RIM's new CEO wants to focus more on consumers
- 24 January, 2012 03:09
RIM's new CEO, Thorsten Heins, wants the company to improve its product development while also becoming better at marketing, he said during a conference call on Monday.
Heins is taking over from Mike Lazaridis and Jim Balsillie, who had co-CEO roles and will remain with the company.
"I pledge to do everything possible to exceed the expectations of all of the company's shareholders," said Heins.
RIM's decision to pick its new CEO from within the company makes it clear that it won't budge from current strategy, which is based on its acquisition of the QNX operating system, according to Geoff Blaber, analyst at CCS Insight. QNX is already used on its PlayBook tablet, and will also be used on its smartphones with the arrival of BlackBerry 10, Blaber said.
"Eighteen months ago Mike and Jim took a bold step when we had to make a major decision around our future platform, and they purchased QNX to shepherd the transformation of the BlackBerry platform for the next decade," Heins said. "Right now, with PlayBook 2.0 coming out in February, we are more confidant than ever that this was the right path to go."
At first, Heins will focus on improving the company's marketing efforts, which include hiring a new chief marketing officer as soon as possible, and the way it develops products.
"We need to be more marketing driven, and we need to be more consumer-oriented because that is where a lot of our growth is coming from," said Heins.
RIM will also change how it develops products. The company has been innovating while developing the products, and that needs to stop, Heins said.
Innovation will take place with much more emphasis on prototyping, and RIM has great teams that can try new ideas out, he said.
"But when we say a product is defined ... execution has to be really, really precise, with no churn in existing development programs," said Heins.
Heins didn't address rumors about RIM being acquired, but emphasized that its current model is the way forward.
"I will not in any way split this up or separate it into different businesses," said Heins, adding that while he will listen to anyone who wants to license BlackBerry 10, it is not his main focus.
Picking a new CEO from within was the right decision, according to analysts.
"Heins has been the COO for some time. He has been at RIM for over four years now, and he has been leading the current product transition," said Blaber. "It will be about delivering on the strategy they have already embarked on."
Pete Cunningham, analyst at market research company Canalys agreed: "RIM has been stagnating and needed an injection of fresh leadership."
Bringing someone in from the outside would have been riskier, according to Cunningham.
The big challenge now is to get BlackBerry 10 smartphones to market as soon as possible. In December, RIM said it would not start selling phones with the software platform until the "later part" of 2012, because it wanted to wait for the arrival of more advanced chipsets.
"It is hard to see that a change of leadership at the company can accelerate that schedule terribly much," said Cunningham.
Products based on the BlackBerry 10 platform were expected to arrive earlier, and the delay has hurt RIM, according to Blaber.
"The reality is that creating a new platform, albeit be it on a pre-existing operating system in QNX, was always going to take some time," said Blaber, who thinks that the development of the PlayBook distracted RIM's engineering department to the detriment of new smartphones.
Another of Heins' main challenges will also be to help RIM regain some of former glory in the U.S. The company watched its market share drop from 24 percent in the third quarter of 2010 to just 9 percent in the same period last year, according to Canalys.
However, the picture for RIM in other parts of the world is more positive. The Middle East and Africa and Southeast Asia were particular bright spots during the third quarter, Canalys said.
"There are a number of markets where BlackBerries are still selling really well, but the problem RIM has that everyone is focused on the U.S. market, and that is where is has taken a real beating," said Cunningham.
It is likely to get worse before its gets better for RIM. Just like vendors such as Sony Ericsson, Motorola Mobility and HTC RIM struggled during the fourth quarter.
RIM has its BlackBerry World conference coming up at the beginning of May. That will be one of the first opportunities for Heins to present his vision for the company, and bring back some excitement.
"But that will not be an easy job," said Cunningham.