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After a series of management mistakes that cost Research In Motion (NASDAQ: RIMM) its lead in the global smartphone business, and over 80% of its market value, the firm’s long-time co-CEOs were pushed out in favor of firm’s COO. It may not save the company from a takeover or further downward spiral, but new management is the only slim chance that RIM has.
Thorsten Heins was made president and chief executive and joined the board. Mike Lazaridis, former co-chair and co-CEO, has become vice chair of RIM’s board. His peer, Jim Balsillie, remains a member of the board.
Research in Motion held the clear lead in the global smartphone business from the time it launched the BlackBerry in 1999 until three years ago. Then Apple’s (NASDAQ: AAPL) iPhone and an army of Google (NASDAQ: GOOG) Android-based smartphones began to gain share. RIM had 20% of the world’s smartphone sales two years ago, by some estimates. That number has fallen by at least half.
In the last year, RIM’s earnings prospects have fallen consistently. It entered the competitive table PC market a year ago with its PlayBook tablet, but sales were so poor the company took at $485 million third quarter write-off.
RIM’s problem now is that the appointment of one person is too little, and much too late. Apple has too large a lead, and firms that include Samsung and HTC are also remarkable successes. RIM has no set of new features or services to launch to get it back business in a sector in which product advances come in months and not years.
Douglas A. McIntyre
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