Is It Too Late to Save RIM?

New CEO Thorsten Heins faces a Herculean task in trying to make the smartphone maker relevant again.

New Research In Motion CEO Thorsten Heins has a small window of opportunity to resuscitate the long-stumbling smartphone maker.

Analysts and industry partners think Heins, promoted to lead the company late last month, may have only until December to prove his mettle. By then, they say, he must get new BlackBerry 10 smartphones out the door and also get sales off to a good start for the Playbook 2 tablet, which is slated to start shipping next month.

"The execution is what has to be done. [Heins] has to keep the trains running on time," said Rick Segal, CEO of Fixmo, a provider of risk management software for BlackBerry, Apple iOS and Android smartphones.

"If there's no movement in 24 months, he's toast. In fact, if they miss Christmas [2012 product rollouts], that will be ugly," Segal added.

Heins, who joined RIM in 2007 as senior vice president of hardware engineering and was later named COO, takes over at a time when the smartphone pioneer is suffering a steep decline in its share of the market it helped create. Business users and consumers are increasingly favoring Apple's popular iPhone and the numerous devices running the Google-developed open-source Android operating system over RIM's once-dominant BlackBerry models.

RIM's longtime strategy of focusing on business users has been hit hard by the growing trend of people using personal devices for work-related tasks.

The Waterloo, Ont., company's piece of the smartphone pie has declined steadily in recent years, especially in the important U.S. market, where it has seen its share plunge from 24% in the third quarter of 2010 to just 9% a year later.

Some analysts also note that RIM's reputation has suffered in the wake of multiple service outages, including one last fall that hit BlackBerry users in most of the world. Moreover, analysts contend that the company has also been hurt in recent years by widespread criticism of co-CEOs Mike Lazaridis and Jim Balsillie, both of whom were replaced by Heins.

Heins said his priorities are to hire a new chief marketing officer to sharpen RIM's image, and to change its product development strategy. "We need to be more marketing-driven, and we need to be more consumer-oriented because that is where a lot of our growth is coming from," he said shortly after his appointment.

On the development side, the company will place more emphasis on prototyping and rely less on its current practice of innovating while developing products.

"Changing the CEO in and of itself will not turn things around," said Jack Gold, an analyst at J.Gold Associates. "RIM also needs to get the new BlackBerry 10 OS out as a quickly as possible -- and make sure it shines."

Gold added that it's important for critics to remember that RIM is "not doing badly in many parts of the world," and is still making money.

In its most recent fiscal quarter, which ended Nov. 26, the company reported a profit of $265 million -- but that was down 71% from that same period a year earlier. Sales in the quarter slipped 6% to $5.2 billion.

"They are not falling into obscurity," Gold said. "At the end of the day, it will be about execution."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.

Ribeiro is a reporter for the IDG News Service. Mikael Ricknais of the IDG News Service contributed to this story.

This version of this story was originally published in Computerworld's print edition. It was adapted from an article that appeared earlier on Computerworld.com.

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