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2012: The Crunch Year For RIM

Gordon Kelly


2012: The Crunch Year For RIM

In April last year we posed the question: Is 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.


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 financial 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.


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…

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