Thorsten Heins

'Seismic change' not needed at RIM

Research In Motion’s new CEO Thorsten Heins says the BlackBerry maker does not need seismic change.

Takeover talk swirled around RIM as Heins took the helm at the struggling company, whose co-CEOs Mike Lazaridis and Jim Balsillie finally bowed to investor pressure and resigned on Saturday.

Heins, who joined RIM in 2007 and was previously a chief operating officer there, said he would focus on a consumer push and a smooth delivery of its products, rather than allowing a churn of innovation to disrupt rollout, as in the past.

"We innovated while we were developing the product and that needs to stop," Heins said. "We need to innovate, don't get me wrong, but ... when we say a product is defined and a product is a product, execution has to be really, really precise."

Still, the former Siemens AG executive hinted he would stick to the current strategy, saying the company needed scaling up, not a dramatic transformation. Lazaridis and Balsillie also gave up their position as co-chairman of the RIM board, but retained seats on the board, suggesting continuity was a goal.

"I don't think that there is some drastic change needed. We are evolving... But this is not a seismic change," Heins said.

Key shareholders and analysts alike signalled they are impatient for drastic improvement at a company that has lost market share and market value after being comprehensively outplayed by the likes of Apple and Google.

"If Thorsten really believes that there are no changes to be made, he will be gone within 15 to 18 months. He will be a transitional CEO and this will be a transitional board," said Jaguar CEO Vic Alboini, who leads an informal group of 16 RIM shareholders holding just under 10 per cent of the company's shares. Alboini criticized the retention of Balsillie and Lazaridis on RIM's board and called for several other board members to step down before the company's mid-year annual meeting.

"If we're wrong, prove us wrong," Alboini said in an interview, referring to the group of shareholders who support his view. "This group is not going anywhere. This is just putting RIM in a position where it might be able to get back into the game. It's early days."

RIM looks badly in need of a leader that can rejuvenate both the design and operational sides of the business or prepare it for sale to one of a raft of rumoured buyers, its critics said.

"If there are no meaningful signs of an imminent turnaround then I think the spotlight will turn back on to the assets that RIM holds and who they might be attractive to," CCS Insight analyst Ben Wood said.

"The annual analyst event in May will now become the focal point to the unveiling of Thorsten's vision. We know the speed with which you make strategic changes and implement them is absolutely critical because the mobile phone business will not stand still."

On the surface, the former Siemens AG executive appeared to suggest he would stick to the current strategy, but analysts expect that to change in the coming months.

"It takes nine months for a product to get to market once you have thought about what you want to do," Gartner analyst Carolina Milanesi said. "They are looking at least a year from a transitional perspective.

"Picking Thorsten is a sign that they haven't quite decided that (a sale is what) they want to do, so they might give it yet another shot at looking at the business and trying to come back".

As the window for a turnaround closes, the clamour from shareholders for the company to license its technology to third parties or even sell the business has got louder.

"RIM's Achilles heel is its hardware focus," said Victor Basta, managing director at Magister Advisors.

"IBM is a very rare exception to the rule, but it took them a decade to transition from a hardware to a software focus. RIM does not have the luxury of a decade."

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