Research in Motion faces critical shareholders
By Hayley Tsukayama,
Research in Motion executives faced shareholders at an annual meeting Tuesday, just weeks after letting loose the disappointing news that it will delay its new smartphone system and lay off 5,000 of its workers.
The company has been struggling in the past few years to deal with a new smartphone market dominated by Apple and phones running Google’s Android system. BlackBerry 10, a complete redesign of RIM’s BlackBerry operating system, was expected to finally launch in late 2012 after a series of delays. But the company said late last month that it would be pushing the system back again, this time to early 2013.
The company’s stock dropped 14 percent after the announcement and has yet to recover. Shares opened Tuesday at $7.82, but were down to $7.34 by the time the meeting concluded about 11:30 a.m, Eastern.
Chief Executive Thornsten Heins said at the start of the meeting that the company’s enterprise and consumer businesses will move “closer and closer” together. But while Heins was enthusiastic about the company’s prospects for the future, he was careful to say that the road ahead will not be easy.
The next several quarters, he said, will be challenging. RIM plans to license its operating system to competitors as it works to build out its subscriber base.
Shareholders reelected Heins and former CEO and co-founder Mike Lazaridis to the board, but posed some tough questions that illustrated a strong criticism of the company’s board.
Heins himself faced some hard questions from shareholders such as whether he truly had the leadership chops to run the company and if he could justify his compensation package.
A shareholder at the meeting pointed out that Heins had not previously been a chief executive of a company RIM’s size. Heins countered that he has led “several billion-dollar divisions” within Siemens.
Another shareholder used the opportunity to issue a consumer complaint, asking about the availability of a rapid charger and travel case for the PlayBook tablet.
“Is this symptomatic of the problems with RIM?” the shareholder asked. Prompting laughs from the audience, Heins said that he would look into the problem and said that if he couldn’t find a satisfactory answer, “I will get you one.”
The small exchanges with shareholders further illustrate that Heins, who has only been in his position for a few months, is trying to cast himself as a frank and approachable executive.
Research in Motion has been on a heavy PR push in the days leading up to the meeting to tamp down fears that the company is dying. Ahead of the meeting, Heins and other executives were enthusiastic about launching its next operating system and the direction of BlackBerry 10.
In an interview with the magazine CIO, Heins said that he was not happy with the situation at RIM right now, but that delaying the system’s launch was necessary to push out a quality product.
“I had to make a decision,” Heins told the magazine. “I could actually have kept the schedule, if I had made a sacrifice on quality and on platform stability. And I decided not to do that, because I need to make sure that when we deliver a BlackBerry, it is best quality.”
Heins also said that the first BB10 device would be available in January, and that more devices would follow quickly and that it will be cutting down on the number of devices it has out at a time.
“I won’t give you a specific date, but it’s kind of like a one-two punch,” he told CIO. “You will see more than two devices, but I can also tell you that you will see us being much more focused in the product portfolio that we will be bringing out.”