New RIM CEO Won’t Split Company Up: “I Don’t Think There Is a Drastic Change Needed.”
Research In Motion isn’t broken, so no need to break it up. But it needs better internal focus, and better external focus, too.
That’s the takeaway from new RIM CEO Thorsten Heins, who told analysts this morning that he thinks the company is in pretty good shape, all things considered. Sure, in the U.S., it has been roughed up by Apple’s iPhone and Google’s Android, but it’s still used by lots of people, has lots of fans in big companies and big government agencies, and lots of users around the world.
And the new tech that the company has in the pipeline — a revised version of its PlayBook tablet, and a new operating system due out in the fall — are great. You’ll see: “I don’t think there is a drastic change needed.”
No surprise there, given that Heins, RIM’s former chief operating officer, has been at the company for the past four years. If RIM really wanted someone to blow things up and start over again, they’d bring in an outsider.
Instead, the only external help Heins seems to think he’ll need will be the talents of a new marketing guru, whom he is counting on to reach out to consumers, in particular. But if RIM can’t make a better product than its competitors — or, at the very minimum, one that’s at least as good — I don’t see how messaging will help.
Time for a change. But not too much change!
That’s the messaging around Research In Motion’s CEO swap. The company has yielded to irate investors by moving out longtime co-CEOs Jim Balsillie and Mike Lazaridis. But they’ve moved up an insider — former Chief Operating Officer Thorsten Heins — into the top spot. And if you listen to him, RIM is doing great.
Here’s the “meet the new boss” video that the company put out last night, where Heins says that “sometimes we innovate too much.” And that he likes to ski, but that the hills around RIM HQ in Waterloo, Ontario, don’t really compare to the Bavarian mountains in his native Germany:
Wall Street doesn’t seem overly impressed with the move, or the suggestion from a Wall Street Journal source that the company refuses to consider a sale, and RIMM shares are down 3 percent in pre-market trading. [Correction: RIMM shares are up 3 percent in pre-market trading.]
Now we’ll see if Heins can help make his case in person: He is hosting his first conference call, and we’ll cover it live here, starting at 8 am ET.
8:02 am: Greetings. Apologies in advance, because our nifty liveblog tool seems to be MIA this AM, so things will be a little slower than usual here.
RIM official sets expectations: No financial guidance here. Just Heins and new BOD chair Barbara Stymiest.
Stymiest: Thanks much to Mike and Jim for building RIM. “It is, still today, one of the leading brands in the world.”
Stymiest: Runs through Heins’s resume, heaps praise on him. “The board is very excited about RIM’s prospects for the future.”
Heins: Thanks! RIM isn’t “just a device company,” it’s an integrated service company, with devices and networks. Unique opportunity. “We have an exceptional foundation to build upon.”
“RIM has undergone, and is still completing, a major transformation.” Sure, has “hit a few bumps along the road here and there,” but that happens. Purchasing QNX to create new platform for company was a bold move, and we’ll see that it was the right decision over time. PlayBook 2.0 will be great. So will BlackBerry 10.
Q: Please go into detail: What are your priorities for the next 100 days?
Heins: We need to get better at market communications. We have strong tech, strong customer base, growing overseas. “The U.S. is a bit different.” Public opinion there is that we’re still strong in enterprise, but we need to be better about explaining ourselves as a consumer company. “We need to engage more with the consumer base … we need to take them with us on the journey of exploring BlackBerry in the future.” Also, we need to execute better. We have to scale processes further, need to have “rigid” management for product development, etc. Gotta understand RIM has grown very quickly. But “we innovated while we were defining the product,” and “that needs to stop” — need to have “way better execution.” “I’m pretty sure this will really help us a lot, and really help our customer base a lot.”
Q: Seems like lots of your success has been in the “low-end market” in Asia. Thoughts on that? Also, thoughts on getting BlackBerry 10 out next fall as planned?
Heins: You say “low end”, I say “entry level.” We can’t make phones with less power. But there’s a big market that is still using feature/“dumb” phones, and we can move them to smartphones. They won’t go to the most powerful phones right away. We need to give them a good landing point. Once we prove to them that BlackBerry is a great place to start, we’ll move them up the ladder. “That’s the strategy behind the ‘BlackBerry for Everyone’ strategy.” As far as BlackBerry 10 — it’s not just a new OS, it’s a whole new infrastructure. Need to be clear about that. “That work is underway.” By the way, we’re also going to have an Android player with PlayBook 2.0, so we can leverage the “long tail” of all those apps, if people want those.
Q: Last year, you also were bullish about QNX. Why are you still confident about that? That seems like a “me-too OS, that is just catching up” to Android, iOS.
Heins: Again, QNX is an existing OS. Used on power grids. “It is a proven OS.” Allows true multitasking — “I mean, true multitasking.” “It is an extremely competitive OS as of today.” Very smart of Lazaridis to buy this instead of trying to build our own.
Q: On last RIM call, you guys talked about strategic options the company was looking at. Those options still available?
Heins: You mean licensing? Let me be clear: We can’t just be in the device-only business. “We are strong because we have an integrated solution … I want to build on that. I will not in any way split this up.” As far as inbound licensing requests, I’ll listen to them, and if they make sense, but “it’s not my Focus One.” Apple, “the other fruit company,” only other company with this kind of integration, and I want to take advantage of that strength that we have, too.
[Missed Q, but Heins is now talking about marketing, which he says needs to get better, specifically with consumer marketing.]
Q: You’ve been here four years. What can you do now as CEO that you couldn’t do as COO?
Heins: We were still kind of a start-up when I came on. But “start-up processes don’t scale.” So we need to change that. I’ve been able to study how the culture works. “I don’t think there is a drastic change needed”; we are “evolving.” “I don’t feel I was held back in any way to do what we needed to do.” But we do need to get better about “processes.” Again, I do want us to focus more on consumer marketing.
That was a fast call, and now it’s over.