RIM's CEO tandem: Portrait of pathetic

RIM's CEO tandem: Portrait of pathetic

Summary: Co-CEOs James Balsillie and Mike Lazaridis are taking $1 in salary a year. You get what you pay for.

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Research in Motion's two CEOs have to go. The company has lost investor---and increasingly customer---confidence over the last year, its latest greatest savior OS is behind schedule, the PlayBook is a disaster and RIM could be circling the porcelain rim if it isn't careful.

Worth every penny

Nevertheless, RIM carries on with its current management. Co-CEOs James Balsillie and Mike Lazaridis are taking $1 in salary a year. This token gesture inspires instant cynicism. The two may only be worth $1 a year at this point. You get what you pay for.

RIM's earnings conference call after a disappointing fourth quarter outlook was another romp through bizarro world. In this world, RIM is always on the cusp of a massive transformation and a product home run. If you've been paying attention you already know the punchline. RIM strikes out more than the Phillies' Ryan Howard in a playoff series.

Also: RIM's Q4 outlook: BlackBerry shipment projections tank | RIM expected to cut BlackBerry sales targets | RIM CEOs respond about poor U.S. sales, BlackBerry 10 delay | CNET: Want a BlackBerry 10 phone? Don't hold your breath

But why listen to me. Let's have RIM's dynamic duo tell the story in their own words.

Balsillie:

The last few quarters have been some of the most trying in the recent history of this Company. As you know, we are in the process of completing the largest platform and organizational transition in the Company's history, and while we have remained a solidly profitable -- remain solidly profitable and delivered significant unit volume during this transition, we recognize that our shareholders may feel we have fallen short, in terms of product execution, market share, and financial performance. That being said, we continue to believe that our transition will better position us to deliver enhanced value to shareholders, and enhance our leading position in the mobile communication space. It is important for you to know that Mike and I, as two of RIM's largest shareholders, understand investor sentiment, and we are more committed than ever, to addressing the issues at hand.

To further demonstrate our passion, alignment and commitment to RIM's long-term success, both Mike and I have asked the compensation committee to make a change to our cash compensation, such that our salaries will be reduced to $1.00 per year, effective immediately.

Translation: Hopefully this weak board of ours will keep us around. Here's a token salary cut for keeping us around.

From there, Balsillie talks about launching new devices and tablets as evaluating products, operations and manufacturing. In other words, hang on folks RIM will get this right sometime.

Balsillie continues:

We are leaving no stone unturned, and are evaluating a number of areas including product management and the number of SKUs offered, supplychain and bill of material cost efficiency, marketing and advertising, partnership and licensing opportunities, organizational and management structure, opportunities to leverage the BlackBerry infrastructure. While the proposed transformation may take some time, we believe that the steps we are taking will improve our performance, and better enable us to deliver on what we expect of ourselves, what our stakeholders want us to achieve, and what the 75 million loyal and passionate BlackBerry subscribers expect from us.

Translation: Yes folks, we think we still have a lot of times.

And there's more. Balsillie continues:

RIM's US business is particularly weak, and the positive trends we are seeing in several markets around the world including the UK, France, South Africa, Mexico and Argentina are being offset by high churn, and decreasing subscriber base in the United States.We are not satisfied with the performance of the business in the United States. In order to drive increasing demand for BlackBerry products and services in this key market, we are planning to undertake a comprehensive advertising and promotional program in 2012.This is expected to have an impact on earnings, as we invest to maintain and grow the BlackBerry brand and awareness in the high-performance BlackBerry 7 product family.

Translation: We have to cut prices because the U.S. isn't sold on our products. We'll market our way out of this mess. Yeah, that sounds good right Mikey?

After a thousand more words of babble, Balsillie hands the mike to his other half. Lazaridis is just as delusional but from an engineering perspective.

