RIM Earnings Tumble, CTO, COO and Balsillie Fall Too
Research In Motion Limited (RIM), announced its full year fiscal 2012 financial results late Thursday and the news is not good. The Blackberry maker announced revenue and income losses as well an organizational shakeup that will see their CTO, COO and company co-founder Jim Balsillie all leave the company.
RIM's fourth quarter revenues were reported at $4.2 billion which is a 25 percent year-over-year decline. The company reported a Net Loss for the fourth quarter of $125 million or $0.24 per share, in contrast to the Net Income of $934 million reported for the same quarter in 2011.
For the full year, RIM's revenues came in at $18.4 billion which is a 7 percent decline on a year-over-year basis. Net Income for the year fell to $1.2 billion down from $3.4 billion in 2011. Moving forward RIM is no longer going to be providing full revenue guidance either, as the company anticipates further declines.
In an effort to help reposition RIM and restore the company to the path of profitability, new CEO Thorsten Heins has a few ideas and they begin with an organizational house-cleaning.
"In our evaluation of the organization structure, we have identified a level of complexity that is not conducive to the efficient operation of our business," Heins said during the company's earnings call. "There's also a lack of direct accountability in a number of functions that inhibit talented people from making decisions and being able to implement ideas and plans fast and decisively."
As part of RIM's re-organization, CTO David Yach will be retiring from the company. Additionally Jim Rowan, RIM's Chief Operating Officer for Global Operations will also be leaving. Heins also announced that the man he replaced as CEO will also be leaving.
"Today, we also announced that RIM's former Co-CEO, Jim Balsillie, has resigned from the company's Board of Directors," Heins said. "I'd like to take the opportunity to thank Jim for 20 years of service and leadership in the name of RIM and wish him well in the future."
The Future of RIM
Putting RIM back on the right path isn't just about people change, it's also about a change in focus.
"I did my own reality check on where the entire company really is. I think as the benefit of going through this process from the vantage point of CEO, it is now very clear to me that substantial change is what RIM needs," Heins said. "We plan to refocus on the enterprise business and capitalize on our leading position in this segment."
RIM has suffered competitively against Apple iPhone and Google Android in the consumer space to the detriment of their enterprise business efforts. Moving forward, Hiens stressed that he is committed to regaining lost share in the enterprise market.
Part of RIM's enterprise focus will be realized in their upcoming BlackBerry Mobile Fusion product which is a next-generation enterprise mobile device and management solution. According to Heins, Blackberry Fusion will allows organizations to efficiently manage existing BlackBerry smartphones and BlackBerry PlayBook tablets, upcoming BlackBerry 10 devices, as well as devices running Android and iOS.
"We believe that BlackBerry cannot succeed if we try to be everybody's darling and all things to all people," Heins said. "Therefore, we plan to build on our strengths to go after targeted consumer segments, and we will seek strong partnerships to deliver those consumer features and content that are not central to the BlackBerry value proposition."
Heins is also pegging the future success of RIM on the BlackBerry 10 platform. The first prototype BlackBerry 10 devices will be discussed in May at BlackBerry World, in an effort to help jumpstart the app developer value chain. Actual shipments of BlackBerry 10 devices are not expected until later in the year.