly series called "CEO Gaffe of the Week." Having come across more than a handful of questionable executive decisions when compiling my list of the worst CEOs of 2011, I thought it could be a learning experience for all of us if I pointed out apparent gaffes as they occur. Trusting your investments begins with trusting the leadership at the top -- and with leaders like these on your side, sometimes you don't need enemies!

This week, I'll be highlighting a company all too familiar with this dubious honor, BlackBerry (NASDAQ: BBRY  )  and its CEO, Thorsten Heins.

The dunce cap
It appears that we've switched CEOs, from the joint leadership of Jim Balsillie and Mike Lazaridis to Thorsten Heins, and changed the name of the company, yet we've still wound up in the exact same predicament anyway.

Despite a rapidly shrinking base of BlackBerry users, those few BB faithful still left, and those tired of the Apple (NASDAQ: AAPL  ) iPhone's iOS and Google's (NASDAQ: GOOGL  )  Android, are eager for something new.  According to comScore, which released its U.S. fourth-quarter market share data this week, Google's Android OS accounted for 53.4% of all U.S. market share with Apple's iOS grabbing 36.3%. The remaining 10% is split among BlackBerry, which clocked in at just 6.4% of U.S. smartphone market share, Microsoft, whose share shrank to just 2.9%, and Nokia, whose long-abandoned Symbian OS clocked in at a meager 0.6%. 

Things were expected to change with the unveiling of the BlackBerry Q10 and Z10 designs last week. It was a chance for BlackBerry CEO Thorsten Heins to show the world what his company had been working on for the past two years. Over that time span, BlackBerry had encountered multiple delays, so you can imagine that users were excited for the latest and greatest of what the company had to offer.

The two devices, the Q10 and the Z10, differ in that the Z10 is a touchscreen-only device while the Q10 utilizes the company's recognizable keyboard. Strike one came when Heins noted that the Z10 wasn't going to be released in the U.S. until mid-March despite strong purported sales in select markets of the U.K. and Canada. Heins placed the delay on the domestic carriers and their strict testing requirements but it does little to satiate a crowd that's waited two years for a new device.

To the corner, Mr. Heins
Well, at least the BB faithful that are eagerly awaiting their active keyboard Q10 are going to get their phones at the same time, right? Buzzzzzzz. Incorrect, please try again!

Would you really be shocked by now if I noted that there was yet another delay in the works because of "domestic carrier testing" on the Q10 keyboard? "How long?" you ask? How about another eight to 10 weeks after the Z10 release (Heins' "best guess"). This means it could be another four months and change before BlackBerry even begins rolling out its full line of products in the U.S. By then, Apple will be readying for what's become the yearly launch of a new iPhone product in the late summer/early fall, and Samsung will almost certainly be gearing up to release another version of its Android-based Galaxy series around the same time. Perhaps the only competitive chance BlackBerry had of regaining market share was in launching as far away from an Apple or Samsung launch as possible -- and it even screwed that up!

"Fool me once, shame on you; fool me twice, shame on me," goes the saying. Does anyone know what wisdom can be learned by BlackBerry trying to fool the Street around a half dozen times with its BB10 timeline? Feel free to post your answer in the comment section below!

Do you have a CEO you'd like to nominate for this dubious honor? Shoot me an email and a one- or two-sentence description of why your choice deserves next week's nomination, and you just may see your suggestion in the spotlight.

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Read/Post Comments (25) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 08, 2013, at 8:02 PM, winterhat wrote:

    Lol. Who believes this? The phone and OS are incredible, they are flying off the shelves in UK and Canada. And BB Enterprise with true BYOD functionality? The OS is truly stunning and it's built from the ground up for security, communication, actual multitasking, separation of work/play and more. Baked into the OS, not as an afterthought. BB underestimated the demand for fart apps and iOS and Android underestimated BB. They are behind now, believe me, they know it. But, the problem is, they will be throwing patch code onto OS's that were designed for games/apps. Mind you, all this uproar is about...a Blackberry...WITHOUT A KEYBOARD! Wait until the Q10 drops. (Tip: If you're short BBRY, don't wait)

  • Report this Comment On February 08, 2013, at 9:58 PM, H3D wrote:

    One more nail in the coffin


  • Report this Comment On February 08, 2013, at 11:29 PM, mirra88888 wrote:

    I would like to nominate the author for the worst analyst . And you are right I listen to Motleys Fool shame on them, If I listen again shame on me.

  • Report this Comment On February 09, 2013, at 12:06 AM, Ipadhata4life wrote:

    I can't believe you arrogant people still write these articles, and the fact that the delay is due to "the carriers" means your a short a few beans of a bean casserole. However, you're a complete fruit... Who would have thought?

  • Report this Comment On February 09, 2013, at 9:17 AM, EddieLomax wrote:

    The fact that Thorstein blames the carriers for the slow roll out is a bad joke.

    The carriers had their "strict requirements" set up long before Blackberry started developing BB10, so the blame for missing them is all down to Blackberry themselves.

    I can understand though that engineering/development takes as long as it takes, its clear that they were struggling to get things ready for the January date and could not get samples out to the carriers in advance.

