Solutions to help your business Sign up for our newsletters Join our Community
  • Share

Blackberry fallout: Does RIM really have a plan?

RIM CEOs, staying put while cutting staff, promise their big plan is near fruition, driven by consistent features and capabilities across its entire upcoming Blackberry 7 product line

Drama! Suspense! Tears! Well okay, not tears, but RIM still delivered a juicy, off-script 2012 first quarter analyst earnings call June 16.

More on this Topic

Industry News

Blogs

Briefing Room

While a "challenging" quarter (to borrow from RIM Co-CEO Jim Balsillie), news of upcoming layoffs and the warning of a rocky second quarter sent RIM stock plummeting — by as much as 13 percent in German trading, according to Bloomberg — the message that co-CEOs Jim Balsillie and Mike Lazaridis seemed intent on sending analysts away with is that a strong, bound-to-succeed plan is in the works, and while they're not out of the woods yet, they're really, really close.

"While I can't promise that there won’t be bumps in the road ahead, I can assure you that Jim and I have never been more committed to the business and that our interest remains closely aligned with those of our shareholders," said Lazaridis.*

In recent months, analysts have criticized RIM's aged smartphone ("long in the tooth" is a dig that sticks in the mind), and the pair took pains to explain the new-device hold up. RIM was "well down the development path for the next generation of BlackBerry handsets," Lazaridis explained, when it became clear that necessary features and performance upgrades would demand an upgrade of the chipset and the porting of the BlackBerry OS to a higher performance platform — which led to changes in the hardware and software timeline and unexpected challenges in the carrier lab certification process. However, the ultimate reward of that process will be that RIM will have the same platform across all of its high-end BlackBerry 7 products, which will enable it to accelerate the certification process for each product.

"This now enables the largest global launch of BlackBerry products in our history and allows us to rollout a rapid succession of launches over the next several months," continued Lazaridis. "I'd have liked nothing more than to get these BlackBerry 7 handsets out sooner and believe me, we did everything we could to make that happen. But when customers experience the quality, consistency and upgraded user experience we've achieved in these new products, you'll understand why it was worth the wait."

(The BlackBerry Bold 9900 will be the first RIM phone to run the new 7 OS.)

In addition to standardization across the BlackBerry 7 platform, other components of the plan include work on the QNX OS, which BlackBerry handsets will eventually transition to, and updates to the BlackBerry PlayBook. Later in the call Lazaridis added:

We haven’t delayed the work that we’re doing [on] the QNX-based Superphone and to converge on QNX as our future platform. That's something that we've talked about and something we're working very hard to accomplish here. So, what's really exciting is there is a steady cadence now of BlackBerry PlayBook updates and then you're going to start seeing the 4G PlayBooks coming out in the fall, which are going to be very exciting and very powerful products. So again, I am very confident with the plans now that we are sort of basically through the worst of the transition.

Net income during RIM's fiscal first quarter was $697 million (compared to $934 million during the previous quarter and $769 million a year ago) on revenue of $4.9 billion (compared to $5.6 billion a quarter ago and $4.2 billion a year earlier). RIM shared that it shipped 500,000 PlayBook tablets, but declined to share how many it actually sold.

"While the PlayBook launch did not go as smoothly as we had planned, the potential of the product and the powerful underlying OS was recognized and acknowledged by partners, channels, reviewers and end users," said Balsillie. "We have already rolled out updates of the product to deliver compelling features, such as video chat, and a native Facebook application, and we look forward to adding content partnerships and growing the available applications over the coming months."

Still another part of the plan is a major headcount reduction.

"I mean, we have grown so much over the past few years and we’ve done, I don't know, 14 or 15 acquisitions in the last year and a bit, and so this is just a streamlining exercise," said Balsillie.

The company will, however, remain doubled up on CEOs and board members, despite a recent request from RIM investor Northwest & Ethical that Balsillie and Lazaridis stop sharing the posts.

Such a move, Balsillie suggested, would be as meaningless as reprinting business cards.

"The fact of the matter is," said Balsillie, "I think I have expertise in what I do. I think Mike has the thing of expertise when he does. I think there are parts that overlap and we highly coordinate it."

Lazaridis offered an old adage to describe their working style. "There's a saying, 'Measure twice, cut once.' You want to make sure that the decision you are going to make is the right one, and I think that Jim and I have that perfect balance to be able to make the really hard decision."

With a promised payoff said to be just around the bend, RIM investors are no doubt hoping these two careful seamstresses have made all the right choices.

* Quotes from the RIM press conference in this story are taken from a Morningstar transcript of the event

Want to use this article? Click here for options!
© 2014 Penton Media Inc.

Learning Library

Webcasts

White Papers

Featured Content

The Latest

News

From the Blog

Briefingroom

Join the Discussion

Resources

Get more out of Connected Planet by visiting our related resources below:

Connected Planet highlights the next generation of service providers, as well as how their customers use services in new ways.

Subscribe Now

Back to Top