The 3 things that RIM's new CEO needs to execute on: devices, carriers, messaging
In a bow to investor pressure, BlackBerry maker Research In Motion (NASDAQ:RIMM) named COO Thorsten Heins as its new CEO, replacing longtime co-CEOs Jim Balsillie and Mike Lazaridis. While this move marks the end of a leadership era it doesn't really tell us much about how the company will change. Indeed, Heins said on a conference call Monday with investors that no drastic change is needed to the company's existing strategy.
To succeed in the cut-throat smartphone market, I believe RIM will need to rethink how it approaches the market. Heins will have to deliver a clear message to the market about why shoppers should choose RIM and what sets RIM apart from its competitors. And he will have to oversee a flawless launch of its first BlackBerry 10 devices later this year.
Heins has been at RIM for four years, coming on board as senior vice president for hardware engineering. He is deeply enmeshed in the company's transition to using QNX to power BlackBerry 10 and likely knows as much about the company's strengths and weaknesses as anyone, outside of Lazaridis and Balsillie.
But what can Heins do to give RIM a fighting chance?
His first step is to actually build and deliver devices that stack up against the competition in terms of specs and user experience. Unlike the first iteration of RIM's PlayBook tablet, the company's new smartphone operating system will have to ship with all of the features that have made BlackBerry products compelling, including native email and calendar support and support for RIM's BlackBerry Enterprise Server.
Secondly, RIM needs to maintain and strengthen its relationships with carriers in the United States and Europe if it wants to survive. Heins has to go after this aggressively. "These guys are the channel and RIM needs them," iGR analyst Iain Gillott said. "They have fallen out of love." AT&T Mobility (NYSE:T) has clearly embraced Microsoft's (NASDAQ:MSFT) Windows Phone as its third platform of choice and Verizon Wireless (NYSE:VZ) may follow suit as more LTE Windows Phones come into the market. Heins has to convince carriers that RIM's devices, networks and services are all worth betting on and sticking with.
Finally, Heins needs to clarify RIM's messaging. In the conference call, Heins argued that RIM's hardware and networking divisions should not be broken up, and that being a vertically integrated company is a unique and differentiating aspect. That may be the case, but RIM needs to do a better job of explaining to the market how that makes RIM different. This is an acute strategic challenge for Heins. And having strategic direction "will be essential as RIM seeks to compete in a market dictated less by hardware manufacturers and more by those with overarching advertising, content and service interests (e.g. Amazon, Apple, Google, Microsoft etc.)," according to CCS Insight.
The good thing is Heins has acknowledged the company needs to do a better job of explaining its message to consumers and here in the United States. But that message will have to be clear, concise and resonate with consumers. "They need to come up with a compelling marketing message that ties a lot of what they're already doing into a cohesive message," Gartner analyst Michael Gartenberg said.
Heins has a lot of challenges on his plate. I don't envy his position. Time is not on his side and the market is moving extremely rapidly. "Knowing what needs to be done and then executing and doing it; that's the difference between success and failure," Gartenberg said. We'll soon find out if Heins can execute. --Phil