RIM and Blackberry on the edge under new CEO
LONDON Jan 23 (Reuters) - Takeover talk swirled around Research In Motion on Monday as investors and analysts pondered whether new Chief Executive Thorsten Heins had been appointed to lead a turnaround of the struggling phonemaker or prepare it for sale.
Heins, who joined the Canadian company in 2007, took over the top job on Saturday when co-CEOs Mike Lazaridis and Jim Balsillie finally bowed to investor pressure and resigned.
They hand over a firm that has lost market share and market value after being comprehensively outplayed by the likes of Apple and Google. The group looks badly in need of a leader that can rejuvenate both the design and operational sides of the business.
"If there are no meaningful signs of an imminent turnaround then I think the spotlight will turn back on to the assets that RIM holds and who they might be attractive to," CCS Insight analyst Ben Wood told Reuters.
"The annual analyst event in May will now become the focal point to the unveiling of Thorsten's vision. We know the speed with which you make strategic changes and implement them is absolutely critical because the mobile phone business will not stand still."
On the surface, the former Siemens AG executive appeared to suggest he would stick to the current strategy, but analysts expect that to change in the coming months.
RIM's existing product lineup has struggled to compete with Apple's iPhone and iPad and the slew of large-screen and powerful devices from Samsung and other manufacturers using Google's Android operating system.
First on the agenda will be a need to improve execution, with a particular focus in North America where RIM has haemorrhaged market share after a year marked by product delays and a botched launch of its PlayBook tablet.
"It takes nine months for a product to get to market once you have thought about what you want to do," Gartner analyst Carolina Milanesi told Reuters. "They are looking at at least a year from a transitional perspective.
"Picking Thorsten is a sign that they haven't quite decided that (a sale is what) they want to do, so they might give it yet another shot at looking at the business and trying to come back".
As the window for a turnaround closes, the clamour from shareholders for the company to license its technology to third parties or even sell the business has got louder.
Investors have seized on any rumour of a deal, whether with Amazon as reported by Reuters in December or with Samsung last week, as reason to celebrate.
RIM's U.S.-listed shares climbed 4.1 percent to $17.69 in premarket trade on Monday.
NOKIA IN THE FRAME
Analysts have said that logical buyers for RIM also include fellow-struggler Nokia, perhaps with support from Microsoft, and Facebook which is increasingly pushing its content to users via their mobile phones.
If there is no obvious buyer, Heins does have more immediate options to add value to the business.
Heins says his most immediate concern was to sell RIM's current lineup of BlackBerry 7 touchscreen devices, deliver on a promised software upgrade for its PlayBook tablet computer by February, and rally RIM's troops to launch the next-generation BlackBerry 10 phones later this year.
In the longer term, Heins, previously one of RIM's chief operating officers, said he would push for more rigorous product development and place greater emphasis on executing on the company's marketing and development plans.
RIM could also license its software or integrate its email package, a strategy that many analysts and investors have thought the company might pursue. Heins said it would be wrong to focus on that option but said he would be open to discussions of that nature.
The analysts also welcomed the fact that Lazaridis was staying with the company, as the shift ends the two-decade long partnership of Lazaridis and Balsillie atop the once pioneering technology company.
The pair together built Lazaridis' 1985 start-up into a global business. Both men, also two of RIM's three largest shareholders with more than 5 percent each, will remain board members while Lazaridis will stay on as the head of a newly created innovation committee.
"RIM have had big challenges in the past and they succeeded in moving from a corporate product to be also a consumer product, to get a foot in the consumer market and very few people expected them to do that," Consultant John Strand said.
"Now they have to reinvent themselves again."