RIM: Meet the New Boss, Same as the Old Bosses
In handing the CEO reins over to an unknown insider who has vowed to follow the course already laid out by his predecessors, Mike Lazaridis and Jim Balsillie, RIM’s big change really seems to be no change at all. Indeed, watching Heins’s video introduction last night, he sounded a lot like the company’s oblivious founders.
“Sometimes RIM innovates too much.”
“We sometimes think the unthinkable. And that is fantastic.”
“If we continue doing well what we’re doing, I see no problems with us being in the top three players worldwide in the next years in wireless.”
Balsillieisms — all three of them. And together they describe a complacency that doesn’t do much to inspire confidence. Certainly, Wall Street was quick to voice its skepticism over Heins’s appointment. Below, a selection of analyst reactions:
Charlie Wolf, Needham:
Mr. Heins joined RIM in 2007 from Siemens Communication Division and since 2009 has been Chief Operating Officer overseeing the BlackBerry product portfolio worldwide. During this period, RIM introduced one failed model after another up through BlackBerry 7. This does not offer us great confidence that he can turn BlackBerry around, even excluding the fact that Mr. Lazaridis and Balsillie will be looking over his shoulder throughout.
Amitabh Passi, UBS:
While we think this is a small step in the right direction, we are surprised RIM has decided to go with an operations minded insider, especially since we consider the challenges tied more to strategy. We don’t believe these announcements (likely propelled by shareholder and, quite possibly, some Board pressure) will produce much change in the short-medium term, and much will depend on the success of BB10.
Pierre Ferragu, Bernstein:
Thorsten Heins remains an insider, and we lack conviction on whether or not he will be making the sort of bold moves required (Android adoption, strategic partnerships) to put the company on a better track. We continue to believe that a strategy based on the development of a proprietary ecosystem is bound to fail and initial comments in the press release and Canadian press suggest the new management team remains unfortunately committed to the current strategic direction of the company. We are also worried that the new CEO doesn’t seem to fully recognize the dramatic loss of traction we see in the market for BlackBerry products.
Ed Snyder, Charter Equity:
At first blush this seems more like window-dressing than a real reorganization. COO Thorsten Heins took direction from Balsillie and Lazaridis when they were co-CEOs, and as the newly appointed CEO he’ll still be under their review as Board members. And with Lazaridis already talking up his intent to play an active role in innovation by committee, today’s announcement seems more like window-dressing than real reform.
Ehud Gelblum, Morgan Stanley:
We view this as a good first step in the right direction, as the board of directors finally appears to be doing what a board should always do, which is to make sure the CEO is effectively doing his or her job leading the strategic direction of the company. However, we do not believe this move is enough, especially as Heins is an internal hire and not an independent fresh voice. We also worry that Heins has had little experience setting a vision or strategic direction for the company, and has instead been more involved implementing the products and strategy devised by Mike and Jim.