RIM CEO denies imminent demise of the company

While many pundits are forecasting RIM’s (Research In Motion’s) imminent demise, its chief executive officer, Thorsten Heins, has written an open letter to the Globe and Mail denying that the company was facing its end and urging users to refrain from “counting BlackBerry out”.

 

Instead, he opined that the company was at the beginning of a transition, which will see it “once again change the way people communicate.”

 

Heins continued that society was in the earliest days of truly mobile computing - an era in which people interact with the world around them in ways that could barely be imagined just a few years ago. He added that with BlackBerry, RIM created the framework that gave people their first taste of an untethered yet completely connected life.

 

 

“As we prepare to launch our new mobile platform, BlackBerry 10, in the first quarter of next year, we expect to empower people as never before. BlackBerry 10 will connect users not just to each other, but to the embedded systems that run constantly in the background of everyday life - from parking meters and car computers to credit card machines and ticket counters,” he elaborated.

 

While he admitted these were lofty goals, Heins detailed in length some of the factors counting in RIM’s favour moving forward, which included the company’s lack of debt and more than $2-billion in cash on its balance sheet.

 

Additionally, a planned corporate overhaul is expected to reduce the company’s annual operating expenses by more than $1-billion by the end of its fiscal year. “Unfortunately, that requires us to become a much more focused and smaller organization,” he noted.

 

“The facts about RIM's business provide reason to believe that we can succeed, even as we take painful but necessary steps to focus our resources and build a lean, nimble organization focused intently on bringing BlackBerry 10 to market,” he continued.

 

 

Heins optimism though, comes in the face of some dismal financial reports. The company recently reported a loss in the first quarter of this year in the region of $518 million, while its revenue for the first quarter of 2012 was noted as being reduced to $2.8 billion, as compared with $4.2 billion during the same time period last year, according to ZDnet.   

 

In a statement that defied some pundits in the US who considered RIM due for an obituary, Heins pointed out that company's global subscriber base continues to grow, to more than 78 million people in 175 countries.

 

“In many of those countries - some of the fastest growing markets in the world - RIM is the top smart-phone; and in some, RIM devices account for the top three spots,” he countered.

 

It is well known that South Africa counts amongst one of these unnamed countries, as RIM’s fluctuating fortunes in the US seemed not have had any impact on BlackBerry adoption locally.   

 

 

We can’t help feeling though, that the full letter, which is undeniably thoughtful and well written, is a damage control measure of sorts, in response to ongoing news that the company was considering splitting up into separate divisions and was looking for a willing buyer.  

 

However, RIM may very well surprise everyone, by pulling itself out of the hole it has been in internationally, successfully reinventing itself and becoming the comeback kid of the smartphone world from next year with its launch of BlackBerry 10.