Lazaridis says:

We are committed to the BlackBerry PlayBook, and it's an important aspect of our longer term smartphone and mobile computing strategy. While we would have preferred the initial launch to have been smoother, I firmly believe that the BlackBerry PlayBook tablet remains the most secure and most advanced tablet platform on the market today, with true, real-time multi-tasking, flash-enabled browsing, uncompromised video streaming for both HTML 5 and flash video, which constitutes the majority of premium video content on the internet today, as well as a flexible platform based on open standards. These attributes will be further enhanced by the PlayBook 2.0 software when it becomes available.

The competitive dynamics of the tablet market are shifting rapidly, with a number of new entrants and pricing moves in the industry. As we await the launch of PlayBook 2.0, we expect to continue to run promotions to stimulate the market for PlayBook, both in the enterprise and consumer segments. While all PlayBook users will benefit from the new PlayBook 2.0 features such as native e-mail, contacts and calendar integration and the Android player, enterprise customers will benefit even further. New enterprise-focused features include enhanced device manageability, enterprise application deployment, and BlackBerry Balance.

Translation: We're going to lose money on every PlayBook we sell. You could argue I should be committed for being committed to that turd tablet. And yes we expect RIM customers to wait indefinitely until we figure out this native email thing.

Lazaridis then talks about why the latest superphones on BlackBerry 10 will be delayed.

We need a highly integrated dual core LTE platform.The processor we selected offers industry-leading power and efficiency, and also allows us to deliver the industrial design, that we believe is critical to the success in this market segment.This chipset will not be available until mid 2012. And as a result of this and certain other factors, we now expect our first BlackBerry 10 smartphones to reach markets in the latter part of calendar 2012. In the meantime, we believe that our strong BlackBerry 7 portfolio will continue to drive adoption of BlackBerry around the world.

Translation: The superphone is right around the corner. Really it is.

After a series of semi-painful questions Lazaridis says:

This is absolutely, not business as usual at RIM. We are going to do what it takes to get the value for shareholders and the Company, and we are totally redoubling our efforts on execution here.

Translation: I sort of have to say that if I'm going to keep this gig.

Related:

RIM's CEO tag team has to go before it's too late

Topics: BlackBerry, Hardware, Mobile OS, Mobility, Security

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93 comments
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  • Just shows you that like politicians, most business leaders have no clue

    On the other hand, how would you or I turn things around at this company?

    A low power consumption LTE chipset is a great idea, but don't you think Apple has one too and is just waiting for the right time to spring it. (When LTE is ubiquitous.) Without the legacy baggage of having to support 2 and 3G networks, all phones will improve in terms of battery life.

    So if this is all RIM has up its sleeves, game over.
    otaddy
    • Wrong location

      although, originally, it landed correctly, but when I went back to edit, it was posted to the wrong location.
      adornoe
    • RE: RIM's CEO tandem: Portrait of pathetic

      @otaddy The best phone from black berry that im waiting for is that one: http://www.technologyfazer.com/blackberry-curve-9380-hits-the-fcc.html
      nomikhokher
    • RE: RIM's CEO tandem: Portrait of pathetic

      @otaddy Motorola is the only one with a low power LTE chipset on market. It works great and they are willing to license it. RIM only has one thing going for it that other phones don't, Privacy. Their email and platform so far has been uncrackable. iOS, Android and Exchange seem to have backdoors so your government can snoop on you to see if you are trying to overthrow them.
      LarsDennert
      • RE: RIM's CEO tandem: Portrait of pathetic

        @LarsDennert Great points. The security of BBS is probably RIM's last remaining differentiator. You'd think they'd circle the wagons around that hill and make their stand there.
        wazungu
      • RE: RIM's CEO tandem: Portrait of pathetic

        @LarsDennert
        Privacy? Every typing seems to be sent to the cell companies in clear text.
        What is the name of the spy software inside every phone?
        paulomagalhaes
      • RE: RIM's CEO tandem: Portrait of pathetic

        @LarsDennert RIM? Privacy? No backdoors? Have you been living under a rock? http://www.npr.org/blogs/thetwo-way/2010/08/30/129534890/blackberry-maker-agrees-to-let-india-snoop-in-its-network
        x0n
    • RE: RIM's CEO tandem: Portrait of pathetic

