Research In Motion Ltd., trying to ensure its survival as sales plunge, is charting a risky path of refocusing on business users while weighing strategic changes from licensing its BlackBerry software to selling itself.
Chief Executive Officer Thorsten Heins said Thursday that the BlackBerry maker will concentrate on the market it once dominated following a fifth straight quarterly sales shortfall. He also said he would consider a sale of the company, though that is not the "main direction" at the moment.
Heins, who started as chief executive officer in January, is retreating to serve enterprise users and "targeted consumer segments" after failing to stop continued market-share losses to Apple's iPhone and devices running Google's Android software.
That means he's withdrawing from the faster-growing part of the market while trying to ward off Google and Apple's accelerating push into the workplace, fueled by companies allowing employees to bring in their own devices.
RIM "may have lost too much momentum to recover," RBC Capital Markets analyst Mike Abramsky, who cut his price target on the stock Friday to $13 from $16, said in a note to clients. "We are concerned RIM continues to misread the market."
Jim Balsillie, RIM's former co-CEO, resigned from the board and two other executives departed as part of the overhaul. The Waterloo, Ont.-based company said it will discontinue giving financial forecasts.
Heins acknowledged that he was wrong in January when he suggested that RIM didn't need "drastic change."
"The impression I had of RIM at Day Two of being the CEO is now pretty different from the impression, not the impression, from the facts I know after being 10 weeks the CEO," he said on a conference call. "It is now very clear to me that substantial change is what RIM needs."
While Heins vowed in January to persuade more customers to snap up new Bold, Curve and Torch models, which offer better touch-screen navigation and Web browsing, that isn't happening.
U.S. government agencies, oilfield-services provider Halliburton and banks like Standard Chartered have either stopped issuing BlackBerrys or let employees use their own devices in the past 18 months. Heins said RIM was "late" to acknowledge the bring-your-own trend to the workplace that has contributed to falling sales.
To stop that trend from spreading, RIM needs to do a better job of reminding organizations that it can offer customers a dedicated network and secure servers, said Ted Schadler, an analyst with Forrester Research in Cambridge, Mass. RIM operates data centers around the world through which all BlackBerry emails travel, a competitive edge that helped it win over corporate users after it first started offering its service and devices more than a decade ago.