RIM CEO Pledges Enterprise Focus, But Clock Ticks - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Mobile // Mobile Devices
07:41 AM
Eric Zeman
Eric Zeman

RIM CEO Pledges Enterprise Focus, But Clock Ticks

RIM CEO Thorsten Heins inherited a disaster when he took over in January. His recovery plan, outlined Thursday, just might be what RIM needs, but game time runs perilously short.

Research In Motion's fiscal 2012 fourth quarter report shows a company in tatters, a company that is a shadow of what it was just a few years ago, a company desperately in need of salvation. The company saw BlackBerry smartphone sales drop 21% to 11.1 million units and revenue plunge 19% to $4.2 billion. It recorded a loss of $125 million for the quarter, partly due to write-downs of unsold BlackBerry 7 inventory. It still has $2.1 billion in the bank, but RIM projects steep declines in BlackBerry sales for the next two quarters as it prepares to launch BlackBerry 10.

Thorsten Heins read the quarterly report Thursday as if it were a list of the deceased, calling out each bullet point in monotonous fashion. Once analysts were allowed to ask him questions, they beat him over the head quite brutally about RIM's viability moving forward. I was impressed with his answers and his vision for turning things around. For RIM's sake, let's hope its investors believe in Heins, too.

The most important thing Heins revealed is that substantial change is on the way. After spending 10 weeks at the helm, he says he now knows what to do. His plan is fairly simple, but not without risk.

First, RIM is going to focus on winning back the enterprise. Heins said that the company will return to its roots as the go-to smartphone product and service provider for businesses. How will it do this? It will focus on its Mobile Fusion product (device management tools that also control Android smartphones and the iPhone).

The company will abandon the idea of creating one line of devices that spans all use cases. Instead, it will have enterprise handhelds, and smartphones that are more appealing to consumers.

Heins will trim some fat from the executive ranks, it would appear. During the call, Jim Balsillie announced his resignation from RIM's Board of Directors, divorcing himself fully from the company. He called his departure "retirement." Additionally, David Yach will be retiring from his role as CTO Software, and Jim Rowan, COO of Global Operations, has decided to leave RIM to pursue other interests. Heins is actively seeking a new Chief Marketing Officer, and it would appear that he has his eye trained on slashing the company's overly-complicated managerial structure. Heins said he wants to flatten decision-making processes, and give managers more control over--and accountability for--their projects. (This sounds a lot like what Nokia has been going through over the course of the past year.)

Heins said RIM is exploring every possible avenue for turning the business around. That includes potentially licensing out its BlackBerry 10 platform, divesting portions of the business, and possibly selling off some of its patents. Heins wasn't clear about whether RIM would put itself up for sale. At one point during the call, he said that a sale of the company would be the absolute last resort, though later he hinted that the idea had certainly crossed the board's collective mind.

BlackBerry 10

The lynchpin on which all these schemes depend is the success of BlackBerry 10. Heins said that that new platform software is on track for launch before the end of the year, and the prototype devices and software he's seen (and shown to carrier partners) looks encouraging. BlackBerry 10 is the company's next-generation platform that is based in part on portions of BlackBerry 7, PlayBook OS, and the base QNX code. RIM will merge these into a master OS.

There's only one, big problem: time.

RIM's BB10 smartphones won't reach the market until close to the end of 2012. By then, Apple will have fielded the iPhone 5 and Google will have at least unveiled (if not actually released) the next version of Android. Apple and Google are the reason RIM is in its current state. Their touch-screen, media-centric smartphones have won over consumers and business users alike, who've adopted them by the hundreds of millions. The speed at which Apple and Google are innovating and iterating has completely outpaced the rest of the industry--and especially RIM.

Heins said that the company plans to help its carrier partners subsidize the bejesus out of its low-end Curve smartphones for the rest of the year and sell through the stock of BlackBerry 7 devices on which it is currently sitting. RIM believes (nee, hopes) that it can sustain itself long enough on sales of these BlackBerry 7 handsets to get BB10 to market.

Where will it sell these devices? Not in the U.S., where consumers are clearly not interested in BlackBerries. Instead, RIM is going to target emerging markets, where these lower-cost phones will have more appeal to cost-sensitive buyers.

BlackBerry 10, however, needs to be nothing short of spectacular, which places even more pressure on RIM. If BB10 smartphones aren't a raging success around the world, RIM will probably never recover.

While it is good to see that Heins has made a sober appraisal of the situation facing RIM--something former CEOs Lazaridis and Balsillie never seemed to be able to do--the company is swimming against the current with one hand tied behind its back.

It's do or die time, for RIM.

See the future of business technology at Interop Las Vegas, May 6-10. It's the best place to learn how cloud computing, mobile, video, virtualization, and other key technologies work together to drive business. Register today with priority code CPQCNL07 to get a free Expo Pass or to save 25% on Flex and Conference passes..

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
Eat Poi
Eat Poi,
User Rank: Apprentice
3/30/2012 | 6:46:49 PM
re: RIM CEO Pledges Enterprise Focus, But Clock Ticks
BB is at a cross-roads; no wait, they were at a cross-roads: they just hadn't decided on a decision. I think they are afraid of the "Die" part of Do or Die; acceptable risk/s are an entrepreneur's motto, but with a lot at stake, it's tough. Should the motto of the consumers/customer's be "Hang In There"? BB 10 should have been released when PlayBook OS 2 was released, and bundled with it. Is anyone at BB looking at timelines and releases of competing companies? Instead of "Release the Hounds", BB should "Release the OS/App, and Improve along the way." Get it Out, BB.
User Rank: Apprentice
3/30/2012 | 3:51:33 PM
re: RIM CEO Pledges Enterprise Focus, But Clock Ticks
They got themselves in this situation by losing sight of who they are. Kids mixing music on a Torch? Really? People like the iPhone and Android because they are great toys. Everybody loves cool toys, but we also need tools. The latest bold is a great tool, but at least my employer has deactivated JavaScript and Apps. Interesting to consider what this would mean to other devices, but I have to think HTML5 will reverse this eventually...

As a consumer, if I want something for the kids to play angry birds on, its an iSomething or Android (an iDroid?) Users are not generally using BB as a toy, and BB should find a way to market the fact that people with 'toy' phones are playing with them and not doing work; 'cause its true... they are tweeting, posting, flinging small avian projectiles, doodling collaboratively, and generally dicking off on their boss's dime.

iDroid are collaboratively poorly positioned to overtake corporate accounts, because Google is a giant espionage company that trades in consolidated, analyzed secrets and Apple is closed and pricey. Anyone who lets Android in is blind to security, and anyone who lets Apple in is not using resources wisely...

The door seems open, but the Win 8 phones and devices are about to arrive... iDroid may take a hit, but I really see BB taking it in the shorts. Finally a toy with business presence and integration across all platforms. BB has had years to realize they were not a consumer product, but they failed. Integrated office solutions that get work done. It was their only chance, but Microsoft is breathing down their neck. Heins finally gets it. I am sure he will do great in his next job. (joking. there is a chance...)
Can Cloud Revolutionize Business and Software Architecture?
Joao-Pierre S. Ruth, Senior Writer,  1/15/2021
10 IT Trends to Watch for in 2021
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/22/2020
How CDOs Can Build Insight-Driven Organizations
Jessica Davis, Senior Editor, Enterprise Apps,  1/15/2021
White Papers
Register for InformationWeek Newsletters
Current Issue
2021 Top Enterprise IT Trends
We've identified the key trends that are poised to impact the IT landscape in 2021. Find out why they're important and how they will affect you.
Flash Poll