Thorsten Heins takes over as CEO and president at RIM

RIM has appointed a new CEO after increasing shareholder pressure and a poor financial performance in 2011. Thorsten Heins will take over as president and CEO, with former co-CEOs Mike Lazaridis and Jim Balsillie stepping down. Lazaridis will become vice chair of RIM’s board and chair of its new Innovation Committee and Balsillie will remain a member of the Board.

According to RIM, the appointment was made on the recommendation of Lazaridis and Balsillie, who had submitted a succession plan to the Board. The Board acted after conducting its own due diligence and the appointments are effective immediately.

“There comes a time in the growth of every successful company when the founders recognise the need to pass the baton to new leadership,” said Lazaridis. “Jim and I went to the Board and told them that we thought that time was now.  With BlackBerry 7 now out, PlayBook 2.0 shipping in February and BlackBerry 10 expected to ship later this year, the company is entering a new phase, and we felt it was time for a new leader to take it through that phase and beyond.  Jim, the Board and I all agreed that leader should be Thorsten Heins.”

Heins joined RIM from Siemens Communications Group in December 2007 as senior vice president for hardware engineering and became COO for product and sales in August 2011

“It is Mike and Jim’s continued unwillingness to sacrifice long-term value for short-term gain which has made RIM the great company that it is today,” he said. “I share that philosophy and am very excited about the company’s future.”

Heins said that RIM has a strong foundation on which to build. He said the Canadian Blackberry-maker has a strong balance sheet with approximately $1.5bn in cash at the end of the last quarter and negligible debt, and he reiterated that the company reported revenue of $5.2bn in its last quarter, up 24 per cent from the prior quarter.

“RIM earned its reputation by focusing relentlessly on the customer and delivering unique mobile communications solutions. We intend to build on this heritage to expand BlackBerry’s leadership position,” said Heins.

“As with any company that has grown as fast as we have, there have been inevitable growing pains. We have learned from those challenges and, I believe, we have and will become a stronger company as a result. Going forward, we will continue to focus both on short-term and long-term growth, strategic planning, a customer- and market-based product approach, and flawless execution. We are in the process of recruiting a new chief marketing officer to work closely with our product and sales teams to deliver the most compelling products and services.”

The new CEO has an uphill struggle ahead of him with stakeholders and observers alike expressing concern at the Canadian firm’s plight in 2011. Last year, a major shareholder in RIM, Jaguar Financial, called for the company to undertake a value maximisation process that could involve selling the firm. At the time, Jaguar chairman and CEO Vic Alboini said: “The status quo is not acceptable. It is time for transformational change. The directors need to seize the reins to maximise shareholder value before more market value is lost.”

Speaking to Telecoms.com last month, Bengt Nordström, CEO and president at consultancy Northstream, voiced his opinion that 2012 would be a very tough year for RIM.

“Sometimes when you’re pushing a certain concept, as RIM was pioneering smartphones with the BlackBerry – and then you miss the boat on touchscreens and the software around it – it almost becomes too late,” he said.

“One of its biggest challenges is how they make the BlackBerry app range compelling. In truth, they need to be successful with their efforts to support Android apps.”

David McQueen, principal analyst at Informa Telecoms & Media, advised that RIM should start over again with a clean slate.

“It’s almost worth them starting again and figuring out what they want to achieve; a bit like Motorola did and like Sony are starting to do now and Nokia did with Microsoft – start again.”

“Too many other companies are taking over. The key differentiators that they had: security, enterprise focus and the BBM platform, all are starting to be eroded, and now there are tools such as iMessage and What’s App, for example. Security is still an issue they can compete on but Samsung with Android are working on improving security in their devices and that just leaves expertise on the enterprise market; and they’re starting to lose all of that as well.”

Last week it was rumoured that Barbara Stymiest, who formerly served as a member of Royal Bank of Canada’s Group Executive and has been a member of RIM’s Board since 2007, would be appointed as the new CEO. However, she has been named the independent Board Chair.

Speaking on behalf of the Board, Stymiest said:  “We believe that Thorsten is the right executive to succeed Mike and Jim.  He has 27 years of telecommunications experience, including four years at RIM in senior management positions.  As a Board, we have been impressed with his outstanding management skills, his leadership and his accomplishments within the company.”

The PlayBook gets some much needed updates

Using Las Vegas gadget-fest CES as a platform to rally some support, Canadian manufacturer Research In Motion (RIM) is showing off the latest versions of its flagship operating systems for both smartphone and tablet devices.

The struggling PlayBook tablet is to get a software overhaul with OS version 2.0, due out in February. The much requested native email application will finally make an appearance, alongside deeper integration with social networking tools and address book.

The company is also hoping OS 2.0 enhancements will help drive developer interest, boosting the device’s flagging app store.

