The meteoric rise and fall of Blackberry maker Research In Motion (RIMM) entered a new era today after the company announced that Thorsten Heins would take the reigns as the company’s new CEO, replacing former co-CEOs Jim Basillie and Mike Lazaridis. Investors had been calling for a change in management for quite some time as RIMM’s inability to compete with the growing number of competitors in the smartphone and handheld devices market turned what was once the biggest darlings of the sector into an also-ran against the likes of Apple (AAPL), Samsung (SSNLF), and others powered by Google’s (GOOG) Android operating system. The company also failed to generate much interest with its PlayBook, which has also been left behind by competitors like the iPad and Amazon’s (AMZN) Kindle.
Yet, the announcement did not spark renewed confidence from Wall Street. In fact, the reaction was quite the opposite as shares of Research in Motion fell as much as 9 percent today after Heins, the company’s former COO, was named. The criticism seems to be that while changes in management is a step in the right direction, promoting from within could suggest that the company’s future is still stuck on the same path. It’s the same path that took RIMM investors down from an all-time high share price of $144 in 2008, to as low as $12 just last month.
Running in Place
Heins joined Research in Motion in 2007 after serving as the CTO for Siemen’s (SI) Communications Division. While he’s been recognized as having exceptional leadership and organizational skills, investors are still wondering whether he has what it takes to help Research in Motion recover from such prolonged stagnation. Heins attributes the company’s lack of success on poor process execution and marketing, not on innovation or overall strategy.
“Seems like more window-dressing than a real reorganization,” Ed Snyder of Charter Equity stated in a note to clients. “COO Thorsten Heins took direction from Balsillie and Lazaridis when they were co-CEOs, and as the newly appointed CEO he’ll still be under their review as Board members. No company gives board seats to the management team that got it into the mess to begin with.”
For now, Heins may be focused on staying the course and improving operations, which has been a major flaw at the company in recent years. He also said the company will not split its hardware and network divisions and plans to launch the Blackberry 10 OS and new devices later this year.
