Can a single person save a formerly indispensable brand? Or will public perception and a rocky recent history overwhelm even the most competent executive?
Research in Motion's (RIM's) fall from state-of-the-art communications device maker to tertiary player in the mobile market was so sudden and so pronounced that it warrants a detailed explanation, and a turnaround specialist who works quickly. Instead, RIM promoted from within after its co-chief executive officers recently stepped down.

See The 5 Best Corporate Comebacks.

What happened, and how to fix it? Enter Thorsten Heins, a Siemens lifer and its former chief technology officer, who left to join Research in Motion five years ago. Despite his best intentions and his earnest appearance, the overwhelming consensus opinion is that the task ahead of Heins is impossible.


Will Heins Be What RIM Needs?
What's astounding is that the belief is almost universal: hardly anyone outside of Heins's immediate family thinks that Heins can make a difference. Then again, maybe that's not so astounding, given his unfortunate quote upon assuming control: "I don't think there is some drastic change needed." English is Heins's second language, but still. A company infamous for a recent network blackout and whose late-to-the-party tablet can't send nor receive email (without a BlackBerry attached, which would seem to defeat the purpose), needs to change drastically.

So what exciting, inspirational announcement did Heins assuage consumers and investors with upon taking office? He essentially told them to hold tight. BlackBerry's latest iteration of its operating system, BlackBerry 10, will be available in a few quarters. To hear Heins say it, a man with something of a vested interest in the outcome, it's going to be great. Unfortunately for RIM, the company doesn't have the luxury of telling its existing customers and potential new customers to wait. Not that a operating system update, especially a major one, can be rushed; however, it's not as if iPhone and Android (to say nothing of Nokia, Symbian and Windows Phone) are standing still and waiting for RIM to make a move.

RIM's financial statements back up the pessimism. They're not uniformly horrible, as revenue is up and shareholders' equity is moving in the right direction; however, net income is dwindling rapidly and if the trend over the last few quarters continues, a once mightily profitable company will soon start losing money. (For additional reading, check out 12 Things You Need To Know About Financial Statements.)

Rise and Fall
It's hard to imagine that there was a time when the company behind BlackBerry boasted the operating system of choice among professional users throughout much of the developed world. It's also hard to imagine how quickly the landscape changed. In four short years, the same forces that have spurred Apple's iPhone and Google's Android series of devices to positions 1 and 1A atop the mobile market, while rendering Hewlett-Packard/Palm's webOS dead on arrival, has left RIM in limbo. As of November 2011, the company's market share sits at around 6.5%, according to reports released from comScore. The stock has lost roughly 74% of its value in the past year. It's trading at an eight-year nadir.

RIM reached its peak in the early 21st century, thanks to a breakthrough concept easy to define and easy to appreciate: its signature product line allowed users to send and receive emails without being tethered to a workstation. Similar to most successful shift changes, the concept of mobile email then advanced rapidly throughout the industry. It went from unique technological marvel, singularly identified with RIM, to indispensable feature that every mobile phone user on every platform now takes for granted.

RIM positioned its devices as made for business, with push email, proprietary messaging and a full keyboard necessitating a small screen. That was in contrast to that flash-in-the-pan toy from Apple, a shiny glorified music player with a high-resolution screen, virtual keyboard and line of accessories.

Apple adapted, killing the perception of the iPhone as a non-business device before that perception had a chance to take root. The iPhone worked flawlessly with Microsoft Exchange ActiveSync, and exploited a huge structural deficiency of RIM's: what if I want to send messages to someone who has a device on a different platform? Google's open-source Android followed suit (so closely that Apple founder Steve Jobs's famous dying wish was to drive Android out of business.) As for RIM, with its dizzying number of models, most of which differed only superficially, even a de facto presidential endorsement couldn't save it. This lead to the company's fade from 43% market share into relative obscurity. Next stop, oblivion.

The Bottom Line
Heins can, and probably should, start slicing expenses mercilessly. (RIM's overwrought and ineffective advertising would be a good place to start.) However, he's stuck trying to sell obsolete products whose capabilities come up short against those of competitors' similarly priced devices. An unenviable position for any executive to be in, and perhaps one that there's no graceful escape from.

