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RIM co-founder Jim Balsillie retires on the heels of dire earnings results
No one should have been surprised by RIM’s year-end and fiscal Q4 earnings results, but then again no one expected RIM co-founder Jim Balsillie’s retirement to come at the same time.
Three months ago we reported that Balsillie and RIM’s other co-founder Mike Lazaridis stepped down from their co-CEO positions to sit on RIM’s board, while then COO Thorsten Heins was promoted to new chief executive officer.
Balsillie’s retirement ends his 20 year run with Canada’s leading smartphone maker.
As I complete my retirement from RIM, I’m grateful for this remarkable experience and for the opportunity to have worked with outstanding professionals who helped turn a Canadian idea into a global success.
RIM’s latest earnings report is difficult to digest, even for the most hardened BlackBerry loyalists. The report coincides with two more high profile management exits. David Yach will end his 13 year run with the company as CTO and Jim Rowan steps down as COO, Global Operations, after 4 years. RIM is currently looking to hire a single COO with responsibilities to run the Company’s operations. For fans of the brand, Balsillie’s sudden retirement is a shock, but investors seem pleased with his departure. The company’s stock spiked nearly three percent shortly after the announcement.
RIM reported revenues of US$4.19 billion — down 19% from Q3 — substantially below expectations of US$4.54 billion, while earnings per share ended at US$0.81 as expected. RIM sold 11.1-million BlackBerrys, which was just shy of forecasts — down 21% from Q3. A year ago, the company posted much stronger revenue of US$5.6-billion and earnings of US$1.78 per share. RIM’s stock has lost more than 75 percent of its value in the fiscal year.
Heins admits that the challenges RIM faces over the next several quarters are significant and that he is taking the necessary steps to address them. There will be “increased management accountability and process discipline” and the new CEO is betting hard on BlackBerry 10, BlackBerry Mobile Fusion and new integrated service offerings.
The smartphone maker will refocus on its enterprise business instead of trying to be everything to everyone, but it will not be exiting the consumer market. RIM will enhance support and solutions for enterprise and ahead of BlackBerry 10, the company will be pushing BlackBerry 7 into the entry level smartphone segment — it has new BlackBerry 7 devices scheduled for 2012. RIM will also seek partnerships to deliver those consumer features and content that are not central to the BlackBerry value proposition, for example media consumption applications.
On a positive note, it’s good to see RIM getting back to basics. The company also shipped 500 000 PlayBooks last quarter and from what we can tell, PlayBook OS 2.0 has been well received by the BlackBerry community.
Will we witness an Apple circa 1997 comeback, or is this the death knell for the company that started the smartphone revolution?