RIM’s Heins: Deluded CEO or Visionary?

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 {complink 4644|Research In Motion Ltd. (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.

18 comments on “RIM’s Heins: Deluded CEO or Visionary?

  1. Barbara Jorgensen
    July 5, 2012

    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.

  2. Ariella
    July 5, 2012

    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.

  3. bolaji ojo
    July 5, 2012

    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.

  4. Wale Bakare
    July 5, 2012

    “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.

  5. bolaji ojo
    July 5, 2012

    @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.

  6. bolaji ojo
    July 5, 2012

    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.

  7. mfbertozzi
    July 6, 2012

    @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?

  8. t.alex
    July 6, 2012

    People are no longer excited wih BB10 any more. They instead are busy with android Jelly Bean or anticipating the next upgrade iOS6.

  9. Cryptoman
    July 8, 2012

    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.

  10. Anna Young
    July 8, 2012

    @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 it  fine to remain “doing Ok”

  11. Anna Young
    July 8, 2012

    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.

  12. Wale Bakare
    July 8, 2012

    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?

  13. bolaji ojo
    July 8, 2012

    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?

  14. Wale Bakare
    July 8, 2012

    @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).

  15. bolaji ojo
    July 8, 2012

    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.

  16. bolaji ojo
    July 9, 2012

    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.)

  17. Anna Young
    July 9, 2012

    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.

  18. Mr. Roques
    July 11, 2012

    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.

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