    As for their eventual success, they will sell to the faithful and people who love the BB brand. But without a technical edge I'm yet to see a convincing argument why people should pay for their device over a rivals.

    Its definitely going to be tough going the next few months with the GS4 and iphone 6 on their way, not a fan of either but I respect their sheer marketting power. And for that time BB10 will be absent in key markets, its not sounding a great year to me either.

  • Report this Comment On February 09, 2013, at 10:10 AM, rapag wrote:

    Judging without any knowledge of the case in point seems simply stupid to me. One more attempt to bring the stock down, allowing desperate short-sellers to close positions without pain.

    However, everything you say here is already priced in. Market-cap is below book value if this debt-free company with a brand-new product. So there is not much reason to believe it will fall further in the coming weeks/months. On the contrary, if BlackBerry is getting for example only 10 percent market-share in the US again, the stock will rise sharply.

    This may happen simply because

    - a lot of people don't want to buy an iPhone seemingly just everybody already owns, because it is getting boring and it does not allow multi-tasking

    - android is to simple/ allows no mult-tasking and to me seems to be a google-tool to collect even more data from users to exploit it for advertising purposes (anybody thinking about why they offer it free of charge?),

    - people don't want microsoft on their phones, as they already have the pc-monopoly,

    - carriers want competition between phone-manufacturers/OS-developers and will theirfore support BBRY,

    - BBRY's BB 10/qnx-operating system is great, in particular the virtual keyboard is obviously the best in the market, browser the fastest, and security/separation between company/private data is just another stand-alone feature of BBRY's phones.

    - T-mobile US could as it seems launch the Z10 earlier than currently expected, stating that the phone is very stable.

    So let's what exactly will trigger the coming short-squeeze.

  • Report this Comment On February 09, 2013, at 1:26 PM, TimmyBee123 wrote:

    "..The carriers had their "strict requirements" set up long before Blackberry started developing BB10, so the blame for missing them is all down to Blackberry themselves..."

    Missing what? BlackBerry gave them the phones when they were ready for testing. If it takes them longer to get them to market, so be it.

    They are on sale in the UK and Canada.

    If they get to market in March, that is still the first quarter of 2013.

  • Report this Comment On February 09, 2013, at 1:27 PM, TimmyBee123 wrote:

    "..I can understand though that engineering/development takes as long as it takes, its clear that they were struggling to get things ready for the January date and could not get samples out to the carriers in advance...."

    The carriers have had them since October.

  • Report this Comment On February 09, 2013, at 4:26 PM, brianasmith24 wrote:

    The U.S. carriers are on the hook for billions of dollars of iphones....they were in no hurry to test the Blackberry phones. They received the phones to test at the same time as the UK and Canadian carriers. I switched from an iphone 3gs to the Z10 and love the Z10. The iphone 5 is great as well but what I most look forward from Blackberry are the other devices coming out this year and later....the charging dock / media center to have your phone work with your TV, the docking station for work to plug the Z10/Q10 into and use a monitor/keyboard/cloud file storage and of course the QNX in vehicles coming down the pipe...real mobile computing vs. mobile phone...oh an of course BB10 for my playbook and the new tablet coming out too.

  • Report this Comment On February 09, 2013, at 4:26 PM, voytekp wrote:

    Why do you guys waist your time with these fools....

    They have never written anything good and nothing you say will change that. Trust me, nothing!

    Long BBRY since $7/share

  • Report this Comment On February 09, 2013, at 4:35 PM, myeerah wrote:

    Honest question.Do these authors get paid to write this stuff? If so I could make a little extra money and start myself.I have sometime to write while stuck in traffic and wouldn't mind a little extra income.I do believe some iPhone users may switch.I have a co-worker that smashed his iPhone and paid the $200 for insurance but when he went in to get a new one the store rep wanted another $150.00.He told the rep that was not how the insurance policy was sold to him and they just said oh well! He's waiting until march for the z10.

  • Report this Comment On February 09, 2013, at 5:13 PM, kzachmann wrote:

    I found the specious move to change the name and thereby blocking the free exchange of ideas on public posting boards to be a little too limiting. The move also prevented any further shorting of the stock (except for buying puts). I can see why the management team would want to do just that given the delays they new were in the works but did not pre-announce this before the "reveal" for the BB10 magic. As an investor I enjoyed following all of the emotion of the longs and shorts. The RIMM game looked like the fix was in and the price was manipulated almost daily. For this reason I could not get a good feeling about the management and absent trust in management there is little motivation to buy. I believe the author of this article is presenting truth. I don't know if he has a personal motive behind the facts he presented but the readers are free to weigh the importance of these delays given the hype the management served us prior to the launch. At some junction you have to ask if the management is credible. I think the next week or so will be instructive.

  • Report this Comment On February 09, 2013, at 5:36 PM, TimKnows wrote:

    Really stupid article.

  • Report this Comment On February 09, 2013, at 6:18 PM, weelpony wrote:

    what a F/$%?& as$%?&U this guy.

    don`t forget to go cry to mama too.

    When it`s not american it`s no good. Can`t understand these people are allowed to write.

