Reaction Roundup: Jim Balsillie’s out, execs are getting fired…what the heck is going on at RIM?
After a few weeks of relative quiet from Research in Motion, the company dropped a big pile of news on the world yesterday: the company’s fourth-quarter financial results were nearly as bad as analysts were predicting; former co-CEO Jim Balsillie resigned from the board; and RIM’s chief technical officer and chief operating officer were both dismissed. Will CEO Thorsten Heins’ day of reckoning set RIM on the path back to smartphone supremacy? We rounded up what the analysts are saying.
1. RIM is, at long last, ‘fessing up to how bad things are
The pundits agree that Heins is (finally!) acknowledging that RIM is in deep trouble: he said yesterday that the company is now open to partnerships, and—perhaps most surprisingly—he admitted, “there’s no guarantee of success.” After months of denial, the fact that RIM is now admitting the scale of the problem is potentially hopeful, say analysts at UBS Investment Research quoted in the Globe and Mail.
2. Despite the drastic measures, some analysts aren’t convinced
While JPMorgan analyst Rod Hall is impressed by the realistic approach and efforts to cut costs, he “believe[s] that the smartphone operating system war is over and RIM is one of the losers,” reports the Financial Post. RBC Capital Markets analyst Mike Abramsky says RIM “may have lost too much momentum to recover” and “continues to misread the market.” Smack. Down.
3. RIM could be sold—and here are some possible buyers
Heins hinted that, were the right buyer to come along, RIM could be put up for sale. “We would consider it,” said the coy exec in a conference call, and the Wall Street Journal immediately got to work with some wild speculation on possible suitors, including Microsoft, Nokia, Amazon, Dell or Samsung. Though a sale is likely not imminent, Finance Minister Jim Flaherty has already indicated the government wouldn’t block a foreign takeover.
4. Balsillie’s exit is no surprise
Balsillie was a force in the company for over 20 years, so his exit is momentous, if not surprising. The folks at the Globe and Mail say his exit has been expected ever since the sales and marketing department under his watch was targeted in layoffs last summer. And since that Vic Alboini guy told everyone about it.
•RIM’s turnaround bid: an ‘uphill battle’ [Globe and Mail]
•Deal Yenta: Who Could Buy RIM? [Wall Street Journal]
•Is it too late for RIM to recover? [Financial Post]
•RIM Charts Risky Survival Plan While Opening Door to Sale [Bloomberg]
•Wobbly RIM cleans house [Globe and Mail]