Taste for Apple sours BlackBerry

It is the addictive email phone that became a must-have for high-flying executives. But service outages and failure to keep up with the iPhone mean BlackBerry’s popularity is waning and its creators have paid the price.

Mike Lazaridis and Jim Balsillie have stepped down as co-chief executives and co-chairs of Research in Motion (RIM), the Canadian company they brought to international prominence by inventing the first successful smartphone, years before Apple appeared on the telecoms stage.

Hoping to pacify investors horrified by the 88% decline in RIM’s share price since its $148 peak in June 2008, the board has named long-serving chief operating officer and former Siemens employee Thorsten Heins as chief executive.

“As with any company that has grown as fast as we have, there have been inevitable growing pains,” said Heins in a statement. “We have learned from those challenges and, I believe, we have and will become a stronger company as a result.”

Barbara Stymiest, a previous head of the Toronto Stock Exchange and a RIM board member since 2007, has stepped into the chair. Lazaridis remains as vice-chairperson and Balsillie will retain a seat on the board but relinquish all management responsibilities.

The shake-up failed to allay Wall Street concerns, with the shares down 7% earlier this week to $16 and one activist investor describing the new structure as a “transitional move”.

“The worst thing that you can do in putting an albatross around the neck of the new chief executive is to put the former chief executives on the board,” said Vic Alboini, whose Jaguar Financial investment fund has led calls for a break-up of RIM. Apple and Samsung, the South Korean electronics giant, have been reported as taking an interest.

“My bet would be there is a new chief executive brought in from outside. This to me is a transitional move. Shareholders are not going to have a lot of patience if results don’t start to sparkle,” said Alboini.

He urged Lazaridis and Balsillie to leave the board, with Roger Martin, a dean at the University of Toronto, and John Richardson, who has been replaced by Stymiest as lead independent director. Heins has been with the company for five years, overseeing its handsets and more recently hardware and software engineering.

In that time RIM has been beset by delays and product misfires. Conscious of the need to produce a faster touchscreen to keep up with the iPhone and Android models, the BlackBerry range was due to upgrade to a new operating system called QNX in the first quarter of 2012. The launch has been delayed until the end of 2012.

RIM’s tablet, the PlayBook, billed by Balsillie as “the most significant development for RIM since the launch of the first BlackBerry”, has shipped just 900 000 units at the last count since its launch. By comparison, more than 50-million iPads are estimated to have been sold since its launch in 2010.

“Heins is a product execution guy, he’s not a visionary,” said Morgan Stanley analyst Ehud Gelblum. “Heins has to give people a reason why they need a BlackBerry. It’s going to be very difficult for him.”

Heins told analysts RIM needed to engage more with consumers and its core business users. He is recruiting a chief marketing officer to promote the brand. “We innovated while we were developing the product and this needs to stop,” he said. “Execution has to be really precise.”

With a product once so addictive it became known as the “CrackBerry”, RIM has proved itself capable of reinvention but on a limited scale. Its BlackBerry messenger service has been widely adopted by British teenagers and its role in helping to organise last year’s looting earned the handset a new nickname — the “riotphone”.

In a statement Lazaridis said: “There comes a time in the growth of every successful company when the founders recognise the need to pass the baton to new leadership. Jim and I went to the board and told them that we thought that time was now.” —

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Advertisting

Stella set to retain her perks

Communication minister will keep Cabinet perks during her two months of special leave

Not a sweet deal, Mister

Mister Sweet workers say they will not risk their health, and the lives of others, to continue producing and packaging confectionaries

Covid-19 grounds Nigeria’s medical tourists

The country’s elites, including the president, travelled abroad for treatment but now they must use the country’s neglected health system

Nehawu launches urgent court bid over protective gear for health...

The health workers’ union says the government has rebuffed its attempts to meet about mitigating risks to workers

Press Releases

Rahima Moosa Hospital nursing college introduces no-touch facial recognition access system

The new system allows the hospital to enrol people’s faces immediately, using artificial intelligence, and integrates easily with existing access control infrastructure, including card readers and biometrics

Everyone’s talking about it. Even Kentucky

Earlier this year South African fried chicken fast-food chain, Chicken Licken®, launched a campaign for their wallet-friendly EasyBucks® meals, based on the idea of ‘Everyone’s talking about it.’

New energy mix on the cards

REI4P already has and will continue to yield thousands of employment opportunities

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world