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.
@Ariella: well, exactly, I am wondering why they haven't adopted that strategy instead. In your opinion, is there something we are not in condition to catch?
Information about the new operating system is also constantly changing. They have pushed it out several times to the point where the company may be in danger of losing credibility. I hope they get it right when the operating system is finally unveiled because this may be the last chance for the company notwithstanding what the CEO believes.
@Wale, If RIM would only deliver the new operating system! It has promised and so far failed to deliver the OS while rivals are cornering the market. The company must introduce the new system right away to remain a viable product. At the moment, it's the rivals that are doing while RIM is talking.
"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".
I am waiting to see BB 10 features - parking meters, In-vehicle systems and payment platforms. Well, i think with those, RIM could stand a better chance against its rivals and may be claw back its market share potion currently going to its rival hands in Europe and North America. In emerging market, RIM still doing OK at least.
Ariella, It might have been even better to "show and tell" rather than to just "tell" without substantive evidence backing this up. The BlackBerry may be a top choice in some parts of the world but it's not a top choice today as a smartphone for anyone who has the alternative (iPhone or Samsung Galaxy SIII, for example) in their sights.
Saying "there's nothing wrong with the company as it exists right now," does seem to indicate delusion in this case. It would be better to admit there are things wrong but that they are being identified and addressed.
I might have given RIM more of a chance had the BB10 not be delayed. All of the drama surrounding RIM's decline should have been handled without losing focus on the product.
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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