On the handset side, BlackBerry OS 7.1 delivers enhanced sharing functionality, with the addition of NFC-focused updates such as BlackBerry Tag; an update for the popular BBM messaging service; and mobile hotspot functionality via tethering.

BlackBerry 7.1 will begin rolling out this week, while new native app releases of BBM, BlackBerry Traffic and BlackBerry Travel will be available on BlackBerry App World from today.

Current RIM co-CEOs and chairmen Mike Lazaridis and Jim Balsillie

RIM could soon split the roles of CEO and chairman in a bid to reverse its fortunes. Mike Lazaridis and Jim Balsillie are currently co-CEOs and co-chairmen at the embattled Canadian handset manufacturer, but that could change following an internal review of its board structure.

The two could be ousted from their co-chairmen roles by Barbara Stymiest, an independent director who joined RIM’s board in 2007. She is reported to be the leading candidate to replace Balsillie and Lazaridis according to Canadian newspaper Financial Post, which cited “sources familiar with events”.

The Blackberry maker had agreed to the internal review last year in order to avoid a shareholder revolt, after a troublesome 2011, in which the firm saw its net income sink by almost three quarters to just $265m in the third quarter of 2011. The firm was also forced to announce that its BlackBerry 10 devices will be delayed until the latter part of 2012, rather than the first quarter of the year, as was originally planned, and a high profile outage in October saw millions of BlackBerry users around the world experience a service disruption, preventing them from using the browser or BBM messaging platform.

RIM also announced that it will lay off 2,000 staff as part of the cost-cutting programme and one shareholder, Jaguar Financial, a Canadian merchant bank that holds shares in the firm, twice called on the firm to undergo a shake-up, even suggesting that it should be acquired by another company.

The year was so forgettable that co-CEOs Lazaridis and Jim Balsillie announced that they will pay themselves salaries of just $1 each, seemingly in an admission of a poor performance throughout the year.

Nick Dillon, analyst at Ovum, believes that regardless of the outcome of the internal review, the Blackberry maker will need to make major changes in 2012 in order to keep pace with competitors.

“Whether RIM decides to change its management team or not, what is clear is that the company needs to accelerate its pace of change, both in bringing its new BlackBerry 10 platform to market, but also in increasing the attractiveness of its offering through new services such as BBM Music,” he said. ”If the company is unable to speed up its technology and product development it risks being left further behind by its rivals.” 

The internal review is due to be completed by the end of January 2012, and a decision will be announced by the end of February.

RIM is carrying its troubles on into 2012

Beleaguered Blackberry maker RIM reported more bad news as the firm saw its net income sink by almost three quarters to just $265m in the third quarter of 2011.

The figure is a 71 per cent drop from the $911m it recorded in 3Q10, and was impacted in large part by a $485m pre-tax charge related to unsold PlayBook tablets.

The firm reported revenue of $5.17bn for the quarter, down $326m from the corresponding quarter in 2010, but a 24 per cent increase on the $4.17bn it saw in Q2 this year.

According to news wire reports, RIM’s co-CEOs also admitted that new devices that will run on its BlackBerry 10 operating system will be delayed until the “later part of 2012”, rather than the first quarter of the year, as was originally planned.

Co-CEO Mike Lazaridis said that the products will be delayed as the company wants to improve the battery life and the performance of its products before releasing them into the market. He explained that the chipsets that can enable this will not be available until mid 2012.

The news comes at the end of a forgettable 2011 for the Canadian firm, which was so bad that co-CEOs Lazaridis and Jim Balsillie announced that they will pay themselves salaries of just $1 each, as a gesture to investors.

The firm’s second quarter profits in 2011 slid to less than half of what it generated in the first quarter, and to a little over 40 per cent of what it made in the same quarter last year. In addition, a high profile outage in October saw millions of BlackBerry users around the world experience a service disruption, preventing them from using the browser or BBM messaging platform.

The firm also announced this year that it will lay off 2,000 staff as part of the cost-cutting programme and one shareholder, Jaguar Financial, a Canadian merchant bank that holds shares in the firm, has now twice called on the firm to begin a “value maximisation process”, which may include the sale of the firm.

The Playbook is not moving as fast as expected

Canadian device vendor Research In Motion (RIM) has warned shareholders that it has a large inventory of Playbook tablets sitting in its channels at the moment, amounting to a provision for this quarter of around $360m.

Speaking at the end of last week, Mike Lazaridis, co-CEO of RIM, said that “an increase in promotional activity is required to drive sell-through to end customers.” Not an enviable position to be in during what is traditionally the most lucrative quarter of the year.

RIM said it sold approximately 150,000 PlayBook tablets into the channel in the third quarter and believes sell-through to end customers was higher than this amount. Yet the company isn’t shifting its stock as fast as it would like.

