July 13, 2012 5:30 AM
RIM has been much in the news lately. The company is cutting almost one-third of its staff, about 5,000 people; it again delayed the release of its much-vaunted BB10 operating system; shares which sold one year ago at $30 closed July 10 at $7.44; and sales of its phones fell 41 per cent in the recent quarter. All of this has investors, analysts and RIM fans justifiably worried. But the worst part isn’t what is happening now. Rather, it’s what will happen eights months from now.
RIM is a company that cannot execute. It may have solid security, $2 billion in the bank and a worldwide client base — all arguments new CEO Thorsten Heins made in The Globe and Mail recently — but it is simply unable to deliver compelling products on time. Let’s be clear: customers buy products, not ideas or promises. RIM told the world that the new BB10 operating systems would be the fulcrum of the company’s future, and it promised to release BB10 devices by late spring 2012. It then delayed that to late fall. It has now announced that these world-changing phones will not arrive until “the first quarter of next year.”
Heins, at RIM’s annual general meeting July 10, explained the delay by saying that integrating code into the new platform is taking longer than expected. Really? Integrating code you own into phones that you built is a mysterious process? That one statement must have sucked all the air out of the room.
And the execution problems are not just with BB10. Remember the woefully inadequate PlayBook? It was a joke at launch.
So, we have a company with a history of missed or botched launches, and this company just announced it is cutting about 30 per cent of its workforce. Then, we are told that this smaller organization will be able to execute this time — really and truly — when the larger company with more people failed to do so.
I understand that RIM doesn’t have a lot of options right now, and that a company bleeding profits has to make cutbacks; Heins said the cuts will save about $1 billion by the end of its fiscal year. What I don’t understand is how a dramatically smaller staff is more likely to get work done.
But that is RIM’s logic, and we’ll find out if it holds in about eight months, at the end of the first quarter. We’ll see if RIM actually releases BB10 phones, and we’ll see if those phones are any good.
Peter Wolchak has been a professional print journalist for more than a decade. Starting as a news photographer at a community newspaper, Peter then worked as a staff writer at ComputerWorld Canada, a national trade magazine, and later served as the editor of that publication for four years. Peter then moved up to the national business magazine arena as the editor of Backbone. In addition to these journalism activities, Peter has also worked as a public speaker and discussion moderator, served as a judge for the McLuhan Festival’s Vortex awards, and sits on the E-Business Program Advisory Committee at Sheridan College.
Posted by Sue Ansell at July 13, 2012 5:30 AM
Categories: Business innovation Mobility Trends