Thorsten Heins takes over as RIM's CEO

Research In Motion's co-CEOs Mike Lazaridis and Jim Balsillie step aside as company unveils succession plan

Research In Motion's co-CEOs Mike Lazaridis and Jim Balsillie have quit after a tumultuous period at the company, which saw intense competition and long services outage at the maker of the BlackBerry.

Thorsten Heins
Thorsten Heins is the new CEO of Blackberry maker Research in Motion.

An insider, Thorsten Heins, the company's former chief operating officer, has taken charge as president and CEO, to implement the succession plan previously submitted to the board by the former co-CEOs, RIM said in a statement late Sunday.

Lazaridis and Balsillie have also quit their positions as co-chairmen, and director Barbara Stymiest takes over as the new chairman. Lazaridis, a founder of the company, will become vice chairman, and Balsillie will remain a board member.

Lazaridis will also chair a newly created "Innovation Committee". He will work closely with the new CEO to offer strategic counsel, provide a smooth transition and continue to promote the BlackBerry brand worldwide, RIM said.

Heins joined RIM from Siemens Communications Group in December 2007 as senior vice president for hardware engineering and became COO for product and sales in August last year. Lazaridis and Balsillie have been under pressure to quit from investors for some time.

The new CEO did not indicate any immediate change in the direction of the beleaguered Canadian company, which is facing stiff competition both in its smartphones and tablet business from devices running the Android operating system, and Apple's iPhone and iPad products.

"It is Mike and Jim's continued unwillingness to sacrifice long-term value for short-term gain which has made RIM the great company that it is today. I share that philosophy and am very excited about the company's future," Heins said in the statement in a reference to RIM's purchase of QNX Software Systems, whose operating system is positioned to be the basis for BBX, the next platform for RIM's tablet and smartphones.

The company is recruiting a new chief marketing officer to work closely with its product and sales teams to "deliver the most compelling products and services".

RIM saw the share of its BlackBerry drop to 2.9% in the third quarter of 2011, from 3.0% a year earlier, according to research firm Gartner. The BlackBerry operating system had a 11% share of smartphone operating systems, down from 15.4% a year earlier, even as the share of mobile phones running Android doubled. Android gained because of a weaker competitive environment, and the lack of exciting new products on alternating operating systems including RIM's, Gartner said.

A service outage in October that affected users in North America, Latin America, and its EMEIA (Europe, Middle East, India and Africa) region also dented the company's image, despite efforts by the company to placate consumers with free apps worth more than $100. Consumer Law Group, a Canadian law firm, said in October it had filed in the Quebec Superior Court a proposed national class-action lawsuit against RIM in connection with the service outage.

RIM changed the name of BBX to BlackBerry 10 in December after Basis International, a software company in Albuquerque, New Mexico objected to its use of the trademark, and even got an order from a court restraining RIM from using the trademark at a conference in Singapore. The new operating system is expected to ship later this year.

An update to the operating system of its PlayBook tablet called version 2.0 has been delayed, but is now scheduled for February.

The company had shipped only 150,000 units of the tablet in the quarter ended Nov. 26, and said it was recording a pre-tax provision of $485 million, relating to its inventory valuation of PlayBook tablets.

It said it had a high inventory of the product, and needed to increase promotional activity, because of the changed competitive landscape and its delay in releasing Version 2.0 of the PlayBook's operating system. Retailers have been discounting the device.

Lazaridis said that he was so confident in RIM's future after Heins took over that he intended to purchase an additional $50 million of the company's shares, as permitted, in the open market.

The company's revenue for the quarter ended Nov. 26 was $5.2 billion, down 6% from the same quarter in the previous year. Net profit at $265 million was down 71% from the previous year.

The company said Sunday it had about $1.5 billion in cash at the end of the quarter and negligible debt.

Copyright © 2012 IDG Communications, Inc.

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