January 23, 2012 7:52 pm

RIM shares hit by doubts over new chief

Shares in Research In Motion have weakened further in reaction to a sweeping board and management shake-up at the BlackBerry smartphone manufacturer after analysts raised doubts about the capacity of its new chief executive to turn the company around.

RIM shares were more than 6 per cent lower at $16.94 at midday on Monday, continuing a slide that has seen them lose three-quarters of their value over the past 18 months and led some investors to question whether RIM can survive as an independent company.

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The Waterloo, Ontario-based company named Thorsten Heins as chief executive over the weekend, replacing its two long-serving joint CEOs, Mike Lazaridis and Jim Balsillie.

Mr Heins told investors on a conference call on Monday morning that he will continue with his predecessors’ strategy and plans “no seismic” changes. He said he would focus on improving RIM’s process execution, boosting marketing and improving communications with customers.

Mike Abramsky at RBC Dominion Securities told clients: “It’s unclear to us whether or not these management and board changes are significant enough [or too late] to turn around RIM’s fortunes.”

Pierre Ferragu of Sanford Bernstein added: “The company remains on a worsening trajectory, which is unlikely to change without a major change in strategic direction … Thorsten Heins remains an insider, and we lack conviction on whether or not he will be making the sort of bold moves required to put the company on a better track.”

Mr Heins was previously one of RIM’s two chief operating officers. He joined the company at the end of 2007 after 23 years with Siemens, the German engineering group.

The company also named Barbara Stymiest, a former head of the Toronto stock exchange and senior executive at Royal Bank of Canada, as chairman. Prem Watsa, a prominent Canadian investor who owns 2.5 per cent of RIM’s shares, has joined the board.

RIM has struggled to respond to mounting competition in the fast-moving smartphone market, especially from Apple’s iPhone and devices powered by Google’s Android operating system. As a result BlackBerry devices have lost share in the key North American market, and its problems have been compounded by delays in the roll-out of new devices and a fresh operating system.

The problems have fuelled speculation that RIM could become a takeover target. Nokia, Microsoft, Amazon and, most recently, Samsung, have been mentioned as possible suitors. Mr Heins told analysts on Monday that one of RIM’s main strengths, like Apple, was its ability to integrate devices with networks, services and corporate servers.

But, he added, “we need to be more marketing driven, more consumer oriented, because this is where our growth is coming from”. As part of this drive, he plans to recruit a chief marketing officer who, he said, would be “also listening, not just talking”. He also pledged to instil more discipline in the company’s culture.

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