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RIM CEO Denies That His Company Is In A Death Spiral

To say that BlackBerry maker Research In Motion has been having a tough time lately would be to campaign for the Understatement of the Year Award. The fact is that by pretty much any standard you care...
RIM CEO Denies That His Company Is In A Death Spiral
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  • To say that BlackBerry maker Research In Motion has been having a tough time lately would be to campaign for the Understatement of the Year Award. The fact is that by pretty much any standard you care to use, RIM is in deep trouble. Their market share is dropping steadily toward zero. During their quarterly earnings call last week they announced $518 million in losses, yet another delay for their supposedly life-saving BlackBerry 10 platform, and a plan to cut 5,000 of the company’s 16,500 jobs. This is not a company that’s in anything remotely resembling good shape.

    Yet CEO Thorsten Heins, who replaced former co-CEOs Jim Balsillie and Mike Lazaridis in January, insists that the company will navigate its troubled waters and come out successful on the other side. In fact, he told a local Toronto radio show, CBC’s Metro Morning, that “There’s nothing wrong with the company as it exists right now.” Now, before you think that Heins has taken leave of his senses, he went on to elaborate: “I’m not talking about the company as I, kind of, took it over six months ago. I’m talking about the company [in the] state it’s in right now.” In other words, while RIM might’ve been a mess when Heins came on the job in January, it’s in better shape now.

    That’s probably true enough. No doubt there were some significant internal issues in place at RIM that needed to be addressed, and Heins seems like the kind of person who could address those issues effectively. He went on to deny, though, that RIM is “in a death spiral.” That’s a much tougher sell. While Heins may have done a lot in the last six months to fix what was wrong with RIM, it isn’t at all clear that it will be enough. Sometimes patching the holes in the hull of a boat means the boat stays afloat. Sometimes, though, it’s already taken on too much water, and all you’re doing is delaying the inevitable. Heins clearly understands that RIM is in trouble – “challenged” is the word he uses. But he sees RIM as a company “in the middle of a transition,” and he remains “positive we will emerge successfully from that transition.”

    He may well be right about that. Provided that RIM can stay afloat until the BlackBerry 10 launch, and provided BlackBerry 10 performs well (very, very well), then RIM may yet navigate its troubled waters successfully. At this point, though, the odds of that look pretty long.

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