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RIM Changes CEO. Can it change direction?

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Mike Lazaridis, Jim Balsillie and Thorsten Heins 23rd January 2012

Research in Motion (RIM), the manufacturers of the BlackBerry range of smartphones have a new CEO. Out goes founder Mike Lazaridis along with co-CEO Jim Balsillie and, in comes Thorsten Heins who joined RIM in 2007.

Before starting at RIM, Mr Heins was with the Communications Division of Siemens and has a good industry background, although Siemens quit the mobile business in 2005. Since 2007, he has been a key part of RIM's strategy and product development.

We've been concerned about RIM for a couple of years now, and said at the end of last year that RIM's current strategy was unlikely to win customers back.

Mr Heins appears to be promising more of the same, the financial markets responded by pushing down the RIMM stock price by a further 8%, leaving the stock nearly 90% down from its mid-2008 high water mark, and 75% down from a year ago.

RIM finds itself in a similar predicament to Nokia in recent years, who also appointed a new CEO to change direction. In Nokia's case the new CEO was outsider Stephen Elop, an ex-Microsoft employee who perhaps not unexpectedly aligned Nokia with Microsoft's Windows Phone product. Elop's strategy is high risk, but the alternative was to let Nokia slowly wither and die instead.

The situation with RIM is not quite the same as with Nokia. For example, RIM has a strong corporate customer base who have built their entire mobile communications platform on RIM's products. For those customers, RIM is coming up with a multiplatform management tool called Mobile Fusion which is probably EXACTLY the thing they want with the rise of the Bring-Your-Own-Device (BYOD) phenomenon that is happening with businesses.

 RIM logo However, RIM's recent growth has been in the consumer market, but increasingly the BlackBerry range are looking outclassed by iOS and Android rivals, with Nokia threatening to slurp up any market share left. The PlayBook has been a disaster in sales terms as well, and RIM's new BlackBerry 10 OS may well be an improvement when it ships later in the year, but it is unlikely to fix the problems.

These two markets are different and need to be treated as such. Corporate customer are happy with fairly dull but stable devices, and they want more control over handsets on their networks. Consumers want more flexibility and fun, the sort of thing that Android and iOS offers in spades.

Perhaps RIM need to split off their consumer range, and perhaps even go as far as backing Android but with the own software added to it. Or, as some rumours say, perhaps they should either sell off or merge some or all of the company.

The problem is that "more of the same" is not going to fix the problems at RIM. Hopefully Mr Heins can fix the problems, but it is not going to be a simple task.


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