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RIM on brink as CEOs step aside

Alex Scroxton
Jim Balsillie and Mike Lazaridis, joint CEOs of BlackBerry-maker Research in Motion (RIM) have stepped down, to be replaced by product and sales COO Thorsten Heins.

Heins, who joined RIM from Siemens Communications Group in 2007, will be charged with turning the ailing company around.

In a statement today, Heins rallied his troops and said the firm still had a strong foundation, with well over a billion dollars in cash and negligible debt.

"BlackBerry 7 has been well-received. We are very excited about PlayBook 2.0 and BlackBerry 10. The reception of our products at this year's CES was encouraging," said Heins.

"RIM earned its reputation by focusing relentlessly on the customer and delivering unique mobile communications solutions. We intend to build on this heritage to expand BlackBerry's leadership position.

"As with any company that has grown as fast as we have there have been inevitable growing pains," he continued. "We have learned from those challenges and, I believe, we have and will become a stronger company as a result."

However, Heins faces an uphill battle; the struggling smartphone maker has lost billions of dollars in recent months and is becoming increasingly desperate to recapture some of its past glories.

The ubiquity of the BlackBerry device line meant RIM came to dominate the nascent smartphone market during the noughties, and it maintains a loyal enterprise following to this day. However, it has been hurt by the growing dominance of Apple's iPhone, and the growth of the rival Android mobile operating system has not helped matters either.

Last year it fell victim to a number of service outages in both Europe and the US, which dented customer confidence, and its reputation in the UK also took a battering after it emerged its in-house messaging software, BlackBerry Messenger, was used extensively to coordinate last summer's riots.

Victor Basta, managing director at tech advisory business Magister Advisors, said that RIM's Achilles heel was its hardware focus.

"The brutal reality in this day and age is that businesses that are hardware-centric cannot succeed. IBM is a very rareexception to the rule, but it took them a decade to transition from a hardwareto a software focus," he said.

"RIM does not have the luxury of a decade. Itoperates in the rapidly changing mobile space and there is far less timeavailable. Nokia, for instance, went from leader to laggard in two years. RIM arguably has less time than that," warned Basta.


The pressure on the new incumbent will be doubled as, following the spectacular collapse of Nortel, RIM has become Canada's flagship tech company. If it was to collapse, there can be no doubt that the fall-out would be bitter indeed.
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