      @otaddy Best Kindle light ever. Super blight and soft at the same time. Reading in the dark is such a joy. http://www.solarmio.com/en/OnlineStore.aspx
      sreeseche
  • Game over for a lot of companies

    Think back to all the mp3 player brands that were making a good living 10 years ago; Kodak, Rio, etc. then the iPod came out, the Apple haters laughed at it, and it was the game changer that others tried to then scramble and emulate, but couldn't due to the ecosystem of iTunes and third party accessory makers. iPod became the dominant, defacto mp3 player.

    Fast forward to 1997. You have Blackberry phones, windows phones, Nokia, Motorola, all co existing happily with their usual standard designs. Then the iPhone is unveiled and the game changes. Every other company, knowing Apple has caught them flatfooted, scrambles to copy Apple. But there's a problem. Apple spent years behind the scenes building a smooth running interface that was touch optimized and Laing the groundwork for their massive ecosystem.

    Other companies knew they were royally screwed and had to rush shoddy, half baked products to market. But worse of all, in their rush, they had to trample Apples patents on this new, earth changing device.

    Apple is playing a long chess game, getting the victories it needs in court to prove the above, which will then relegate other 'smartphone' manufacturers to go back to their 1997 designs, until they can find some way not to infringe on Apples revolutionary designs. And by the time they catch up, Apple, like always, will be five years ahead in the next revolutionary product, like Tv

    When those Xbox/kinect users find out it takes 13 voice commands, using strict syntax, to do something that Siri will perform with one naturally spoken sentence, those spying kinect cameras will be dumped next to thee Kin siblings!
    ShazAmerica
    • The short sighted will celebrate this.

      @ShazAmerica
      "Think back to all the mp3 player brands that were making a good living 10 years ago"

      All bankrupt lying dead on the side of the road after being run over by Apple. The elimination of competition has been good for consumers.

      "Fast forward to 1997. You have Blackberry phones, windows phones, Nokia, Motorola, all co existing happily"

      And soon all these companies will be extinct or out of the mobile business market. Again, we are marching ourselves happily into the same situation where anyone wanting to buy a smartphone or tablet will have a choice of Apple or nothing.

      It is a sick market. We all lose.
      toddybottom
      • RE: RIM's CEO tandem: Portrait of pathetic

        @toddybottom
        IF the other companies made a quality product, there would be plenty of competition, but this isn't the case. The problem is poor design and slavish devotion to the 90 day accounting cycle. Instead of racing to the bottom, these companies need to create products that people will be proud of owning. Instead, they mass produce cheap garbage and hope that people will settle for it. I hope the opposite and hold out for something better. I BOUGHT an unlocked iPhone 4s for my personal phone last month and love it becuase it works and is a work of art. It is amazing to behold. The quality construction, the design excellence, everything about is is outstanding. I get a FREE android phone from work, any android phone I want. I can get a new one every 6 months if I want to. I have had the droid X for a year now and it is a piece of crap. It already doesn't work anymore, uses 100% of the battery in 12 hours, GPS and EVERY other service is OFF, I got a new battery and have the same problem. My general impression about the drawer full of busted android phones I have is that they don't work they are crap construction and fall apart and break and don't work ( Yes, I meant to say that twice). It is hard to transfer information from the old busted one to the new one that will break soon. I have employees who BUY iphones to use at work because we won't issue them because of political infighting. Stupid.

        Just look at the iPhone, it is a beautiful piece of equipment, to hold, to look at, to use. My daughter has a three year old hand me down iPhone 3g, no, not the 3gs, and she SELECTED it over a brand new Motorola Droid X2 after using both of them. To quote a famous comedy troop: "Say no more".

        Same goes for iPods. Quality killed the pretenders.
        Realist2199
      • RE: RIM's CEO tandem: Portrait of pathetic

        @toddybottom Video didn't kill the radio star. The radio star committed suicide.

