Embattled BlackBerry maker Research in Motion is returning to its business roots as its iconic smartphone struggles to remain relevant.
New CEO Thorsten Heins conceded yesterday that RIM is losing the consumer market after failing to compete with Apple’s iPhone and a growing number of devices powered by Google’s Android mobile software.
He said RIM would stress its core strength as the corporate workhorse with an emphasis on enterprise and security software.
“We plan to refocus on the enterprise business and capitalize on our leading position in this segment,” Heins said. “We believe that BlackBerry cannot succeed if we tried to be everybody’s darling and all things to all people.”
Also yesterday, the company said former co-CEO Jim Balsillie is severing all ties with RIM and would step down from the board. The company’s COO, Jim Rowland, is also leaving.
Two other executives — the company’s chief operating officer, Jim Rowan, and its chief technology officer, David Yach — are also hitting the exits.
The latest management shake-up came after the Waterloo, Ont.-based company announced disappointing results in its first quarter since Heins replaced Balsillie and former co-CEO Mike Lazaridis.
RIM had to write down losses on its BlackBerry 7 phones as it offered discounts to enterprise clients to keep them on the platform last quarter.
“He is focusing on enterprise by moving these people to BlackBerry 7 devices,” said Colin Gillis, an analyst with BGC Partners. “RIM does not want to lose the third ecosystem position.”
Microsoft is making a challenge for that spot with its Nokia partnership, and the launch of its flagship phone the Nokia Lumia 900, which runs on Windows software.
RIM’s latest software is 7, and the company has faced delays with its upgrade to BlackBerry 10 phones.
“Microsoft and Nokia are chasing hard after RIM,” Gillis said. “The Windows phones are sleek, fast going after that mid- to low-end at $100 and less.”
In the quarter ended March 3, RIM sold 11.1 million phones, down 21 percent from the third quarter. RIM sold only about 500,000 PlayBook tablets, despite cutting its prices.
The company posted a loss of $125 million, or 24 cents a share, compared to a profit of $934 million, or $1.78, a year ago. Revenue slumped 25 percent to $4.19 billion.
RIM also said it would stop issuing quarterly guidance, suggesting the company is in full-on turnaround mode for the foreseeable future.
In May, RIM is scheduled to host a BlackBerry World conference for developers and it will likely have Blackberry 10 phones for them to work on.
Beyond its enterprise customers, RIM’s future is building a platform around the Blackberry 10, which was developed with QNX software the company bought in 2010. Without developers and their apps, analysts predict the Blackberry brand could fade.
“Right now it’s yesterday’s phone,” Gillis said. “People loved pagers, too.”