“RIM is committed to the BlackBerry PlayBook and believes the tablet market is still in its infancy. Although a number of factors have led to the need for an inventory provision in the third quarter, we believe the PlayBook, which will be further enhanced with the upcoming PlayBook OS 2.0 software, is a compelling tablet for consumers that also offers unique security and manageability features for the enterprise,” said Lazaridis.

While the company is still in the process of finalising its third quarter financial results, it said it shipped approximately 14.1 million BlackBerry smartphones in the third quarter ended November 26.

A further charge of around $50m will also be levelled against company revues for this quarter, related to the recent service outage, meaning RIM will likely miss its targets.

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RIM is rolling out its BBM Music service into the UK

Canadian handset vendor RIM has announced that it is rolling out its BBM Music service on a commercial basis following a successful beta trial.

BBM Music is a cloud-based social music service which allows users to discover and share songs from the likes of Universal, Sony, Warner and EMI with BBM contacts. The size of the music library continues to grow as new friends join the community.

The service was launched in Canada, the US and Australia earlier this month and is set to be launched in the UK Tuesday, for a monthly subscription of £4.99.

“More than 45 million customers already love the social communication benefits delivered through BBM and we are thrilled to be extending the experience into a uniquely social and interactive music service,” said Mike Lazaridis, President and Co-CEO at RIM.

“We have partnered with leading music companies to provide a ‘full track’ music sharing and discovery experience that will provide users with quality music on demand and allow them to connect with friends on a whole new level.”

Omnifone, a premier cloud music service provider, is providing RIM with a back-end solution for the BBM Music service that provides content management, music hosting and reporting functions. The back-end solution helps facilitate the delivery of a full music catalog to BBM Music users and comprehensive compensation reporting for copyright holders.

RIM has added New Bay to its acquisitions in 2011

Canadian devices firm RIM has announced its acquisition of digital content services provider NewBay, the BlackBerry maker’s fifth acquisition of 2011.

The firm has already acquired cloud-based video editing services provider JayCut, mobile social gaming firm Scoreloop, cloud-based calendar and scheduling services provider Tungle.me and contacts management startup Gist, this year.

“Today we are pleased to announce that NewBay has joined Research In Motion (RIM). We’re excited that the NewBay team will be bringing their expertise in cloud-based digital content services to the BlackBerry platform,” said Alan Brenner, SVP, BlackBerry platform on the company’s blog.

“NewBay’s LifeCache platform helps enable operators and device makers to deliver content across multiple, connected devices such as mobile phones, PCs and tablets.”

The company is battling to win back customer trust after a high profile outage earlier this month, but has recently announced it will be delaying the launch of the next version of its PlayBook OS.

The next update to the PlayBook's operating system has been delayed until February 2012

Research in Motion (RIM) has announced that it will delay the next version of its PlayBook operating system until February next year.

The BlackBerry maker said it will not launch the PlayBook OS 2.0 until it is confident it has fully met the expectations of its developers, enterprise customers and end-users.

The firm also said it has decided to delay its PlayBook BBM application until the next PlayBook OS release and said it is still working on developing a seamless BBM solution that fully delivers push based messaging capabilities.

The company added that it will be providing developers with the gold release of the native SDK for the BlackBerry PlayBook tablet. The developer beta allows developers to begin porting their native apps to the PlayBook platform. RIM expects that the beta will generate thousands of new applications for BlackBerry PlayBook OS 2.0.

RIM will also be starting a series of closed betas of BlackBerry PlayBook OS 2.0 with select enterprise customers from its early adopter programme.

“These betas will be rolled out over the course of this year and are an important next step to bringing our unmatched enterprise app deployment, device manageability, security and email integration capabilities to the tablet category,” said David J. Smith, SVP, BlackBerry PlayBook, RIM.

“The betas will be conducted within global enterprise environments and will test the BlackBerry PlayBook tablet solution from end-to-end within corporate IT infrastructures. Feedback and improvements from these betas will benefit the overall BlackBerry PlayBook customer experience.”

The new BBX platform borrows from the QNX platform, previously seen in RIM's PlayBook

Research In Motion (RIM) has unveiled its new BlackBerry BBX mobile platform; a hybrid of the BlackBerry platform and the QNX operating system that the firm uses in its tablet offering, the PlayBook.

The BBX platform has been designed from the ground up, said RIM, and the BBX operating system will support BlackBerry cloud services and development environments for both HTML5 and native developers.

It will also support applications developed using any of the tools available today for the BlackBerry PlayBook, such as the Native Software Developer Kit, Adobe AIR and Flash and WebWorks/HTML5. It will also run BlackBerry Runtime for Android Apps, meaning BlackBerry users will be able to use Android apps on their handsets.

At its BlackBerry Developer Conference, RIM also said that BBX will also include the new BlackBerry Cascades UI Framework for advanced graphics, and bring “Super App” capabilities to enable many advanced capabilities including deep integration between apps, always-on Push services and the BBM Social Platform.

