We had been following and blogging around RIM’s come-back tale since December of last year, and while the company that once shook markets with each new Blackberry that it came out with, has now decided to call it quits in the smartphone race that it was so ferociously trying to claw into. According to CEO Thorsten Heins, “We believe that BlackBerry cannot succeed if we tried to be everybody’s darling and all things to all people,” Heins said. “Therefore we plan to build on our strength.”
Shift in Strategic Focus to Zero In on Consumer-Oriented Phones
RIM said it will focus its consumer efforts on targeted offerings that tap the company’s strengths, a change that came about as longtime executive Jim Balsillie leaves the board. Devices that employees would want to buy on their own and then bring to the corporate environment will now be touted as market-drivers, and the company has also started exploring partnerships and other opportunities for consumer products, which could include software and features that can then be incorporated into RIM’s own portfolio.
The management shake-up is primarily the ripples of a sharp difference in strategic foresight between Heins and other members, such as Balsillie, who wanted to continue trying to face the Goliaths in the smartphone arena. CTO for software, David Yach, and global operations COO Jim Rowan are also on the exit list.
BlackBerry Torch 9800 Selling Well, but Analyst Forecast Downgraded
As if the market hadn’t taken its jabs at the company, the financial community has started to tag along. According to Shaw Wu, senior research analyst at research-giant Sterne, Agee & Leach, “We’re picking up that the company’s higher-end BlackBerrys, including the Blackberry Bold 9900 and Torch 9800, as doing relatively better” but other handsets are performing quite below-par, falling to smartphones from Apple and Samsung. At Jefferies and Co., RIM’s shipments forecast has been cut from 12 million units to 10.5 million units, while revenues have been downgraded by $400 million for the past quarter.
While it has shifted its attention to areas where it can potentially capitalize, let’s see how well things are leveraged over the next two quarters, which is a potential make-or-break period for the company.