RIM announced on Sunday that its longtime co-CEOs are stepping down. It decided to make the announcement during the Giants-49ers game, which I’m sure they knew would dominate Twitter and the news media.
While the move was absolutely necessary if the company was to turn things around, its announcement gives me absolutely no confidence that its new CEO, former co-COO Thorsten Heins, can right the ship.
Here are a few quotes from the company’s press release that give me pause. All of the quotes are from Heins:
“Mike and Jim took a bold step 18 months ago when RIM purchased QNX to shepherd the transformation of the BlackBerry platform for the next decade. We are more confident than ever that was the right path. It is Mike and Jim’s continued unwillingness to sacrifice long-term value for short-term gain which has made RIM the great company that it is today.”
I can buy that buying QNX was a bold move, but RIM has failed to integrate QNX into its phones in any compelling way. Also, I’m calling bullshit on his statement that RIM’s freefall in the markets is simply because its former co-CEOs were “unwilling to sacrifice long-term value for short-term gain.” Under their leadership, the company has dropped from $50+ per share to less than $20 in the span of a year.
“We have a strong balance sheet with approximately $1.5 billion in cash at the end of the last quarter and negligible debt. We reported revenue of $5.2 billion in our last quarter, up 24% from the prior quarter, and a 35% year-to-year increase in the BlackBerry subscriber base, which is now over 75 million.”
RIM neglects to mention that revenue dropped by 5% from the previous year, where it earned $5.5 billion in Oct-Dec 2010. Profits dropped 71% due to poor sales of the BlackBerry Playbook.
“BlackBerry 7 has been well received. We are very excited about PlayBook 2.0 and BlackBerry 10. The reception of our products at this year’s Consumer Electronics Show was encouraging.”
“RIM earned its reputation by focusing relentlessly on the customer and delivering unique mobile communications solutions. We intend to build on this heritage to expand BlackBerry’s leadership position.”
What leadership position? Apple and Google took that away from RIM years ago.
“As with any company that has grown as fast as we have, there have been inevitable growing pains. We have learned from those challenges and, I believe, we have and will become a stronger company as a result.”
Hopefully they have learned some tough lessons, but I’m still not convinced.
“Going forward, we will continue to focus both on short-term and long-term growth, strategic planning, a customer- and market-based product approach, and flawless execution. We are in the process of recruiting a new Chief Marketing Officer to work closely with our product and sales teams to deliver the most compelling products and services.”
Getting a new CMO is fine, but there isn’t a CMO on the planet that can successfully market a vastly inferior product in a market as competitive as smartphones.
Look, I know I’m being really, really hard on RIM, but they deserve it. They got their ass kicked by Apple and Google and they’ve been doing a terrible job of playing catch-up ever since. It failed to invest in apps, and as a result it just doesn’t have the developer ecosystem it needs to survive in today’s market.
There will be no Rocky-esque comeback for RIM. Instead, after a few more years of struggling and failing to regain relevance, the once-great technology giant will likely find itself in the hands of an acquirer like Amazon.
Image courtesy of IntoMobile