RIM CEO Thorsten Heins announced a plan for a quick turnaround. While no one's talking about RIM recapturing BlackBerry's heyday, there's hope for a modest uptick.
During the companys recent
quarterly report, Research In Motion CEO Thorsten Heins had the unenviable task
of assuring analysts and shareholders that, though he's been on the job only 10
weeks, he well understands what's necessary to, if not bolster the company, at
least stanch the bleeding.
RIM executives shared during
the company's fiscal fourth-quarter earnings call March 29 that BlackBerry smartphone
sales fell by 21 percent between its third and fourth quarters. During the same
period, revenue fell 19 percent.
Heins and his teamwhich no
longer includes co-CEO-turned-board-member Jim Balsillie or longtime CTO David
Yachhave a plan, though Heins
admitted it was "not without risks and challenges
, and there is no
guarantee of success."
The plan includes bringing
the BlackBerry 10 platform to market, "refocusing resources on RIM's key
opportunities"which is to say, scaling back consumer marketing and again
aggressively focusing on enterprise customersand implementing programs for
greater employee accountability and efficiency.
"In parallel, we are
undertaking a comprehensive review of strategic opportunities, including
partnerships and joint ventures, licensing and other ways to leverage RIM's
assets and maximize value for our stakeholders," Heins said in a statement.
Were his assurances enough
to convince an industry that has watched RIM's fortunes slip while Apple's
glide ever upward?
Equity firm Canaccord
Genuity wrote in a March 29 note that it was lowering its
already-below-consensus estimates for RIM.
"While RIM management
remains bullish on long-term prospects for BlackBerry 10 smartphones, we
maintain our more cautious outlook," wrote its analysts. "We believe
[BlackBerry 10] smartphones will launch into an even more competitive
smartphone market, as we anticipate continued innovative, new Android LTE [Long-Term
Evolution] smartphones, an increase in Windows smartphone offerings from Nokia
and other OEMs, and a refreshed LTE iPhone 5. As such, we have modest BB 10
Jack Gold, principal analyst
with J. Gold Associates, was a little more positive. "They still have a
loyal, if shrinking, following in the enterprise, and especially in other parts
of the world. But
, having said that,
they need to start executing, including getting BlackBerry 10 out to market
post-haste. If it slips past the fall of this year, it will get even uglier for
RIM," Gold told eWEEK
Gold added that Heins seems
to understand the urgency of the situation and to be making moves that
Balsillie and former co-CEO Mike Lazaridis didn't.
"He also seems to be
open to exploring all kinds of business models, which is good," said Gold.
Also good, he added, is that RIM sold 500,000 PlayBook tablets during the
quarter. While not iPad figures, it suggests some early acceptance of
BlackBerry 10, which he says has the same core DNA. Plus, "that's a lot of
devices they could potentially leverage."
Roger Kay, principal analyst
with Endpoint Technologies, offered a less sunny view. "The features [BlackBerry]
has been valued forencryption, push email and good messaginghave been matched
by Apple and Google. And the others have aced the consumer segment. Paring back
the company to service its core of business users makes sense," Kay told eWEEK
However, that doesn't solve
RIM's sales problem.
"Since RIM isn't a
telephone company, it can't just bill its subscribers. It has to continue to
sell them something. Server license revenue and client hardware sales are its
bread and butter," said Kay.
"Perhaps RIM could make
a business out of keeping its existing adherents happy, but that's a much
smaller-scale business. Perhaps the company should be open to changing its
mix of hardware, software and services to adjust to focusing on the needs of
its core customers," Kay continued. "Once it's pared down to size,
the company can operate independently or as part of a larger organization. It
Darkest of all was financial
services firm Jefferies, which told investors in a March 30 research note,
"We expect trends to get worse from here and think the August [quarter]
will be dire."
Its analysts added that they
see risk to Wall Street estimates and maintain their $12 target and "underperform"