RIM shifts CEOs in hopes of making a come back

Jan. 20, 2012 saw RIM's stocks close at $17.24 CAD a share, which is significant as the same stocks used to sell at $148 a share. This dismal rating is one of the reasons cited for shareholders encouraging RIM's co-founders and co-CEOs Jim Balsillie and Mike Lazaridis to pass the torch of leadership.  

Research in Motion (RIM) is one of Canada's most recognizable technology-related corporations, and is the maker of the BlackBerry brand of handheld cell phones. Its current financial troubles have resulted in large scale layoffs, and could see parts of the company sold off if circumstances do not improve.

RIM's new CEO is Thorsten Heins, 54-years-old,  who was born and educated in Germany. Heins has been with RIM since 2007 as the Senior Vice-President and later as Chief Operating Officer (COO) for products and sales.  

Before joining RIM, Heins worked for Germany's premiere tech and phone giant Siemens AG.

This CEO change did little for shares on Jan. 23, 2012 when stocks dropped even further to $15.67 despite the shift in leadership. The last few years has seen RIM floundering among other tech and hand held giants such as Apple and Samsung. The change-up suggests that Heins has a year to turn things around before shareholders are willing to take more drastic action and a more complete management restructuring.

Some critics are even suggesting that the current change in management was too-little too-late, and take issue with the fact that both Balsillie and Lazaridis are still on the Board of Directors, just in different positions.

To understand what needs to change, it's best to discuss what has gone wrong for RIM in the last few years. When the iPhone was initially released in 2007, RIM's original CEOs chose to stay dedicated to their business focused marketing and design approaches, ignoring the new model. When the iPhone — and shortly after new Android phones — became popular both in and outside of the business sector, RIM was left scrambling, trying to catch up.  

2011 was a particularly poor year for RIM. With their late-coming PlayBook tablet failing to effectively compete against products like the iPad, RIM was forced to take a loss and sell them discounted in order to attract consumer attention. October 2011 also saw one of the companies worst service outages, resulting in millions of BlackBerry users unable to access their E-mails and BlackBerry Messenger (BBM) messages. The result of these outages was a calculated loss of approximately $50 million.

Not all hope is lost for the company though. Many hand-held devices rely upon RIM's proprietary BlackBerry Operating System (BlackBerry OS), and the upcoming BlackBerry 10 — the next generation of RIM's OS — which is slated for release in September 2012. Much of RIM's financial future depends upon the success of the new OS and the sales of phones that will use it. Just how much of the company's future is riding on the new OS will depend on how Heins decides to market it, and what innovative functions this new OS will provide for users.