Analysts were mixed at best about Research in Motion’s move to name Thorsten Heins C
EO. Many bemoaned that Heins indicated that there wouldn’t be any significant change of direction.
On one hand, RIM’s move to replace Jim Balsillie and Mike Lazaridis as co-CEO was cheered. However, RIM still faces the same obstacles.
Also: RIM: New CEO but same old problems, failed strategy | RIM’s new chief: Five things I’ll change | RIM chiefs step aside; board appoints new chairwoman | RIM statement | Heins video | RIM co-CEOs finally step aside, Thorsten Heins to take over as CEO by himself | CNET: RIM’s leadership shakeup too little, too late? | ZDNet AU: RIM drops co-CEOs
The reaction to RIM’s move highlighted Wall Street’s disappointment.
Here’s a look at what analysts had to say:
Atlantic Equities’ James Cordwell
New leadership at RIM was clearly required given the co-CEOs had lost credibility with investors after a disastrous 2011. However, initial commentary from the new CEO suggests there is unlikely to be a material change in the company’s strategy, which is disappointing but perhaps unsurprising given he was part of the prior management team. Heins highlighted improved consumer marketing and better execution as his key areas of focus for turning the company around. Whilst we agree that these areas require improvement we fear that RIM‟s problems require more structural solutions.
Barclays Capital’s Jeff Kvaal
Heins is relatively unknown by the investment community. We thought some video clips made available by RIM last night were not particularly compelling - though admittedly they were not likely geared for an investor audience. We also believe RIM missed an opportunity to acquire some outside perspective by turning to Ms. (Barbara) Stymiest and Mr. Heins.
Jefferies’ Peter Misek
1) By making a break and bringing in new blood RIM is able to start a new chapter. 2) By allowing the Board to become truly independent, RIM and its Board can now have a more open strategic review. 3) This opens the door to other companies who were considering partnering with RIM to reconsider. 4) It allows shareholders to place all of the share price woes on the departing management team. We believe Thorsten Heins, a seasoned Siemens executive, is the smoothest near-term replacement. While it does not necessarily change anything overnight, it does create a fresh chapter and open doors and possibilities.
Stern Agee analyst Shaw Wu
In our view, a CEO with a strong consumer electronics and supply chain background would have been ideal. The fact of the matter is that RIM is a consumer company whether the company likes it or not. We estimate that 60%-70% of its business is consumer vs. 30%-40% for enterprise. What has changed in IT over the past few years is that consumer is increasingly driving innovation and buying decisions. This is one of the key reasons why Apple and Google have been so successful in the smartphone space. We frankly would not be surprised to see RIM implement further senior management changes in the future.
Wedbush’s Scott Sutherland
We believe change in leadership has the potential to improve execution. We believe that Mr. Heins may address the first item. Of note, RIM’s recent track record of introducing products that are late (BlackBerry 7) or subpar (PlayBook) needs to improve. Unfortunately, continued focus on an integrated strategy is likely along a losing path. In our opinion, consumers are driving demand decisions and seem focused on iOS- and Android-based devices. Furthermore, we believe Microsoft with Nokia is firmly positioned as the third option of choice for mobile operators. In addition, we believe iOS, Android, and even Windows have the ecosystem of devices, OS, applications and cloud offering to be successful and feel RIM greatly lags. Thus, based on comments made so far, it appears that the new CEO will stick with the current integrated strategy which we believe will fail.
