Written by Jack Kohane
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Is Research In Motion (RIM) up to the challenge or down for the count? Well, over the past two years, the Waterloo, ON-based maker of the BlackBerry series of smartphones and tablets has shuddered under shakeups of staff layoffs, haemorrhaging market share, operational problems, and the step-downs of Mike Lazaridis and Jim Balsillie who engineered RIM’s rise. In late January came the ascension of former COO and world-wide overseer of the BlackBerry smartphone portfolio, Thorsten Heins, as the company’s prez and CEO. Can the 54-year-old, towering 6’6” leader turn RIM around? Will the heralded BlackBerry 10 phone and new PlayBook – due for launch later this year – give the global tech giant a rebound or an RIP?


Well, tech maven Mark Tauschek is having mixed emotions when it comes to finding an answer. What’s bugging him is not necessarily the recent turmoil, rather the opening statements made by Heins.

“He talked about a more enterprise-focused RIM making a bigger push on the consumer side, but has given no specifics,” argues the Lead Analyst for London, ON-based Info-Tech Research Group. And, when the new CEO opines that RIM requires no ‘drastic change,’ Tauschek says he misses the point. “The company must change, it can’t stay the course,” he says. “The big change for them is going to be a focus on the consumer and that will need a big marketing push. I think Heins flubbed it.”

Tauschek believes RIM’s new CEO must acknowledge that the BlackBerry is no longer the king of the corporate mobile device world. “It’s about what employees want to have in their hands. RIM has long led this fast moving market, but it’s languishing,” he says. “They sit on their laurels of past wins. I’m not sure the company has the capacity to return as the dominant tech player in this space. I’m not bullish on RIM’s chances of roaring back.”

However, that’s no reason to abandon hope. RIM’s corporate changes are a positive step in the right direction. At least financial analyst Mike Abramsky of RBC Capital Markets thinks so.
 







He sees the stepping away of Lazaridis and Balsillie as a good sign because, he says “some investors have highlighted this as one source of RIM’s current problems.”

Abramsky cautions that it’s unclear to what extent the new CEO will be able to significantly impact the vision and direction of the company in light of rapidly changing competitive conditions, and correct RIM’s seeming inability to navigate these challenges. “(Heins) has never been a public company CEO, and lacks deep consumer marketing and software experience,” he remarks, while counseling investors stay neutral for now. He advises a wait-and-see approach, pending visible signs of a RIM turnaround.

Most industry watchers are giving the new CEO two to three quarters to build up RIM’s credibility. “However, we remain concerned that RIM’s window is narrowing to pursue other strategic options, should its plans prove less than successful,” Abramsky asserts.

One option is a buy-out by a strategic buyer or a private equity firm. Investors seem to like the idea. RIM’s share price plummeted 75 per cent in 2011, but as takeover rumours have roiled through the market in recent weeks, the downward spiral has been reversed somewhat. In response to questions by news reporters if one of his goals is to set RIM up for a takeover, Heins curtly replies, “That’s clearly not the mandate.”

Should Canadians care what happens to RIM? Prime Minister Stephen Harper does. He’s waded into the fray, stating his preference that the BlackBerry-maker remain Canadian. Further, the government might even block a hostile takeover or bids for what Harper calls “critical technology” companies. In February, he told the media that “RIM is a strong Canadian company. It’s been an important part of the Canadian business landscape, and obviously we want to see that company succeed and continue to grow as a Canadian company. Not every foreign bid is good for Canada.”

Kevin Restivo, a mobile phone analyst in Toronto, agrees. “Every Canadian who owns a mutual fund with a technology component in their portfolio has a stake in what happens to RIM,” he affirms. “Its ups and downs are felt by all of us; not just as a key economic engine of its home city, but to the country overall.” Noting that the company employs more than 12,000 people across Canada and over 8,000 in Waterloo, Restivo points to RIM’s role as a Mecca for some of Canada’s best tech minds. “That makes it invaluable. People are that company’s lifeblood, it’s not just hard assets that make it important. The intellectual capital at RIM is a treasure trove of technological ingenuity.”
 







As a former VP at RIM, and now the new Chief Marketing Officer at mobile software developer, Fixmo, Tyler Lessard keeps a healthy respect for RIM. “It is still a powerful global company, with a balance sheet that’s positive and strong,” he says from his Toronto office. “RIM continues to sell up to 15 million devices every quarter, and its customer base is fiercely loyal to the brand. Not many of us in the tech market can boast that track record. I wouldn’t discount RIM yet. If it produces a stream of innovations over the next few years, it will remain a huge company. RIM has shown the world the can-do of Canadians. We owe it to RIM to be successful.”


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