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Just when it seemed like Research In Motion would never make the dramatic management changes that investors and analysts are claiming, the BlackBerry maker announced on Sunday night that its longtime co-chief executive officers has announced that he will be replaced by Chief Operating Officer Thorstein Heins.
The news ends months of escalating problems at the Waterloo, Canada-based company. First, the spring launch of his BlackBerry PlayBook, RIM’s long-awaited tablet, was a flop. The company suffered a global outage in October, leaving many subscribers fearful of switching phone brands. In December, RIM delayed the introduction of the BlackBerry 10 operating system by several months for somewhat vague reasons.
Equally problematic was the decline in RIM’s share of the smartphone market throughout 2011. By the third quarter, BlackBerry had just 11% of the U.S. smartphone market, according to market research firm NPD Group. This was far behind phones running Google’s Android operating system, which accounted for 53% of the market, and Apple’s iPhone, which accounted for 29% of the market.
The trouble sparked rumors of a takeover plan. Some of these companies, such as Amazon, were actually interested in his RIM, but ultimately backed out. Other companies, such as Samsung, have publicly denied such interest or related negotiations.
RIM’s co-CEOs, Mike Lazaridis, who co-founded RIM in 1984, and Jim Balsillie, who joined RIM in 1992, have not completely severed ties with the company. RIM announced that both will relinquish their roles as CEO and Chairman of the Board, but Mr. Lazaridis will transition to Vice Chairman of the Board and Mr. Balsillie will remain a member of the Board of Directors. (Since 2007 she has served as RIM board member. Barbara Stymiest currently serves as board chair.)
Mr. Lazaridis and Mr. Balsilly also remain major shareholders in RIM, together holding 12% of the company’s outstanding shares.
Mr. Hines, currently president and CEO of RIM, joined the company in 2007. In his previous role at RIM, he oversaw the company’s product engineering as one of his two COOs. In a press release explaining his move, RIM cited Mr. Hines’ 27 years of telecommunications experience and management skills. He is from Germany and prior to coming to RIM was Chief Technology Officer of Siemens’ communications division.
RIM’s board of directors has been considering ways to revive RIM’s depressed stock price and make the company more competitive against rivals such as Apple and Google in recent weeks. Industry insiders believed Mr. Lazaridis and Mr. Balsillie would face pressure to relinquish their roles as co-chairmen, but would remain CEOs.
According to a report on January 3rd financial post article, RIM’s independent directors were due to submit a “governance review” report outlining their recommendations by January 31. Given the timing, the CEO shake-up appears to be related to that effort.
It remains to be seen how much of a difference Hynes’ promotion will make to RIM’s fortunes. In the company’s release, Hines called RIM’s current direction, which focuses on moving to a new operating system and increasing investment in marketing, “the right path.” The company also noted that Mr. Lazaridis will “work closely” with Mr. Hines to “provide strategic advice” and that Mr. Lazaridis will lead a new RIM board group known as the Innovation Committee. All of these are signs that Lazaridis will have a major influence on RIM’s technology strategy going forward. (See also Research In Motion: Replacing the CEO is not enough.)
RIM has already changed its webpage to reflect the change in management and will hold a conference call at 8 a.m. Monday to discuss the changes. [Update: For a summary of that call, click here.] RIM is next scheduled to release detailed financial results on March 29th.
What’s new: RIM releases new CEO video “Meet Thorsten Heins.”
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