    Poor americans, just good for bashing.

    Get a life.

    Long live BB.

  • Report this Comment On February 09, 2013, at 6:37 PM, smartinfo wrote:

    If you shorted BBRY you need to read this and the comments related to it ASAP

  • Report this Comment On February 09, 2013, at 7:08 PM, moorken wrote:

    I got to play with the new Z10 last week, and om pretty Sure it Will be a hit.... Sales numbers in europe are good, They sold out in the UK within the first week, so my expectations are optimistic!

  • Report this Comment On February 09, 2013, at 8:01 PM, weelpony wrote:


    The site says it all ''FOOL ''

    Its runed by a bunch of F...

  • Report this Comment On February 09, 2013, at 10:21 PM, crowbait51 wrote:

    This is just more "uninformed" opinion from a MF fringe analyst. Last I saw, BB10 is flying off the shelves in Canada & UK and selling for a premium in the US on eBay. Tom and David, once again as a long term subscriber and fan, please exercise some good old fashioned quality control at MF. This kind of analysis makes the Fool the laughing stock it is intended not to be.

  • Report this Comment On February 10, 2013, at 12:33 AM, rim2013 wrote:

    This is such a negative article meant to mislead the investors.

    My friend paid these fools for advices for a year and lost money only. Please take a break and give BBRY a fair chance to do well. When you lie like this, only bad things can happen to you only. BBRY is here to grow because of QNX whoever might be the CEO.

  • Report this Comment On February 10, 2013, at 1:05 AM, TMFUltraLong wrote:

    I have no problem with anyone's opinions expressed here, but can anyone name a next-gen phone that's had more delays than the Q10/Z10? It's been one delay after another, and even the phones unveiling by Heins came with further delays. It's absolutely worthy of Gaffe of the Week.


  • Report this Comment On February 10, 2013, at 2:28 AM, MPF94025 wrote:

    I'm puzzled by panic surrounding a March release date for the Z10. I own a BB Torch and iPhone 5, agree with others who wish to avoid the Android "Borg" collective of sucking up users' data into the greater stratosphere and selling it.

    In all seriousness, I've not seen a new feature on these iPhones or Android devices that make me want to run out and purchase one. i purchased the iPhone 5 primarily as my wife wanted an iPhone and my 4gs was just fine for her: in truth, it was just fine for me as well. Yes, the new phones are faster, yes the screen resolution is better, yes the cameras are nicer, but at the core, the apps are what make them special. The technical advances are incremental improvements, not revolutionary changes. I've not seen new mind boggling apps enabled by the new technologies.

    I'm not a gamer, so perhaps that is my limitation. And the market is increasingly consumer oriented, which is a real threat for a company trying to make a go of it with corporate sales of smartphones. Without having a Z10 in my hands (as is the case for many of the wunderkinds writing these reviews) it is hard to pass judgement on where it will fit in. But there is certainly nothing from Apple or Android world that has been more than ho-hum improvements in the last 6 to 9 months. We'll see what's around the corner before declaring BB dead.

  • Report this Comment On February 10, 2013, at 11:41 AM, Chippy55 wrote:

    Wow, sounds like the writer is another Apple fanatic who got in at $650 after seeing that jerky guy's target of $1,111 for Apple. Duh, why didn't he make the target $1,111.11, that makes as much sense as his jerky projection. Except now that Apple has tumbled, he's scaled back his jerky target to $888, but won't go as far as to add 88 cents to his jerky projection. note: If Apple goes to $888 I'll eat my hat, it's made out of cheese anyhoo. Back to BBRY. i heard all the talking heads including Varney put Rimm on "death watch" for almost a year. And all the heads on CNBC have Apple comments every 5 minutes. I'm sick of hearing about Apple, if they are so great why haven't they raised their div from $10,60? now they have to contend with an unhappy stockholder who's suing, duh, i guess he bought in at $650 too and is angry that it didn't go to $1,111.

    These writers who constantly talk of Blackberry's share vs Apple or Samsung NEGLECT TO MENTION THAT Blackberry has 79 million users worldwide. They are only concerned with Apple's share in the U.S., as if the rest of the globe doesn't exist. We shall see you nattering nabobs of negativity aka egg suckers.

  • Report this Comment On February 10, 2013, at 11:41 AM, jelp2 wrote:

    Sorry,,, I just woke up after reading "another iPhone release"...almost fell asleep again writing that... Boring!!!!

  • Report this Comment On February 10, 2013, at 11:21 PM, gemsonme wrote:

    Hey fools no matter what u say, bbry z10 is an awesome phone and u know it! U r just too scared to admit it. This was yet again ,another attack on bbry from an even bigger fool!

  • Report this Comment On February 11, 2013, at 2:51 PM, einzling44 wrote:

    All of the mobile companies except GOOG have a nasty corporate governance issue. My list from ugliest to least ugly:

    1. MSFT (dumbest CEO in tech, period)

    2. BBRY (prolonged denial hurt the company)

    3. AAPL (inefficient use of cash, apple maps failure)

    4. NOK (to gift your jewels to MSFT is a novel strategy that seeems odd)

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