Research Immobilized: Time for a Management Shake-Up?

May 5, 2011 at 4:15 am PT

Wall Street’s already dim view of Research In Motion is growing dimmer by the day with more brokerages downgrading its stock and, increasingly, questioning management’s ability to right the company from a nasty yaw.

Seems the incremental advances RIM showed off at BlackBerry World this week did almost noting to convince the Street that the company can reverse continuing market share losses and reinvigorate its pioneering BlackBerry platform. As Needham analyst Charlie Wolf said in a note to clients Wednesday afternoon, RIM is a one-trick pony whose one trick no longer works.

“RIM has attempted to keep pace by adding the standard checklist of features to its BlackBerries, as defined by the iPhone,” Wolf said. “Unfortunately, RIM’s skills as a hardware manufacturer have been more than offset by it ineptness in software development, the focus of competition today. The blame must be laid at the feet of the company’s Co-CEO’s who in their actions and words, appear to have no clue on how to mount a successful response.”

A brutal assessment. Tough to disagree with it, though, given RIM’s performance this past year.

Recall that last year about this time, co-CEO Mike Lazaridis was claiming that the company’s forthcoming BlackBerry 6 operating system would make “anyone that looks at it…say ‘I want a BlackBerry.’” It didn’t and now a year later the company’s rolling out BlackBerry 7 which isn’t likely to make anyone utter those words either. Meanwhile, it’s said that QNX for BlackBerry–an OS which might actually reignite interest in the platform–won’t be available until 2012.

Add to this the poor critical reception given RIM’s PlayBook tablet,
the company’s warning that current quarter sales and earnings will fall short of earlier estimates amid lower-than-expected sales of its “aging” BlackBerry devices, a series of PR gaffes by co-CEO Mike Lazaridis and co-CEO Jim Balsillie’s penchant for speaking in tongues and, well, it’s not hard to see why some analysts are saying RIM might be better off under new leadership.

Charter Equity Research analyst Edward Snyder is one of them. He says that RIM’s caught in the same sort of downward spiral that wreaked havok at Nokia and Motorola and the only way to escape it is a change in management.

“As with RIM today, the optimism of management in the face of consistently poor results betrayed an intransigence that eventually led to a change in leadership at every major handset OEM that struggled in phones,” he writes. “The political inertia of past mistakes was too great for incumbent CEOs to overcome in order to pursue the aggressive changes required to save the business. The inability to execute in high-end phones over many quarters combined with a detachment from details and meandering, heavily scripted conference calls are symptoms of the malaise. …while it is possible for the company to break from its past and field smartphones that can prevail against Apple, Samsung, HTC and Motorola, we don’t expect that to occur until after a change in leadership.”

Another brutal assessment. But, again, it’s one that’s difficult to disagree with--unless you’re Jim Balsillie.

Tagged with: Blackberry, BlackBerry 7, Jim Balsillie, Mike Lazaridis, PlayBook, QNX, Research In Motion, RIM

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Anonymous

The Rim leadership is totally lacking because of the overwhelming deadwood employees who maintain status quo, mainly the goal of minimal work done for their pays, resulting in humongous bodies of unskilled employees who lack the knowledge, the ability, and the will to do their duties. This mass of deadwood feed off the pitifully few skilled and knowledgeable employees by ripping their efforts claiming as their own credits, not only are the totally inept middle and lower management mainly in the IT support and development directors and managers unable to manage these abhorable political exploitation and virtual modern day slavery and genocide, these acidic deadwood employees multiply like dandelions weeding out the entire Rim company at all levels choking out the life of the once vibrant Rim organization prior to year 2007. Rim management is totally useless but the Rim deadwood makes the colonial plantation slave drivers proud. Any wondering why so many decent and skilled good workers flee Rim to escape from this Waterloo hellhole of a chaotic and horrific maggot laden place? The exodus continues leaving Rim a maggot infested sinkhole.

