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Analysts: RIM's New CEO Is Just Window Dressing

BlackBerry just made its biggest executive change in nearly 30 years, but Wall Street and industry analysts agree it wasn't nearly big enough. (See RIM Co-Chairs Step Down.) "It looks like window dressing," says Ovum Ltd. analyst Jan Dawson of former COO Thorsten Heins's appointment. "'Fine, we'll give you a new CEO, but not a new strategy or change in direction.' [Outgoing Co-CEOs Mike Lazaridis and Jim Balsillie] are still there behind the scenes pulling the strings, while he's the figurehead."

Dawson's comments come as RIM's new CEO Heins said on a media call Monday that he that he'd stick to the plan outgoing co-CEOs put into motion and step up marketing instead. RIM's stock fell nearly 6 percent after the call. (See New RIM CEO: We Must Execute Better and RIM CEO Says No 'Seismic' Change Coming.)

"Marketing is a weak point for them right now, but it just seems like their entire strategy needs to be changed," agrees Pyramid Research analyst Emily Smith. To date RIM's focused on targeting the "prosumer," or the tech-savvy user who requires top security and lots of enterprise functionality, not the mass consumer market, she says.

"Now that the tech guys aren’t making the purchasing decisions anymore, they're losing market share and their sales are declining," Smith adds.

Apple Inc. (Nasdaq: AAPL) and Google (Nasdaq: GOOG) have been able to keep up changing IT buying dynamics, according to Sterne Agee analyst Shaw Wu, whereas RIM hasn't. He agrees that someone with a stronger consumer background would have have fit the bill for CEO more than Heins, whose roots are at Siemens AG (NYSE: SI; Frankfurt: SIE).

"We frankly would not be surprised to see RIMM implement further senior management changes in the future," Wu wrote in a research note.

Will RIM be an Apple, a Nokia or an HP?
RIM isn't the first company to change its executive structure in the past year. HP Inc. (NYSE: HPQ) added an outside exec as CEO, which many said that RIM should have done, but so far hasn't done much besides flip-flop on its mobile strategy. (See 2011 Top Ten: Corporate Gloom & Doom.)

Nokia Corp. (NYSE: NOK), too, brought in an outsider in Stephen Elop, but has struggled to make a change quickly enough, a path RIM is well on its way to taking. (See Nokia Unveils Major Revamp and Euronews: Crunch Time for Nokia's Lumia.)

But, Apple also made a change from within, appointing its COO, Tim Cook, as CEO, replacing the late Steve Jobs. This is the "other fruit company" RIM clearly wants to emulate, but it won't come from just focusing its marketing. (See Steve Jobs Resigns as Apple CEO.)

"COO-to-CEO transitions makes sense if the vision is clear and what's really needed is good execution," Ovum's Dawson says. "RIM needs a better vision and a better execution. Handing it over to the guy who hasn't done a great job on execution without a clearer vision just doesn't make sense."

— Sarah Reedy, Senior Reporter, Light Reading Mobile

DCITDave 12/5/2012 | 5:44:52 PM
re: Analysts: RIM's New CEO Is Just Window Dressing

Just for a second, let's take the man at his word. RIM grew its BlackBerry subscriber base by about 75M subs around the world last quarter. It showcased 2 major OS updates at CES and doesn't seem to be sitting still.


It has an LTE phone coming soon and we're well aware of its chipset woes (see Q3 results). And it's selling a 64GB tablet for $299, which is a great price given how competitive and confusing the market is right now.


The marketing at RIM is a mess but there are a few things to like about RIM. Given that it's so easy to kill them for not being Apple or Google, I wonder if anyone's going to take the time to tell the other side of the story.

Pete Baldwin 12/5/2012 | 5:44:51 PM
re: Analysts: RIM's New CEO Is Just Window Dressing

> The marketing at RIM is a mess but there are a few things to like about RIM. Given that it's so easy to kill them for not being Apple or Google, I wonder if anyone's going to take the time to tell the other side of the story.


Some people agree that RIM doesn't need an overhaul in strategy. Chris Umiastowski, former financial analyst turned blogger, for one:


www.chrisumiastowski.com/weighing-in-on-rims-new-ceo


He writes: "Does RIM need a big change in strategic direction? Thorsten says NO, and I agree. What they need is better and faster decision making + execution. And marketing. They said they’ll be hiring a CMO, which is absolutely the right move."

paolo.franzoi 12/5/2012 | 5:44:50 PM
re: Analysts: RIM's New CEO Is Just Window Dressing

 


I guess I stand by my pretty simple analysis.  What does RIM do in the realm of BYOD.  BEM is moving from a strength to a don't care.  With Active Sync, you can do pretty much all a Blackberry does without BEM.  As baseline service moves from within the Firewall to into the Cloud, they really have to figure out what they are going to do. 


I was in the hospital over the holidays and came home and had home health care.  The nurses were using a smartphone to do their data input, but it was an Android phone not a Blackberry.  Think that would have been true even 2 years ago?


I have not seen anything from RIM that makes me think that these trends are reversing.  If anything, they are accelerating. 


seven


 

jdbower 12/5/2012 | 5:44:49 PM
re: Analysts: RIM's New CEO Is Just Window Dressing

"What does RIM do in the realm of BYOD."


I'd personally love to have a BB running in a VM on my Android phone.  BYOD is great, but it means giving my company control over my personal phone and co-mingling my work and personal life.  Strip down BBOS into a secure "Outlook for Android" (possibly with a browser for corporate Intranet sites) and pop it into something like VMWare's Horizon Mobile virtualization to give me isolation between my physical device and my company-controlled mail reader and I'd be a happy camper. It lets BlackBerry focus on their bread-and-butter, secure corporate email.  Rather than trying to attract developers or get Android apps to run on anemic hardware they can focus on critical things like getting VPN clients and business-critical applications running on the VM instead of needing to worry about game performance.


Sadly, the announcement of "just kidding, we're not really changing anything except putting more money into marketing" doesn't seem like it's enough.  As brookseven mentions, the ActiveSync control and security is rapidly closing the gap with a dedicated BBES.

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