Many RIM executives took to the airwaves today to clarify the misconceptions that have been circulating among the mainstream media since last Thursday’s earnings release. CEO Thorsten Heins gave an interview on CBC Radio and wrote an op-ed piece for The Globe and Mail. Meanwhile, Andrew MacLeod, Managing Director for Canada, gave an interview on CBC (below).
Most critics have failed to realize that RIM has $2.2 billion in cash (an increase of $100 million over the previous quarter), an installed base of 78 million users that the company generates a monthly revenue from, and an unused credit facility. The company has also learned from the launch of the PlayBook, and is committed to launching the first BlackBerry 10 smartphone when the device and ecosystem are 100% ready. With its significant cash position and a services business that generates strong cash flows, RIM will have no problem surviving until the launch of BB 10 (rumoured to be in the first week of January) when it launches a smartphone with many competitive advantages over iOS and Android. RIM has demoed two features of BB 10 so far (keyboard and camera) and both have wowed audiences. When BB 10 launches in early 2013, RIM will be launching an operating system that is superior to iOS and Android in every aspect, from its multi-tasking and multi-core capabilities to its crash-proof feature.
Below is the op-ed that CEO Thorsten Heins wrote today in The Globe and Mail:
By: Thorsten Heins, CEO of Research in Motion
Don’t count BlackBerry out.
In recent weeks, it’s become fashionable for pundits and market watchers to alternately eulogize Research In Motion as a fallen pioneer and demonize management for not chopping up the company to sell for parts.
As President and CEO of RIM, I understand the frustration and impatience of RIM’s shareholders and their eagerness to see the company start to surface the underlying value we all know exists at RIM. But we do not believe RIM is a company at the end. Nor do RIM’s current challenges hint at a larger Canadian problem of not being able to sustain successful technology companies.
Technology, and particularly mobile computing, is a globally dynamic industry where innovation is as likely to occur in Waterloo as it is in Seoul or Palo Alto or Stockholm.
Rather, we believe RIM is a company at the beginning of a transition that we expect will once again change the way people communicate. In technology, it is not if you have to change, but when you have to change, and we are in the earliest days of truly mobile computing – an era in which people interact with the world around them in ways we could barely imagine just a few years ago. 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.
Those are big promises, I know; and some doubt whether RIM can pull it off. I am the first to admit that RIM has missed on important trends in the smart-phone industry – especially in the consumer domain, focusing on its core value system for successful products and services. We are working diligently on BlackBerry 10 in order to provide a compelling experience for our loyal enterprise customers and consumers. While we are in a very competitive and constantly changing market, customers benefit from this competition and continued innovation.
As this market grows and includes more people in more countries, there is more room – a true need, really – for alternatives. We see this every week with our developer community, who are attending sold-out BlackBerry 10 developer sessions around the world to leverage our platform and ecosystem in order to create and innovate for their communities. That is why RIM has chosen to pursue a strategy that eschews the homogenized sameness of competing ecosystems. To help with that task, we have reshaped the executive team and recruited telecommunications industry veterans with proven track records of success.
Innovation is never easy and rarely understood – but it is exciting.
To that point, some of what I read and hear is thoughtful and insightful; some, frankly, is just plain wrong. But 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.
As some pundits write RIM’s obituary, the 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. We have relationships with 650 carriers around the globe; RIM’s reliability and security make it the first choice for countless government agencies and are part of the reason more than 90 per cent of Fortune 500 companies deploy BlackBerry in their enterprises.
RIM has no debt. The company also has more than $2-billion in cash on its balance sheet, and generated $710-million in operating cash flow in its first quarter.
Simultaneously, RIM is undertaking a corporate overhaul that we expect will reduce annual operating expenses by more than $1-billion by the end of our fiscal year. Unfortunately, that requires us to become a much more focused and smaller organization.
These are just the steps we’re ready to announce. As has been reported, RIM has hired outside advisers to help me and the other members of the executive team think about the business in new ways and to explore a range of alternatives that leverage our core strengths and build on the BlackBerry brand.
When I became CEO just over six months ago, I knew this would be a difficult and challenging job. RIM was – and remains – at a crucial juncture in its history. In response to our tough quarterly results last week, our employees received thousands of e-mails from around the world from retail customers, carrier partners, developers, family, friends and neighbours expressing their support and loyalty to BlackBerry. They are – like many of us – BlackBerry people by choice.
It reminded me just how much opportunity and promise there is within RIM, and how much of what makes BlackBerry special stems from our status as a small-town Canadian company.
While some who have never made the drive to Waterloo pontificate about software they have not seen or devices they have not touched, developers around the world are getting increasingly excited about the possibilities BlackBerry 10 offers. They see that innovation remains a core principle stretching back to RIM’s earliest days above a bagel shop.
Source: Globe and Mail