First, the fire control: RIM is not leaving the consumer sector—at least not entirely, and not yet. It is, however, rethinking many parts of its business, three executives resigned, and fourth quarter numbers? Not so good. It was a very painful report and investor call, but it has a few highlights.
The biggest bright spot out of Thursday’s call is the fact that RIM finally looks ready to do whatever is necessary. “It is now very clear to me that substantial change is what RIM needs,” said Heins. There was hardly an option that wasn’t mentioned—even selling the company wasn’t rejected outright, but it “is not the main direction we are pursuing right now.” “This company needs to learn to partner,” Heins said. “We can’t do everything ourselves, but we can do what we are good at.”
The least you need to know about the call—which lasted for nearly an hour—is that RIM will be making some major partnerships in the near future, possibly including contracted media app developers, OS licensing, and hardware licensing/outsourcing. RIM will also be offering a new line of heavily subsidized low-end BlackBerry 7 phones, and will be shifting its focus back on the enterprise sector. Note that this is not the same as leaving the private sector
“We plan to refocus on the enterprise business and capitalize on our leading position in this segment. RIM was late to the bring-your-own-device movement and we saw significant slowing down in our enterprise subscriber growth rate as a result. I am committed with my team to reclaiming lost market share in this space…”
While RIM’s stock is up as of closing Friday—indicating that Thursday’s announcements and changes were things investors agree with—RIM’s immediate outlook still appears bleak. Jim Balsillie co-founder and—until this year—co-CEO of RIM has stepped down from his position on the board of directors yesterday, perhaps to give current CEO Thorsten Heins a little more breathing room to lead as he pleases.
“As I complete my retirement from RIM, I’m grateful for this remarkable experience and for the opportunity to have worked with outstanding professionals who helped turn a Canadian idea into a global success” –Jim Basillie
Depending on your point of view, Balsillie’s departure can be either really good or really bad—I’d say really good at this point. Software CTO David Yach, and Jim Rowan, Global Operations COO are also both out, and time will show the pros and cons of those losses. But the monetary news out of RIM’s Q4 report isn’t so debatable. It’s definitely bad. RIM’s revenue is down 25% to $4.19 billion, with $125 million worth of negative profits in the final quarter of last year.
That was not the financial report I’d want to hear, but investors heard something they liked because RIM’s stock is up over 7% since the announcement. Given the staff changes, a willingness to consider all options on the table, and a commitment to focusing on its strengths, I’d say RIM’s outlook is better than it has been in some time.
RIM made its billions focusing on the enterprise sector, and reliable, durable, functional, and secure devices are still needed there—especially overseas in places where the bring-your-own-device and Android movements haven’t gained as much traction. As far as RIM’s future in the US goes, I don’t know what to say. I fully expect to see BlackBerry 10 on carrier shelves later this year, but I wouldn’t be surprised to see RIM exit the US retail consumer market by the time its next OS version rolls around.