        And that's the story of the incumbent mobile phone industry. They achieved this by presenting inadequate, badly designed, unintuitive products, and pretending these were virtues.

        The narrow minded have and will continually fail to recognise this.
        Graham Ellison
    • RE: RIM's CEO tandem: Portrait of pathetic

      @ShazAmerica

      2007?
      dhmccoy
    • RE: RIM's CEO tandem: Portrait of pathetic

      @ShazAmerica

      2007?
      dhmccoy
    • RE: RIM's CEO tandem: Portrait of pathetic

      @ShazAmerica

      2007?
      dhmccoy
    • How do you "fast forward" backwards?

      You want us to think back to 10 years ago; okay, that's 2001. Then, you want us to fast forward to 1997; that's 4 years prior to 2001, and 14 years before 2011. Nice trick!

      But, your whole post is nothing more than love and adoration and admiration for Apple from a committed Apple fanatic. Geez! Most people out here are a lot smarter than you think.

      Remember that, the iPhone is barely 4 years old, and the iPad is barely 2 years old, and the iPod is fading. When it comes to technology, the attention span of consumers is only as long as the next great gimmick or the next "latest and greatest" product. Apple has been it for the last few years, and before that, RIM and Palm and Nokia could do no wrong, and now Android is storming past iOS. See a pattern? No! Well, that's because, there is no pattern, and anybody can be on top today, and tomorrow, some other company will be the darling of the finicky consumers.
      adornoe
      • RE: RIM's CEO tandem: Portrait of pathetic

        @adornoe@... "...the iPod is fading." Because the iPhone contains all of its functionality, as does the iPod touch.

        Android overtaking iOS? How many Android devices are GIVEN away every day? Even so, Android is losing ground lately. Android was doing well against the iPhone 4 last quarter while everyone waited for the iPhone 4S (or 5). Let's see what happens this quarter.

        Apple fan? Of course. I have expectations of Apple products that are rarely contradicted. I've been running a half dozen Macs on the net without AV software for over 10 years without a single problem. I trust that my iPhone or other Apple device is secure, durable, and will work intuitively, the way I expect it to. Rarely is that ever NOT the case. Why would I trust my financial information, my network security, and my personal information to people who sell such information for a living, and who care nothing about me except extracting as much money as they can from my use of their products in the shortest possible time frame?

        Hacking my computers and phones to get them to work the way I want them to ceased to be interesting to me years ago. It's not worth the effort when I can buy an Apple product and have that functionality out of the box. My experience with Android fans is that they are generally members of that set of users who pride themselves on being able to wield esoteric and obscure knowledge in order to get something, an OS, an application, a device, for free. Sorry, my status and self-image doesn't hinge on that kind of geekery anymore.
        ZekeStonekiller
      • RE: RIM's CEO tandem: Portrait of pathetic

        @adornoe@... Haha. preach brotha! ... Or sista.

        Completely agree. I have experienced this trend first hand being one of the--"business first" users of Blackberry phones the last 8 yrs. It wasn't long ago that BB ran the show. Can definitely get back in the game. No panic (from a users perspective).
        drice01
      • ZekeStonekiller: You're exactly the type I had in mind when I wrote my

        comments.

        You are the exact personification of what I wrote in this statement:

        "But, your whole post is nothing more than love and adoration and admiration for Apple from a committed Apple fanatic. Geez! Most people out here are a lot smarter than you think."

        Thus, you proved me exactly right with your post above. And you might not even realize it!

        And, yes, I knew exactly why iPods are fading, but I didn't think I had to explain it to people who are supposed to be informed on technology matters.

        But, again, I stand by my comments in the previous post. I've been in the technology/software field for a very long time, and I've seen the comings and goings, and understand quite well how it works. I don't do the corporation adoration thing that so many do; like you, for example.
        adornoe
      • RE: RIM's CEO tandem: Portrait of pathetic

        @adornoe@... Finally, someone who sees and says the truth.
        FrankieGoesToOttawa