RIM CMO Loss Could Be Good on Eve of PlayBook Launch: Analysts
BlackBerry maker Research In Motion is losing its chief marketing officer just weeks before launching its PlayBook tablet, a device officials hope will compete with Apple's iPad and provide a turning point for the company.
However, despite the timing so near to the PlayBook release, losing CMO Keith Pardy could be a positive development for RIM, according to analysts.
"I don't think it's any secret that Apple in particular has been outmarketing RIM for some time. And with the PlayBook coming out shortly, they are going to have to kick up marketing into high gear," Jack Gold, principal analyst at J. Gold Associates, told eWEEK.
The PlayBook runs an operating system based on QNX technology, to which all of RIM's devices will eventually transition. Moreover, with the PlayBook, RIM is hoping to reinvigorate its image as a relevant, cutting-edge technology company. While its BlackBerry smartphones were considered the enterprise gold standard in the United States and roundly praised for their real-time e-mail capabilities, some of the company's luster has recently been lost to the Apple iPhone and high-end Android smartphones. Pardy, who has worked in marketing for Nokia and Coca-Cola, was hired in December 2009 to help RIM shed a bit of its corporate image for something cooler.
The Wall Street Journal reported March 5 that Pardy is leaving for "personal reasons" and will help guide the company over a six-month transition period.
According to Gold, it's not unusual for companies to change marketing leadership during transitions-and with the PlayBook imminent in late March or early April, RIM is certainly in transition-and that the loss of Pardy isn't necessarily a negative for RIM.
"It could turn out to be [a negative] if they don't replace the marketing exec with someone who can provide needed direction and build momentum," he said. "That said, I suspect they already have someone in mind if this fellow is leaving."
Analysts with investment banking group Jefferies & Co. similarly believe that the change could be good for RIM.
"Keith Pardy informed [RIM] of his departure a month ago and will stay on for six months to transition. We believe that this likely means he was not poached by a competitor. We think it is possible that Pardy and the management team came to a mutual agreement to move in a different direction," the Jeffries analysts said in a March 7 research note.
Despite the need for change, RIM's sales aren't exactly suffering. While Android devices replaced BlackBerry smartphones as Verizon Wireless' top-selling devices, ITG Investment Research reported Dec. 13, 2010, days later, RIM went on to announce record BlackBerry sales during its fiscal third quarter and 5.1 million new BlackBerry subscriber accounts-successes increasingly driven by interest abroad. Highlighting this, in January, Nielsen reported that Google's Android OS claimed 29 percent of U.S. smartphone market share, putting it ahead of both Apple's iOS and RIM's BlackBerry platform.
"Due to [RIM's] market share losses in the U.S., a new marketing approach could be beneficial," stated the Jefferies note. "Especially in front of QNX, new handsets, new tablets, new apps, new ecosystem [equals the need for a] new message. Making a switch now makes sense."
The bottom line, says Gold, is that RIM can choose to use Pardy's departure as an opportunity.
"This gives RIM a chance to revitalize its marketing, something it has not always been great at in the past," he told eWEEK. "As the market heats up and competition is all around them now, RIM needs a fresh approach. This gives it that ability."