2012: The Crunch Year For RIM

In April last year we posed the question:

RIM the Next Nokia? Nine months on the continued decline of the

Canadian smartphone giant makes that seem like wishful thinking.

“We

haven’t considered acquiring the firm and are not interested in it”.

This was Samsung’s brutal and dismissive response to news last week that

Research in Motion was trying to

sell itself to the South Korean giant. Unsurprisingly, given the

nature of the put down, RIM also denied the reports – as it has

denied sales to Nokia, Microsoft and Amazon. The picture is getting

tired. Much like a teenager looking for a date it allows rumours of

interest to escalate then becomes angry and curt when each potential

partner shoots them down. The “well-I-didn’t-care-about-them-anyway”

approach.
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Regardless of whether any of these stories are true, however, being shot

down so comprehensively by its peers can’t be doing RIM’s confidence

any good. And sure enough, over the weekend both co-CEOs, Mike Lazaridis

and James Balsillie [above] stepped down from their roles to be

replaced by previously little-known executive Thorsten Heins [below],

who for the time being will continue with the company’s existing plans.

Thorsten Heins

“The last few quarters have been some of the most trying in the

recent history of this company,” admitted Balsillie after the company’s

latest round of

results in December. “We recognize that our shareholders may feel we

have fallen short, in terms of product execution, market share, and

financial performance… We are leaving no stone unturned, and are

evaluating a number of areas including product management and the number

of SKUs offered, supply chain and bill of material cost efficiency,

marketing and advertising, partnership and licensing opportunities,

organizational and management structure, [and] opportunities to leverage

the BlackBerry infrastructure.” In short: RIM will try anything.

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We shouldn’t be shocked. RIM’s December Q3 figures showed a 71 per cent

decline in net income, the PlayBook made a $485m loss and looking

forward it admitted revenue and handset shipments would continue to fall

and its next generation BlackBerry 10 smartphones would be delayed

until late 2012. During 2011 RIM’s valuation dropped 75 per cent.

Only

last week Balsillie proclaimed, “To further demonstrate our passion,

alignment and commitment to RIM’s long-term success, both Mike

[Lazaridis] and I have asked the compensation committee to make a change

to our cash compensation, such that our salaries will be reduced to

$1.00 per year, effective immediately” – quips immediately followed

suggesting the duo were ‘worth every penny’.  But even this gesture has

proved too little too late with new blood at the top being deemed the best way forward.

The future looks incredibly bleak, but is there a way out? Well yes and no…