Research in Motion’s new CEO will have to move swiftly to shift its focus away from purely hardware, a financial advisor has claimed.
Thorsten Heins stepped up from COO to take control of the BlackBerry manufacturer on Monday (23 January). His appointment saw the exit of Research in Motion’s co-CEOs and founders Mike Lazaridis and Jim Balsillie. Lazaridis will become vice-chair of RIM’s board and chairman of a new innovation committee. Balsillie will remain at the company as a member of the board.
Heins’ appointment was met with a muted response. Victor Basta, MD of Magister Advisors, which provides assistance to technology companies seeking growth through mergers or acquisitions, said: ‘RIM’s achilles heel is its hardware focus. The brutal reality in this day and age is that businesses that are hardware-centric cannot succeed. IBM is a very rare exception to the rule, but it took it a decade to transition from a hardware to a software focus. RIM does not have the luxury of a decade. It operates in the rapidly changing mobile space and there is far less time available. Nokia, for instance, went from leader to laggard in two years. RIM arguably has less time than that.’
Ernest Doku of comparison site uSwitch.com said: ‘Thorsten Heins’ rescue package involves rallying RIM’s troops to launch the next generation BlackBerry 10 phones later this year. His focus on delivering the hardware is admirable, but this hasn’t worked for RIM thus far. The smartphone market is saturated, and the worry is that RIM is always one step behind the other big players.
‘Investors have been questioning for a while what RIM’s strategy is. The problem is that the likes of Apple and Samsung are so dominant in their space that it’s hard to envisage what RIM can do now to gain any ground.’
Investors had been seeking change at RIM for some time, with rumours circulating that the business was up for sale. In its most recent results, net income slumped 71% as the manufacturer wrote off $356m in unsold BlackBerry PlayBooks.
Heins joined the Canadian manufacturer from Siemens in December 2007 as senior VP for hardware engineering. He was appointed COO for product and sales in August 2011. He said: ‘As with any company that has grown as fast as we have, there have been inevitable growing pains. We have learned from those challenges and, I believe, we have and will become a stronger company as a result.’