Market Overview

Research in Motion Places Blame at the Top


How long is a CEO given to guide a company to seriously compete against a giant like Apple (NASDAQ: AAPL)? Apparently the answer is two decades, in the case of Research in Motion (NASDAQ: RIMM).

The blackberry maker has decided that enough is enough and, after seeing the iPhone become the ultra-cool, desirable phone of choice for the hipsters and yuppies alike, it has taken the decision to replace co-chief executive officers Jim Balsillie and Mike Lazaridis.

Adding insult to injury for Balsillie and Lazaridis, they are being replaced by one person, Thorsten Heins, the chief operating officer who joined RIMM from Siemens four years ago. Heins new position as CEO is effective immediately.

According to Bloomberg, Ehud Gelblum of Morgan Stanley is not excited about the new appointment. “Heins is a product execution guy, he's not a visionary. Heins has to give people a reason why they need a BlackBerry. It's going to be very difficult for him.”

Gelblum is not wrong. If recent history has taught us anything, it is that Apple knows how to hang onto a market once it has wrestled it away from the nearest competitor. Now that a large number of consumers have switched to the iPhone, the question is not whether to go back to a Blackberry, but when they are able to get the next version of the iPhone.

Under Balsillie and Lazaridis, RIMM showed no sign of matching Apple and Google's (NASDAQ: GOOG) market share, releasing products that just did not excite tech-heads, and so the writing was on the wall for them. When stock tumbled 75 percent, they probably started writing their own obituaries. So what will Heins do that will be radically different enough to recapture a significant share in the market and at least threaten Apple's stranglehold?

“They're going to have to run fast,” Rene Schuster, CEO of Telefonica SA's German unit, said to Bloomberg. “They have a good brand. The question is: are they now able to bring new innovation to the market so that when a consumer looks at the choice they're going to pick RIM? It's going to be a challenge for them.”

He certainly has a tough job on his hands. Lazaridis, who founded the company while a senior at the University of Waterloo in Canada, believes that Heins is the right guy at this time. That remains to be seen.

Posted-In: News Management Tech Best of Benzinga


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