Research in Motion's Heins is Full of Beans

New Research in Motion

CEO Thorsten Heins is attempting to distance himself from the company's former leaders , all of whom were apparently incapable of identifying a downward spiral. According to

, Heins cleaned house fairly drastically on the same day that RIMM announced fourth quarter including an unexpected net loss. Former CEO Jim Balsillie departed the board, and other top executives resigned. To be fair, it is a smart move by Heins. Balsillie's forecasts and failed promises to Wall Street seriously damaged RIMM's reputation, and he really has no place anywhere near the company. In the Thursday earnings call after the close, Heins hinted that pretty much everything was on the table, including the potential sale of the company. He suggested that they could license out RIMM's secure BlackBerry network to others. “We believe that BlackBerry cannot be a success if we try to be everybody's darling and all things to all people,” Heins said. He also mentioned the possibility of forming strong partnerships with other companies. He will continue to cut costs, saying, “RIM has a level of complexity that is not conducive to operational excellence.” In a research report published on Friday, Citi said that RIMM's reported February quarter ending sales/EPS results of $4.2bln/$0.80 below consensus of $4.54bln/$0.81 & compared to RIMM's prior guide for revenues to be in the $4.6 - $4.9 bln range and EPS at $0.80 - $0.95 range. “Additionally the company announced the departure of 3 senior executives (former co-CEO, current CTO and current COO) and we are concerned the loss of the CTO, COO and still no CMO puts the company in a position of missing major executive leadership and operational oversight that may impact the quality, timing, operations, product roll outs & talent retention.” Deutsche Bank said that Thorsten Heins deserves credit for doing what his predecessors could not – being candid about the challenges the company faces. Unfortunately, what is left at the company may not be enough alone to overcome their competitive challenges. It is going to be an uneasy ride for the next few months, as the company drops ASP's to maintain their subscriber base, focuses on international markets and cuts costs, all while awaiting the release of BB10. On a similar note, Goldman Sachs said that Mr. Heins appears to be much more of an agent of change than he initially indicated when he first took office in late January. His plan now includes a comprehensive review of strategic alternatives, and shifts the focus toward protecting the 77 mn subscriber base (RIM's most valuable asset, as it drives $1bn in quarterly Services revenues with an 80%-plus gross margin).