Canadians are too nice

From innovator to has-been: the BlackBerry problem.

Read time 3min 40sec

"We're being singled out because of our success." Ironically, Research In Motion (RIM) founder Mike Lazaridis' infamous objection during a BBC interview last year was not about RIM's current problems. He was responding to questions about security concerns on the BlackBerry network. Yet that was a storm in a teacup. After hitting an all-time high in 2008, the BlackBerry maker's stock had by then decreased by over 75% in value. Today, that devaluation sits closer to 95%. As one would imagine, stockholders are fuming over the freefalling value of the company and have repeatedly bumped heads with its management.

With this boom came out-of-control growth, leaving the company bloated, floundering and lacking in direction.

Leading the charge is the Jaguar Investment Corporation. This Canadian merchant bank has been actively rallying smaller stockholders to demand change, including a company split and selling off the handset division.

"RIM has lost it," Jaguar CEO Vic Alboini told the BBC in January, responding to whether RIM could still innovate its way out. Instead, his strategy is to sell the handheld business and license the network portion to other operators and handset manufacturers. It's not the first time this call was made: Jaguar rallied for it in late 2011, while RBC Capital Markets called for similar action a year ago.

Alboini again called for a breakup in July, labelling the current board as 'too cosy'. But it's been anything but a snug arrangement for the past year. When RIM let 2 000 employees go last June, it was followed by several key executive departures, some to competitors. Part of the spell was broken when long-time co-CEOs Lazaridis and Jim Balsillie stepped down, replaced by the technical-minded and prolific Thorsten Heins.

Finding its way

Heins mooted the idea of licensing BlackBerry access to other manufacturers, something Balsillie also toyed with. But he stuck to the current course instead, while aiming to transform RIM into a leaner, meaner entity, selling assets such as company jets and introducing even more layoffs (although the famous free ice-cream Fridays might stay). RIM gained substantial weight in the last decade. In 2003, it recorded revenues of $300 million. Four years later, it took in 10 times that amount. With this boom came out-of-control growth, leaving the company bloated, floundering and lacking in direction. During the 2011 layoffs, an anonymous open letter from a RIM executive outlined these problems. It said the company is not user-focused enough to tackle competitors and concluded that RIM has lost its edge, with one line declaring: "Canadians are too nice."

RIM's plan is to get BlackBerry 10 - its next hardware/software generation - out to market. But the all-touch interface had already been delayed once in 2011. Software and developer-wooing samples surfaced earlier this year, a move to show it is on the ball. Then, during RIM's latest financial report, it delayed the release again - until 2013. This is critical. BlackBerry 10 is an entirely new OS. With its delay, consumers have two choices: buy a soon-to-be-obsolete device, or wait almost a year for an upgrade.

Security headache

RIM has since admitted to investigating the option of splitting the company. This could lead to selling its device division and holding onto the network. Heins is very aware of the company's main problem: it's BYOD (bring your own device), which blurs the lines between a user's private device and the mobile they use in the workplace. A security headache for many technical executives, it's now eroding the once-mighty BlackBerry.

It all paints a complex picture. Some shareholders want to sell off parts to recoup RIM's perceived value. The interest is there: RIM has officially rebuffed an offer from Amazon and a chance to introduce Android on its devices. Others believe it should steer the course and use innovation as the way forward - after all, a BlackBerry without its software is simply another smartphone with a different name. And there is the crowd that wants to separate the herd, then decide what to do. But BlackBerry is running out of time. And that stock price is still falling.

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