This stinking Rim management and maggot deadwood culture is glaringly amplified by the ignorant, misguided, unaccountable, simply wrong, often arrogant, and increasingly self restricting behavior of all the rim management
Anonymous

Wolf is a moron. Apple is the one trick pony. One phone!! RIM has many choices. Wolf should jump in front of a bus. The world IQ would then go up.
Anonymous

Jamesey boy, still upset that RIM fired you for incompetence?? You are a monon, just like this Wolf guy. You guys should date. You are meant for each other. You can jerk each other off as you use your flawed iPad’s for watch gay porn.
http://twitter.com/Info_Dave Dave Lindhout

SpaceFace, do you realize how poorly you come off? You start off by calling people names, then you try to bring Apple down with your one trick pony comment. Nothing could be further from the truth. Nobody believes that.

And if that wasn’t enough, you add a separate comment that lowers the conversation even further. You are the one lowering the world IQ, whatever that is.
Anonymous

Smart people believe it. But I’m sure you don’t. Appropriate!!
Anonymous

Another day another unneccessary biased and uninformed RIMM article from the U.S. press – ho hum. When will this get old?

Management will not change because the two Co-CEO’s are also co-founders and large shareholders. Did you feel mentioning that fact would remove the opportunity to make fun of them or did you not do your research?
Anonymous

Even me, a confirmed RIM fan is having some doubt about RIM’s current market plays. Putting a touch screen on the Bold ? My goodness, both the Bold and touch screens have been around for about five years, and RIM is just getting around to updating this feature ? This is hardly innovation, this is catch-up.

And then there’s the Playbook. Great hardware platform, but who came up with the “dance of seven veils” product plan? Why would you think customers would accept all that silliness when there’s perfectly good (and more popular) alternative ?

I do agree with SFD that Jim and Mike are firmly entrenched and will not step down until the company is really in trouble. There seems to be a kind of tunnel vision regarding their products and their relative position in the market. I remember a year ago on a earnings call, Jim was gushing about how the fantastic product road map, how it would redefine the smartphone market and put RIM in a leadership position.

Well, its been a year and I’m not seeing the innovation and market leading products coming from RIM.
http://frugallysavvy.com Frugally Savvy

A lot of companies are letting major players in their companies go in order to move in different paths and industries
Anonymous

“poor critical reception” by analysts is more than a little subjective. I keep hearing this over and over and over, and it is certainly the message screaming from every headline, but when I actually read the ANALYSIS, I’m finding that the Playbook more than stacks up, but everyone seems unnecessarily agitated by the fact that a couple of items will be delayed a couple of months. Contrast this to the ipad delaying basic cut and paste functionality for two years and it’s hard for RIM supporters not to see a bias here.
Anonymous

If RIM has had “consistently poor results” why did these analysts have to consistently increase their EPS estimates over the last three years to match RIM’s results?

Maybe they shouldn’t be asking for accountability too loudly or someone might take a look at their notes.
Anonymous

Growing by more than 50% each year isn’t good enough. Releasing a perfectly-sized lightweight tablet with the most AWESOME multi tasking and a browser that beats most desktop browsers isn’t good enough. We’d rather worship the people who innovate by putting an “i” in front of a feminine hygene product or a phone that can’t cut’n'paste or really multi task with an antenna that vanishes if you “hold it wrong”, and whilst we’re at it, why hasn’t the product released a week ago got 25,000 fart apps yet?
Anonymous

So you’re telling yourself that RIM didn’t fire you but that you “fled”?

I have more faith in RIM’s vision knowing that they identified your psychosis early on in your employment with them James.
Anonymous

This is a company that was doomed when it was successful. It produced what was then seen as a unique product that never attained anywhere near the marketshare of its then competitors – Nokia, etc. They flogged a UI that is so 1990 and somehow convinced the world that all messages should run through Waterloo Ontario. They were lucky in the fact that their main customer – mobile operators never envisioned the Iphone and Android or deals where companies like Apple creamed the profit off the top of a contract deal while the operator had to sit still and wait to re-coop their investment. Having met 1/2 of the dynamic duo you could easily see that hubris would eventually be the poison that would kill the tree. And here we are. How else do you explain the idiotic notion that in order for your tablet to connect to the web you must hook it up to a blackberry as a kind of wireless modem? One wonders whether any management could really help? maybe the best course of action may be to shut it down, return some of the investors money and prosecute their patent portfolio. and they say irony is dead.

Research Immobilized: Time for a Management Shake-Up?

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