RIM head acknowledges weakness at investor meeting – Mobile World Live

RIM head acknowledges weakness at investor meeting

11 JUL 2012

Thorsten Heins, president and CEO of troubled BlackBerry-maker RIM, yesterday told shareholders that “I am not satisfied with the performance of the company over the past year”, as he talked through his efforts to transform it into “the real nimble, lean, mean hunting machine that I want RIM to be”.

Noting support from investors, Heins (pictured) said: “we understand that it is not unanimous. We recognise that this is a difficult period for our shareholders, and that many of you are frustrated with the time it is taking to make our way through this transition”.

Addressing the company’s annual shareholder meeting, the executive said that RIM is “pursuing a plan that ensures the BlackBerry 10 platform gets launched, and we are running in parallel a comprehensive review of RIM’s operational and strategic opportunities”.

Heins acknowledged that the company’s most recent results showed “a disappointing quarter following a difficult year,” with weakness in markets such as the US, Canada and the UK reflecting “the competitive nature of the global smartphone market and the impact associated with the platform and product transition we are going through right now”.

With regard to the recently announced delays to the BlackBerry 10 platform, he said that “I will not deliver a product or platform to market that is not ready to meet the needs of our customers or provide anything less than an outstanding user experience with the quality I expect the BlackBerry platform to have. As I have said before, there will be no compromise on this issue”.

The executive also said that many of its operator partners “actually prefer a Q1 [2013] launch, as many of the new LTE networks will be operating by this point”. With regard to operator sentiment toward the new OS, he noted: “In all of the discussions I am having with major CEOs from carriers and the major executive management of carriers, they all embrace BlackBerry, because we have an installed base with them, they want to protect this installed base, and they want to grow this installed base.”

Stating that RIM “owns the physical QWERTY keypad experience” on mobile devices, Heins confirmed that a BlackBerry 10-powered device with keypad will follow “immediately” after the launch of the first, touch-screen unit, slated for early in 2013. He acknowledged that RIM is currently “not as competitive in the full touch segment”, meaning the company has lost out to rival devices powered by iOS and Android, coupled with the growth of “bring your own device” in the enterprise.

In the meantime, the company is looking to “aggressively” drive sales of smartphones using its legacy BlackBerry 7 platform, with a focus on upgrading existing BlackBerry users and driving subscriber growth in fast-growing markets – but this strategy “will come at a cost”. It will “increase average selling price pressure, and pressure also on our monthly service revenue fees”.

Heins also said that RIM is planning to streamline its handset portfolio, focusing on having a smaller number of devices in the market at one time. This will enable it to reduce its development costs and marketing complexity, while increasing economies of scale.

With BlackBerry 10 targeting the “premium smartphone segment” at least initially, BlackBerry 7 will live on to address the entry level and mid-tier, until BB10 works its way through the portfolio.

While Heins said that the company is looking to develop its BBM platform to add features such as video chat, previously reported suggestions that it may be opened to third parties were played down. “We want to build on that strength, and we don’t want to share that strength. We believe this is something that is very unique to us, that is very, very strong in our portfolio, and we want to use this to build a BlackBerry-driven social networking platform”, he said.

Discussing the company’s CORE cost reduction programme, he said that this is “designed to bring cultural change to how we do things at RIM, which we believe will benefit the company for years to come”. Describing the planned 5,000 job cuts as “an incredibly difficult decision to make”, he said that this is “critical for our future”.

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Steve Costello

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