July 27, 2021

Markets Are Not Convinced by a New Leader at RIM

As he did during interviews with the media on Sunday, Mr. Heins, the former co-chief operating officer of RIM, said in a conference call with analysts and in a video RIM posted to YouTube that RIM’s strategy was sound and destined for success. Mr. Heins, who came to RIM from Siemens about four years ago, emphasized the company’s continued profitability and growth while playing down its precipitous drop in American market share — where it once held more than 50 percent it is now under 10 percent — and a 75 percent drop in the company’s share price over the last year.

It was not a message that resonated with many financial analysts who were hoping that the biggest shift in the company’s management since its forming in 1984 would also bring a new tone. Mr. Heins continued to strongly endorse the position of the former co-chief executives, Mike Lazaridis and Jim Balsillie, that RIM is currently in transition until it begins selling its new phones based on the new, and much-delayed, BlackBerry 10 operating system at the end of the year.

“People expected some sort of change,” said Ehud Gelblum, an analyst with Morgan Stanley. “No one expected him to have a whole new vision right now. But everyone expected him to say he’ll start a review of the company and leave no stone unturned. It’s not an auspicious beginning.”

Some of the analysts’ skepticism comes from a lack of familiarity with Mr. Heins. He is not well known in North America or in Europe, where he spent most of his career. But at Siemens, Mr. Heins faced a similar situation to what now awaits him at RIM. In April 2004, he was made head of Siemens’s mobile handset business. While Siemens was the second-largest maker of cellphones in Europe at the time, the business was unprofitable and apparently beyond redemption.

Andy Mattes, another former Siemens executive who once supervised Mr. Heins, sat with him on the company’s senior executive board for its communications unit. He said that Mr. Heins was charged with “finding a graceful way to exit the business.”

Mr. Heins moved on to become chief technology officer of the communications unit and in 2005 the handset business was sold to BenQ, a Taiwanese electronics maker. The sale to BenQ, in which Mr. Heins was apparently not directly involved, did not end well. BenQ put the German phone operation into bankruptcy a year later, angering union leaders and politicians in Germany.

His profile is low in Germany where he worked at a variety of positions at Siemens since 1984, when he joined the company as a junior manager.

“I really can’t say I know much about him or remember him at all,” said Theo Kitz, an analyst who has covered Siemens for 20 years at Merck Finck, a private bank in Munich where Siemens is also based. “He didn’t leave a lasting impression here and never rose to the top ranks of the company.”

Mr. Mattes, the former Siemens executive, said that like all managers at the company, Mr. Heins was moved through a variety of jobs to give him a variety of skills over about 10 years. In the case of Mr. Heins, that included a spell with the company’s wireless communications unit in the United States in 1996.

“All of us who grew up there had very broad training,” said Mr. Mattes, who later became a senior executive with Hewlett-Packard in the United States and who is now a corporate adviser.

Siemens, however, did shield its managers from the investment community, Mr. Mattes said, unlike his experience at H.P. and very unlike what Mr. Heins now faces at RIM.

“Dealing with shareholders, dealing with the Street, these are all things he will have to come up to speed on very quickly,” Mr. Mattes said, noting that they have not been in touch in recent years. “He’s a really great guy. I have only good things to say about him. Whether he can deal with the Street, the pressures from shareholders and analysts, I don’t know.”

In a note to investors Monday, Mike Abramsky, an analyst with RBC Capital Markets in Toronto, wrote that Mr. Heins “while a seasoned network executive, has never been a public company C.E.O., and lacks deep consumer marketing and software experience.” That, combined with Mr. Hein’s commitment to his predecessors’ plans, Mr. Abramsky wrote, means that it is not clear if he will be able to alter the “vision and direction of the company in light of rapidly changing competitive conditions and correct RIM’s seeming inability to navigate these challenges.”

Given that RIM was unable, or unwilling, to bring in an outsider as chief executive, Mr. Gelblum said the company’s directors should have made Mr. Heins interim chief executive pending the results of a talent hunt in which he would be publicly declared to be the preferred candidate.

Not all analysts were disappointed on Monday by RIM’s change. Michael Gartenberg, a technology analyst with the Gartner Group, welcomed Mr. Heins’s announcement that he would look for a new chief marketing officer for RIM. “RIM’s consumer marketing has, at times, left something to be desired,” Mr. Gartenberg said.

He said that it would take time for RIM to reverse its sliding market share in the United States. Mr. Gartenberg said that he would be looking for changes in operations and management over the next month to three months.

Ian Austen reported from Ottawa and Kevin J. O’Brien from Berlin.

Article source: http://feeds.nytimes.com/click.phdo?i=f1f76c643a6b528cc66789ef41eef718

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