According to RIM, the BBX platform will be used for smartphones as well as tablets, although at the DevCon event at San Francisco, the company also unveiled the Developer Beta version of the BlackBerry PlayBook OS 2.0.

The Developer Beta includes the BlackBerry Runtime for Android Apps and the BlackBerry Plug-In for Android Development Tools (ADT), allowing developers to bring Android applications to BlackBerry PlayBook tablets.

“With BBX, RIM is rebuilding the foundation for all its devices, including the iconic handhelds, and BBX begins to show some real promise in that sphere, with potential for a much more powerful, immersive and media friendly platform,” said Ovum chief analyst Jan Dawson.

“However, the adoption of QNX across the entire line in the coming months and years also means that RIM is leaving its traditional BlackBerry developers high and dry. In fact, it’s arguably providing better support for existing Android developers than it is for existing BlackBerry Java developers, as it seeks to drive up the number of apps on the platform rapidly. There simply is no migration path for existing developers, short of starting from scratch with an entirely new development environment.

RIM also announced the availability of the Native SDK for the BlackBerry PlayBook in San Francisco. The Native SDK allows developers to build high-performance, multi-threaded, native C and C++ applications and enables developers to create advanced 2D and 3D games and other apps with access to OpenGL ES 2.0 and Open AL, as well as device specific APIs.

Applications developed with the Native SDK will run on the BlackBerry PlayBook and will be forwardly compatible on BBX-based  tablets and smartphones, RIM said.

Dawson commented: “ The range of options for development, including those already announced, will be appealing to developers, but they only respond to part of the challenge for developers. The main challenge remains giving developers an audience and a market for their applications, which doesn’t exist today in the case of BBX. As long as it remains a tablet-only operating system, developer appeal will be limited, and with BBX-based handhelds some time off still, many developers won’t feel a pressing need to develop for BBX in the near term.

“In the meantime, the platform risks suffering from the same chicken and egg problem as many others – users won’t buy a device without any apps, and developers won’t develop for a platform without any users.”

UK MD Stephen Bates says RIM is working hard to win back the trust of its customers

Embattled BlackBerry vendor RIM is confident that it can win back the trust of its customers following last week’s high profile outage. Stephen Bates, RIM’s UK MD told Telecoms.com on Tuesday that the firm will continue to innovate as it looks to make amends for the outage.

“The feedback that we get from customers is that they look to BlackBerry to continue to deliver what they expect, which is a reliable, secure, real-time service that gives us differentiation from the other companies out there.”

He added that the intense competition in the smartphone and tablet space keeps the companies in the industry “fresh and innovative”, but insists that the company is not being complacent and realises it has a huge task on its hands to restore its reputation.

“Every day we take the view that we have to prove ourselves to our customers and today’s no different than before,” said Bates.

“Previously, up until this point, we’ve had amazing reliability – of about 99.97 per cent which is phenomenal for infrastructure.”

“Our focus will be to continue to deliver the best communicaitions experience we can and our infrastructure is a key element of that, to ensure that we not only get that service back to how it was, but that we also work towards building back the trust of our customers on the reliability of what we offer.”

Bates explained that the outage was originally caused by a core switching system failure – this was a failure of an entire system rather than one physical node at a particular location.

The reason that the outage was so widespread and lasted so long is that, normally in such instances, the system would back up to the redundant system, but on this occasion it didn’t work as it previously had, or as tested.

“The RIM infrastructure is quite complex and carries over 22 Petabytes of data per month – so there’s a lot of data to cope with. And the problem is that this was an intermittent fault, so it took a while to figure out what was really happening.  Then, later, we had another challenge which was that there’s a huge backlog of traffic that that to be cleared.”

He added that the reason that it took so long to fix, and even to alert customers of the outage, was because it came as part of the worst outage of RIM’s history and “the scale of it caught the company by surprise”.

RIM is seeking to reimburse customers by offering a selection of premium paid-for apps available to them free of charge. The apps will be available from tomorrow and the offer will run until Christmas.

While that compensation is primarily for the consumer market, business customers that already pay for BlackBerry technical support, will receive an additional month of support free of charge. Also, business customers that do not currently subscribe to the technical support will receive a free one month trial as well.

Bates added that although some operators, such as UAE-based Etisalat and Du, are offering financial compensation to BlackBerry users for the outage, RIM is not relying on its carrier partners to reimburse users and believes the compensation it is currently offering is sufficient.

“This is a problem for BlackBerry rather than our carrier partners, so we’re trying to ensure people go to the BlackBerry website and BlackBerry Twitter and Facebook page for updates,” said Bates.

“We’re not asking carriers to do anything – we believe in the approach that we’re taking; to provide our customers either access to free apps or access to BlackBerry technical support to our business customers.”

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