Related Articles
  1. Forex Education

    China's Devaluation of the Yuan

    Just over one week ago the People’s Bank of China (PBOC) surprised markets with three consecutive devaluations of the yuan, knocking over 3% off its value.
  2. Professionals

    The Rich Get Richer: Global Wealth is Rising

    Global wealth is rising and expected to continue. Advisors should know that the wealthy value fee transparency, performance.
  3. Entrepreneurship

    Bill Gates Success Story: Net Worth, Education & Top Quotes

    Learn about billionaire Bill Gates, and how the computer genius forged his own path from an early life and eventually changed the world with his innovation.
  4. Entrepreneurship

    Donald Trump Success Story: Net Worth, Education & Top Quotes

    Discover more about Donald Trump the man. Learn about his history and back story, path to success and current political aspirations.
  5. Entrepreneurship

    Hillary Clinton Success Story: Net Worth, Education & Top Quotes

    Learn about Hillary Clinton's early life in Chicago, her years in Arkansas with her husband, and her time as first lady, senator and secretary of state.
  6. Entrepreneurship

    Mark Zuckerberg Success Story: Net Worth, Education & Top Quotes

    Learn about Mark Zuckerberg, the founder and CEO of Facebook. Understand where he came from and what in his life helped him achieve success.
  7. Entrepreneurship

    Charlie Munger Success Story: Net Worth, Education & Top Quotes

    Learn about Charlie Munger. Understand what drives him, how his early life shaped his later success, how he found that success and what he's doing with it.
  8. Entrepreneurship

    Jim Yong Kim Success Story: Net Worth, Education & Top Quotes

    Learn information about the life and success story of Jim Yong Kim, who rose from humble beginnings to become the head of the World Bank.
  9. Entrepreneurship

    Jim Cramer Success Story: Net Worth, Education & Top Quotes

    Learn about Jim Cramer the man and how he got to be successful. Understand his different levels of success and what he is doing in 2015.
  10. Entrepreneurship

    Janet Yellen Success Story: Net Worth, Education & Top Quotes

    Look into the life and academic career of Janet Yellen, the first female chair of the Federal Reserve and a noted Keynesian economist.
RELATED TERMS
  1. Warren Buffett

    Known as "the Oracle of Omaha", Buffett is Chairman of Berkshire ...
  2. Steve Cohen

    A trading magnate also referred to as the Hedge Fund King and ...
  3. David Tepper

    A legendary investor who specializes in distressed debt and manages ...
  4. David Einhorn

    Known for his short selling strategy, activist investor David ...
  5. Lean Enterprise

    A production and management philosophy that considers any part ...
  6. Nelson Peltz

    One of the most successful activist investors in the financial ...
RELATED FAQS
  1. What qualities are necessary to be an effective member of the c-suite in a publicly-traded ...

    Several qualities are needed to be a member of the c-suite of a publicly traded company. The c-suite is business jargon term ... Read Full Answer >>
  2. Which professional athletes are on pace to join Michael Jordan as billionaires?

    Michael Jordan is perhaps one of the most well-known and richest athletes in the world. However, two notable athletic giants ... Read Full Answer >>
  3. How are Rupert Murdoch's holdings distributed?

    Rupert Murdoch owns a controlling share of News Corporation and over 750 different businesses. Some of the major brands he ... Read Full Answer >>
  4. What does a merger or acquisition mean for the target company's employees?

    Suppose one sporting goods manufacturer merges with or acquires another sporting goods manufacturer. Before the merger and ... Read Full Answer >>
  5. How did Bernard Baruch attain his wealth?

    Bernard Baruch obtained his fortune by investing in profitable stocks on Wall Street. Baruch is known as a legendary stock ... Read Full Answer >>
  6. Why was Bernard Baruch known as the "Park Bench Statesman?"

    As someone who preferred to conduct his meetings in informal settings and was led by persuasion rather than pressure, Bernard ... Read Full Answer >>

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!