RIM's co-CEO team fiddles while company burns

Nero, who reportedly fiddled while Rome burned, had nothing on RIM's co-CEO team of Jim Balsillie and Mike Lazaridis. During a conference call yesterday that followed some rather negative announcements from the company, the pair seemed out of touch with reality. The company's stock is set to open this morning at a new 52 week low south of $30, more than a 50% drop from the 52 week high above $70. This is happening because RIM cut expectations of its second quarter and full year profits as we reported. How bad is it? Just a few weeks ago, the company was guiding Wall Street analysts to expect $7.00 a share in earnings for the year. Now, that has been sliced to $5.25-$6.00. Clearly, some key people at RIM are out of touch.

But being out of touch has been the Canadian manufacturer's MO recently. While the Apple iPhone and Android handsets have been sizzling hot, RIM tried to stem the tide with the BlackBerry Torch. While the idea was good, the execution was poor as 2 year old specs kept buyers away and while rivals had Super AMOLED and Super LCD displays with sharp, crisp resolution, the Torch had a screen that might have been outstanding-a few years before. While the Wi-Fi version of the BlackBerry PlayBook did top expectations with 500,000 units sold, many of those tablets went into the sales distribution channel and RIM would not say how many units were eventually sold to end users. While RIM was counting on the 4G version of the tablet to bring in some revenue, the company announced yesterday that the 4G PlayBook would be delayed until the fall.

Speaking of delays, the highly anticipated BlackBerry Bold 9900/9930, which adds a 2.8 inch touchscreen to the stunning good looks and awesome QWERTY keyboard of the Bold 9000, is delayed until September which means it might be too late for RIM to capture important Back to School sales. The latter will run the new BlackBerry 7 OS-a transition piece of software until the QNX OS, used on the PlayBook, has been developed for smartphones. RIM has said that the new browser is one of the elite browsers in the industry.

Yesterday's conference call saw the co-CEOs pat each other on the back. Mike Laziridis said, "Our co-CEO arrangement is what led to RIM’s success over the past two decades." The comment was made in response to a recent call by some RIM investors to end the two-man CEO team. Jim Balsillie had comments of his own. He noted that, "Mike and I have been partners in this business for almost 20 years, and during that time RIM has grown to $20 billion in annual revenue. We are currently approaching the tail end of a significant transition in our business, that, frankly, few companies would have survived. But we have. And I believe, and I think Mike would agree, that neither of us could have taken RIM this far alone." Remember, this is the duo that allegedly said that RIM would never produce a touchscreen phone after watching the success of the original Apple iPhone in the marketplace. And who could forget when Jim Balsillie said to expect all new smartphones to be launched with bugs after the BlackBerry Storm was rushed out the doors with half-finished software.

With job cuts looming, co-CEO Laziridis seems to be stuck in the past, a glorious pre-iPhone time when BlackBerry was a generic word for a cellphone. He said yesterday, "Jim and I have the perfect balance to make the hard decisions,” Lazaridis said. "This is fun. … We’re changing the world. We’re transforming the way people work. … We birthed a tablet in a year! … We transitioned to a new operating system!” So according to the two guys running the company, it is fun to watch your product line become irrelevant, your stock price drop precipitously and the few promising products you do have get pushed out into the future.

What might be fun for Balsillie and Laziridis doesn't appear to be fun for stockholders losing money and the still large group of BlackBerry fans. Yes, believe it or not, RIM has a hardy group of fans that still love the platform, especially the push email and BBM. Those are the people that RIM should be concerned with when it comes to having fun. But if the share price continues to drop as fast as the Florida Marlins' NL East hopes, BlackBerry fans will get their day of revenge when another company-Microsoft or Samsung or perhaps even HTC-decides to put RIM out of its misery and buys the company. For RIM fans, that day can't happen soon enough as getting real leadership into the company with an idea of what the public wants could turn around the manufacturer and start producing BlackBerry devices that could honestly compete with the Apple iPhone and Android handsets. Now, BlackBerry fans, wouldn't THAT be fun?

source: AllThingsDigital