Analysts quickly noted that Research in Motion's decision to replace… (Jason Alden, Bloomberg )
Shortly after BlackBerry maker Research in Motion Ltd. named its new chief executive, the struggling company posted a seven-minute video to introduce little-known Thorsten Heins to the world.
On Wall Street, which had wanted a bigger shake-up, the meandering video — and the announcement in general — was a flop, doing little to reverse lingering doubts about the smartphone maker. The company's shares tumbled $1.44, or 8.5%, to $15.56 on Monday; its stock was trading at $62.69 a year earlier.
"Not particularly compelling," Barclays Capital analyst Jeff Kvaal said in a note to investors.
"It was delusional in terms of the way he tried to position the company," said Charlie Wolf of Needham & Co. "This guy is calling a spade a four-leaf clover."
Viewers who saw the clip on YouTube were also unimpressed. The top comment, which was "liked" 32 times by noon: "He speaks as slow as their OS."
"I mean, we always think ahead, we always think forward, we sometimes think the unthinkable, and that is fantastic," Heins, shown in front of a BlackBerry banner in a charcoal gray suit, said in a monotonous, halting manner.
It was a less-than-warm welcome for Heins, a former chief technology officer at Siemens who joined RIM four years ago and became its chief operating officer of products and sales last August.
Analysts quickly noted that RIM's decision over the weekend to replace its longtime co-chief executives, Mike Lazaridis and Jim Balsillie, with a company insider was a missed opportunity to bring in some much-needed outside perspective.
Wolf said the move was "a non-event" because Lazaridis and Balsillie remained on the board of directors and would still be involved in decision-making.
"It's a cosmetic change," he said. "To me, what RIM did was really just sort of attempt to respond in as limited a fashion as it could to shareholder pressures."
Those pressures have mounted recently as BlackBerry, once the undisputed leader of the smartphone industry, continues to lose market share to Apple Inc.'s iPhone and devices that run Google Inc.'s Android software. The rise of Microsoft's Windows Phone platform is also posing a growing threat to BlackBerry.
In the U.S., RIM's share of the smartphone market fell to 16.6% for the three months that ended in November, down from 19.7% the previous quarter, market research firm ComScore Inc. said. Just three years ago, the company captured about half the smartphone market.
Recent turmoil hasn't helped matters, including numerous product and software delays. Several top executives at RIM have departed and the company was pegged as a takeover candidate — although analysts say a buyout appears unlikely now.
"Given the new CEO is an insider, the expectations for fundamental change are minimal and we do not expect the company is open to being sold," Colin Gillis, a technology analyst at BGC Financial, said in a note to investors. "We expect the new CEO likely focuses on longer-term solutions to the detriment of near-term results. The company is on a declining trajectory."
In a call with analysts Monday, Heins said he was confident in RIM's future, noting that it had a sound balance sheet and 75 million people using BlackBerry services every day.
"Like all companies that scale and that grow globally, you hit a few bumps in the road here and there," he said. "But it is key that we learn from those mistakes. So without question, we're stronger today because of what we've been going through."
Heins touted the company's two big initiatives this year — the long-delayed release of its BlackBerry 10 operating system, now expected to be available toward the end of the year; and a software update to its PlayBook tablet next month.
Despite its troubles, Wolf, the Needham analyst, noted that RIM continues to have a loyal following in the business market because of its "superior" email capabilities. It also has a strong foothold in markets such as Latin America, Southeast Asia, the Middle East, Africa, India and parts of Europe.
"Analysts who are U.S.-centric say BlackBerry is disappearing, but that's hardly the case if you look at the international landscape," he said.
Still, Wolf said the company has a long way to go to get back on track in the U.S.
"BlackBerry 10 is going to be a very important product in determining the future relevancy of this company, and I'm very cautious because RIM has never shown that it can develop software," he said. "I'm going to be a skeptic until proven otherwise."