Thorsten Heins is either the proverbial ostrich with its head stuck in the sand, or he may be about to engineer the greatest turnaround in the history of the electronics industry. Right now, though, one has to ask the new CEO of BlackBerry (Nasdaq: RIMM; Toronto: RIM) exactly what numbers he was looking at when he recently concluded the company is not in a "death spiral."
That's right. Heins thinks RIM is just going through some minor problems. He told a Canadian radio show "there's nothing wrong with the company as it exists right now," according to news reports. He added: "I am not talking about the company as I, kind of, took it over six months ago. I'm talking about the company (in the) state it's in right now."
He's not done. On July 3, Heins wrote an opinion piece in the Globe & Mail newspaper of Canada to advance his belief that the company is now well positioned to overcome its challenges. Here are excerpts from his article:
We believe RIM is a company at the beginning of a transition that we expect will once again change the way people communicate. As we prepare to launch our new mobile platform, BlackBerry 10, in the first quarter of next year, we expect to empower people as never before. BlackBerry 10 will connect users not just to each other, but to the embedded systems that run constantly in the background of everyday life -- from parking meters and car computers to credit card machines and ticket counters.
Those are big promises, I know; and some doubt whether RIM can pull it off. I am the first to admit that RIM has missed on important trends in the smart-phone industry -- especially in the consumer domain, focusing on its core value system for successful products and services.
As some pundits write RIM's obituary, the company's global subscriber base continues to grow, to more than 78 million people in 175 countries. In many of those countries -- some of the fastest growing markets in the world -- RIM is the top smart-phone; and in some, RIM devices account for the top three spots. We have relationships with 650 carriers around the globe; RIM's reliability and security make it the first choice for countless government agencies and are part of the reason more than 90 per cent of Fortune 500 companies deploy BlackBerry in their enterprises.
RIM has no debt. The company also has more than $2-billion in cash on its balance sheet, and generated $710-million in operating cash flow in its first quarter. Simultaneously, RIM is undertaking a corporate overhaul that we expect will reduce annual operating expenses by more than $1-billion by the end of our fiscal year. Unfortunately, that requires us to become a much more focused and smaller organization.
I don't doubt Heins's sincerity, but I have heard this narrative before. The high-tech community is littered with the carcasses of companies that believed they would somehow engineer a remarkable turnaround, regain old glory, and prove skeptics wrong. RIM had its chance; so did Motorola and Nokia. They helped lead the industry to where it is now but seem to lack what it needs to reach even higher.
If Heins was trying to allay Canadians' fears about the country's future role in high-tech, he may need to reframe the message. RIM's problem is not a reflection on Canada; rather, this is about a company that tripped after dominating in its section for a while. RIM may survive, but it won't in the near future dominate its market segment. That's clear to everyone and should be obvious to even a praise-singing CEO.
I think they need to decide what they want to be. IMHO, they lost their identity along the way, and right now are trying to fight several fights at the same time.
They should also start delivering products and stop talking.
Mr Heins seems to live on a different planet as it appears. He definitely has some explaining to do. I hope the investors will be pleased with what he has to offer.
Thorstein Heins will have the opportunity to further explain and clarify his position when RIM's management meets with stockholders on Tuesday. Hopefully, there will be some good news for investors. (See: BlackBerry's Delay Could Lead to Lawsuits.)
Doubtless. You are right the BlackBerry operating system has some great history in its favor. What's keeping it from playing a bigger role is the fact it lost its footing and the competitors aren't sleeping. How RIM plays its game in the next six months will be crucial to the company's success. Right now, it is managing a downward trend, and not growth or new markets.
@Bolaji, am not an iPhone or Android user but still Nokia. I like RIM's OS - its end-to-end security capability, messenger and PIN-2- PIN request/accept. Pin request and acceptance would fit and work perfectly well in those embedded things, and IOT ( Internet of things).
RIM and a dozen of other companies would like a piece of this multi-connected world. What exactly is different about the company's operating system that makes it a compelling product?
How many such connectable embedded devices exist around us these days? Is it enough to justify buying a new Black Berry?
Research in motion taking lead in that area not bad, the company cant be on the backfoot of M2M, i think. Though, am yet to see much market improvement in invehicle thing and smart metering. Why?
Well Thorsten Heins is probably right about RIM's current position in the technology market when he said, "we're in the middle of a transition". But from clear perspective, this transitional stage can either work to your advantage or detrimental to your wellbeing if caution is not taken – when appropriating actions. Let's just hope he's right when he said, this company is in the middle of it and I'm positive we will emerge successfully from that transition." Its probable delaying the launch of BB10 will work to the company's advantage and possibly propel it to a better position. It's a wait and see game.
@Wale, quite right, BB10 features sounds great. But further delay till 2013 doesn't appear strategically sound. RIM's competitors are all coming out with new device to steadily keep up with the pace within this market. Will RIM continue to offer talks or action? Or is itfine to remain "doing Ok"
Providing connectivity to embedded devices around using a standard device such as a mobile phone is a good idea. However, I am not sure whether this strategy will transform the way we communicate. How many such connectable embedded devices exist around us these days? Is it enough to justify buying a new Black Berry? I think it's still early days. We need to see more of machine to machine applications that are closely knitted into our everyday lives before users are able to feel the need to buy a mobile device supporting M2M applications.
As a medium to long term strategy, the M2M connectivity feature may be a profitable one but I am under the impression that Black Berry currently needs a solution that will be effective in the (very) short term.
By moving to the core of the industry and offerings services that keep the system humming, a group within the electronics market has rendered irrelevant the question of ownership and control of the supply chain.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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