A shareholder uses a BlackBerry PlayBook during the RIM annual general meeting. Photograph: Mike Cassese/Reuters
BlackBerry maker Research in Motion co-chief executive Jim Balsillie says the company plans to launch seven new smartphones running its next-generation operating system in coming months – but admitted to shareholders that the company faces challenges as it tries to hit that target.
Speaking at RIM's annual meeting on Tuesday, Balsillie said that there had been delays in releasing the new OS, but that the new phones would enable RIM to stay on track to meet its financial guidance for the year.
Analysts have been doubtful that the company can meet its ambitious full-year guidance after a dip in profits in the last quarter, and RIM's share price has fallen more than 50% this year, to its lowest point since August 2006, before Apple's iPhone was launched. The company is presently valued at just $13.6bn (£8.5bn), compared to its August 2008 high of $75.2bn.
Mike Lazaridis, who shares the title of co-CEO with Balsillie, said the delays were due to company's efforts to get its smartphones to meet market expectations, adding that the technology in the new BlackBerry Bold jumps a generation. "It may have delayed us, but we are going to come out ahead," Lazaridis said, adding that the delay would bolster RIM in the face of what he called an "arms race" brewing among its smartphone competitors.
RIM once dominated the corporate smartphone market but has been struggling to come up with a device to compete with Apple's iPhone and smartphones running Google's Android.
It has also had poor reviews for its PlayBook tablet, launched in April. So far it has not released any sales figures for the device. A very small proportion – about 1,000 – had to be recalled because of defective software. It has lost around 1 million users in the US according to figures from ComScore, although it announced last week that it had gained 1 million in the Europe, Middle East and Africa (EMEA) region in the past three weeks. The company's results suggest that many of the gains have come through lowering prices.
Shareholders indicated that they are anxious to see what's next in the company's device roster, with some criticising RIM's lack of marketing efforts in the face of rivals such as Apple. One shareholder brought pictures of the RIM's PlayBook tablet display at a Best Buy store that he said fell short of the rival offerings.
Lazaridis said the company is continuing to build on RIM's reputation for security when it comes to email and added that trials of the PlayBook were under way at more than 1,500 companies. "This includes multiple government agencies and groups from both the public and private sectors," he said.
The management structure, in which Balsillie and Lazaridis share the titles of chairman and chief executive, has also come under criticism, with some calling for an independent chairman. RIM avoided a shareholder vote on a plan to split the roles of CEO and chairman before the meeting when it reached a deal with Northwest & Ethical Investments to establish an independent committee to review the role of the chairman.
Northern Securities analyst Sameet Kanade said setting up a committee just prolongs the need to split up the roles. "We don't think it bodes well for the stock in the short to medium term," Kanade said. "It looks nice on paper, but it doesn't really solve the more pressing concerns of who is looking out for shareholder concerns on the board and who is looking out to make sure the CEO or the co-CEOs are taking the right and decisive actions."
Kanade said he believes Lazaridis should be the CEO with Balsillie as the chief marketing officer or filling other roles. "Accountability would be more direct with one person running it. There's no one looking out for the shareholders' interests on the board."
The falloff in RIM's share price has prompted takeover rumours, leading one shareholder to ask about a "poison pill" rights plan to block a hostile bid. Balsillie responded that a rights plan could be put in place in a "blink of an eye" if a hostile offer was made for the company.
Speaking at RIM's annual meeting on Tuesday, Balsillie said that there had been delays in releasing the new OS, but that the new phones would enable RIM to stay on track to meet its financial guidance for the year.
Analysts have been doubtful that the company can meet its ambitious full-year guidance after a dip in profits in the last quarter, and RIM's share price has fallen more than 50% this year, to its lowest point since August 2006, before Apple's iPhone was launched. The company is presently valued at just $13.6bn (£8.5bn), compared to its August 2008 high of $75.2bn.
Mike Lazaridis, who shares the title of co-CEO with Balsillie, said the delays were due to company's efforts to get its smartphones to meet market expectations, adding that the technology in the new BlackBerry Bold jumps a generation. "It may have delayed us, but we are going to come out ahead," Lazaridis said, adding that the delay would bolster RIM in the face of what he called an "arms race" brewing among its smartphone competitors.
RIM once dominated the corporate smartphone market but has been struggling to come up with a device to compete with Apple's iPhone and smartphones running Google's Android.
It has also had poor reviews for its PlayBook tablet, launched in April. So far it has not released any sales figures for the device. A very small proportion – about 1,000 – had to be recalled because of defective software. It has lost around 1 million users in the US according to figures from ComScore, although it announced last week that it had gained 1 million in the Europe, Middle East and Africa (EMEA) region in the past three weeks. The company's results suggest that many of the gains have come through lowering prices.
Shareholders indicated that they are anxious to see what's next in the company's device roster, with some criticising RIM's lack of marketing efforts in the face of rivals such as Apple. One shareholder brought pictures of the RIM's PlayBook tablet display at a Best Buy store that he said fell short of the rival offerings.
Lazaridis said the company is continuing to build on RIM's reputation for security when it comes to email and added that trials of the PlayBook were under way at more than 1,500 companies. "This includes multiple government agencies and groups from both the public and private sectors," he said.
The management structure, in which Balsillie and Lazaridis share the titles of chairman and chief executive, has also come under criticism, with some calling for an independent chairman. RIM avoided a shareholder vote on a plan to split the roles of CEO and chairman before the meeting when it reached a deal with Northwest & Ethical Investments to establish an independent committee to review the role of the chairman.
Northern Securities analyst Sameet Kanade said setting up a committee just prolongs the need to split up the roles. "We don't think it bodes well for the stock in the short to medium term," Kanade said. "It looks nice on paper, but it doesn't really solve the more pressing concerns of who is looking out for shareholder concerns on the board and who is looking out to make sure the CEO or the co-CEOs are taking the right and decisive actions."
Kanade said he believes Lazaridis should be the CEO with Balsillie as the chief marketing officer or filling other roles. "Accountability would be more direct with one person running it. There's no one looking out for the shareholders' interests on the board."
The falloff in RIM's share price has prompted takeover rumours, leading one shareholder to ask about a "poison pill" rights plan to block a hostile bid. Balsillie responded that a rights plan could be put in place in a "blink of an eye" if a hostile offer was made for the company.
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