"I'm here to ensure that RIM remains one of the top three wireless leaders in this industry."
So said Thorsten Heins, brand-new chief executive of Research in Motion
The old guard departs
Mike Lazaridis and Jim Balsillie had been RIM's joint chairmen and chief executives. Lazaridis will stay with the company and take the role of vice-chairman and head of a new board committee on innovation. Balsillie is leaving the company, but will remain a director.
This regime change was a long time coming and half-expected, but still offered shock value, as both men had been with the company for ages. Lazaridis, an engineer, actually founded RIM in the late 1980s. Balsillie, a marketing expert, joined in 1992. Both men are significant shareholders and said on Sunday that they would remain so.
The new guard arrives
New CEO Thorsten Heins was previously RIM's chief operating officer for product and sales. The new chairman will be Barbara Stymiest, former head of the Toronto stock exchange and a senior executive at Royal Bank of Canada. The company also said it was seeking a new chief marketing officer. Prem Watsa, a prominent Canadian investor, also joined the board.
Priorities for Heins include the upcoming launch of a new version of RIM's Playbook tablet next month, and the roll-out later this year of an updated Blackberry operating system, BlackBerry 10. He also cited the recent launch of the BlackBerry 7.1 device as evidence that RIM is responding to the challenges it faces.
"I want to maintain the focus on enterprise," Heins told Financial Times, "but we need to communicate a bit more with our consumers. We need to do more marketing."
RIM needs to do more than just marketing
It's no secret the company is in trouble, and Heins' comments seem understated at best. In a Nielsen poll that surveyed Americans who bought smartphones over the last three months, RIM polled only 4.5% of market share. To be fair, focusing on enterprise is reasonable, at least initially, because that plays to the company's one remaining strength, i.e., the Blackberry system is highly secure, much more so than other smartphones, so has always been a favorite of government and business.
Also in that poll, however, were numbers for RIM's competitors, and they're daunting. Apple
And what about when Apple and Google decide to go hard after enterprise, and design their software and handsets to be as secure as RIM's? RIM can't stay in business on enterprise alone.
Talk of a buyout, plus even more competition for RIM
Nokia and Microsoft have the financial firepower and the determination to potentially make themselves the market's third player. So where does that leave Heins and his statement to remain one of the top three leaders in the wireless industry, then?
Playing hard to get?
Maybe Heins was expected to be optimistic upon taking the reins of CEO. Maybe that kind of tack will make RIM seem more desirable to potential suitors. Or maybe he really believes it. We'll have to wait and see.
The stock is currently trading for $15.77 per share with a depressing P/E of 3.76. Revenue is down, as are earnings, and the company has only $1.3 billion in the bank. RIM shares have lost more than three-quarters of their value in less than two years, and the stock price is likely only as high as it is now because of buyout rumors.
This Fool thinks that, as a continuing separate company, RIM is finished. Even if it has a security advantage over its competitors now, how long before that evaporates? And with so few resources at its disposal, how long can it continue limping along on its own, trying to make headway against Apple and Google? Not very.
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Fool contributor John Grgurich worked in the cell-phone industry when the latest and greatest handheld phone was still lovingly referred to as "the brick," but he owns no shares of any of the companies mentioned in this column. The Motley Fool, however, owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services have recommended buying shares of Google, Apple, and Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a scintillating disclosure policy.