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BlackBerry maker co-CEOs step down
Question of the Day
TORONTO (AP) - The new chief executive of Research in Motion said Monday that drastic change is not needed, following the departure of Jim Balsillie and Mike Lazaridis, who stepped down as co-CEOs and co-chairmen.
But as Thorsten Heins takes over as CEO, the once iconic maker of the BlackBerry smartphone faces some of the most difficult challenges in its history.
The Canadian company turned the smartphone into a ubiquitous device that many couldn’t live without, but U.S. Blackberry users have moved on to flashier touch-screen phones such as Apple’s iPhone and various competing models that run Google’s Android software.
RIM’s U.S. market share of smartphones declined from 44 percent in 2009 to 10 percent in 2011, according to market researcher NPD Group. The company still has 75 million active subscribers, but many analysts believe the company will lose market share internationally as it has in the U.S.
Heins, a little known chief operating officer who joined RIM four years ago from Siemens AG, replaces RIM’s founders after the company has lost tens of billions in market value. Balsillie acknowledged in December that the last few quarters have been among the most challenging times the company has seen.
Even so, Heins said on a conference call on Monday that he didn’t think significant change was needed. He said the leadership change was not a “seismic” event. Heins said he’s committed to switching the company’s phones over to a new operating system, which is expected late this year. That’s the same plan favored by Lazaridis and Balsillie, who announced Sunday they would step down from the top jobs, but serve in other roles.
“I want us to have a bit more of an ear towards the consumer market, understand trends, and not just do what the Street is telling you,” Heins said.
Shares of RIM fell 5.8 percent, or 99 cents to $16.01, following his remarks. The stock had initially moved up almost 4 percent in premarket trading.
Vic Alboini, president of Jaguar Financial Corp. in Toronto, which has been pushing for a change in leadership, said the drop in stock price on Monday meant the market saw the leadership adjustment as “more of the same.”
Many shareholders and analysts have said a change or sale of the company has been needed, but the sudden departure of the two founders from their top jobs wasn’t expected despite their promises that they would examine the co-CEO and co-chairmen structure.
Balsillie and Lazaridis have long been celebrated as Canadian heroes, even appearing in the country’s citizenship guide for new immigrants as models of success. They headed Waterloo, Ontario-based RIM together for the past two decades.
“There comes a time in the growth of every successful company when the founders recognize 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,” Lazaridis said in a statement.
Lazaridis will take on a new role as vice chairman of RIM’s board and chairman of the board’s new innovation committee. Balsillie remains a member of the board. The two remain two of RIM’s biggest shareholders.
“I agree this is the right time to pass the baton to new leadership, and I have complete confidence in Thorsten, the management team and the company,” Balsillie said in the statement. “I remain a significant shareholder and a director and, of course, they will have my full support.”
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