At a VIP reception during this year's BlackBerry World conference in Florida, Research In Motion co-chief executive officer Jim Balsillie found himself surrounded, as is often the case at such events, by a phalanx of analysts.
This time, however, they weren't just asking about smart phone shipment dates or the company's new PlayBook tablet. Instead, according to a person who attended the event, some of the analysts were loudly wondering just when Mr. Balsillie and his co-CEO, Mike Lazaridis, would step aside and hand the reins to someone else.
It may seem a strange thing to ask the head of a company that has gone from $2-billion (U.S.) to $20-billion in sales in five years - and has just posted several record-breaking quarters in a row. But such is the pressure around RIM that, for better or worse, a few people are beginning to ask whether it is time for the men who built Canada's most successful technology company to go.
On Thursday, the spotlight returns to RIM and its two chiefs as the company reports the results for its fiscal first quarter. Industry analysts are anticipating bad news; several think RIM's executives will delay key product launches, such as a new touch screen BlackBerry Bold, and again issue a weak forecast for future earnings.
Kris Thompson, an analyst with National Bank Financial, warns guidance for the next quarter could be much worse than expected and that RIM may even revoke its full-year earnings forecast of $7.50 per share.
The Waterloo, Ont., company will soon begin shipping higher quality, more expensive devices running the more advanced QNX operating system, sharpening RIM's ability to compete. But RIM is also likely to have suffered further loss of market share from the enormous growth of smart phones powered by Google's Android operating system, Mr. Thompson said. Some analysts are projecting a meaningful drop in revenue when compared with last year's fourth quarter.
All of which goes a long way to explaining a few things, including the falling share price (down 40.7 per cent so far this year, the stock is at its lowest point since 2006) and the extraordinarily low valuation (less than six times last year's earnings).
"While the stock valuation appears cheap, we don't have a lot of confidence in management's ability to stall operating expense growth," Mr. Thompson wrote, adding that the stock could dip below $30.
In recent weeks, RIM hasn't been the only tech company facing vocal calls from investors and analysts for change. Hedge fund manager David Einhorn launched an attack on Microsoft CEO Steve Ballmer, saying "his continued presence is the biggest overhang on Microsoft's stock." The public criticism comes just as Mr. Ballmer engineered the biggest purchase in Microsoft history, an $8.5-billion acquisition of Internet communications company Skype. It appears some investors aren't willing to wait and see how Mr. Ballmer's big bet turns out.
Nokia has also seen growing calls for change, although the company replaced its CEO as recently as September.
At least part of the impatience with management teams at some of the major mobile technology companies can be attributed to the Apple effect. The meteoric success of the iPhone and iPad over the past few years has essentially created two classes in the mobile-device market. Sales of Apple and Google-powered products are growing - although Google doesn't make nearly as much money on each device as Apple does - while the market share of most other major players is stagnating or shrinking.
Until those competitors come up with a device that can successfully compete with Apple's offerings, it is unlikely the calls for change will subside.
"People in the technology space are not patient," said Darren Dansereau, vice-president and portfolio manager at QV Investors in Calgary. "They realize the industry moves fast and they want a management team that also moves quickly."
Recent research by comScore shows a wide gap between the top three smart phone platforms - Google, Apple and RIM - and the rest. Smart phones running on Google's Android platform currently make up more than 36 per cent of the market, followed by Apple devices at 26 per cent, and RIM at 25.7.
Microsoft smart phones, in fourth place, comprise only 6.7 per cent of the U.S. market. But of the top three platforms, RIM is the only one that saw a decrease in U.S. market share in the first four months of this year, according to comScore.
To be sure, each company in the mobile industry appears to be dealing with its own unique management challenges - even Apple, where CEO Steve Jobs is on indefinite medical leave.
Mr. Dansereau is sharply critical of RIM's management structure, saying the company would be better off with Mr. Balsillie as chief marketing officer, Mr. Lazaridis as chief technology officer, and someone new with a proven track record as CEO. In Nokia's case, he says new CEO Stephen Elop simply hasn't had enough time to turn the company around.
In the past several weeks, a number of analysts, including Northern Securities' Sameet Kanade, have openly called for a management transition at RIM. UBS analyst Amitabh Passi recently described RIM's co-CEO structure as "suboptimal."
"The impatience is a direct result of analysts seeing what's going on in the marketplace," said Raymond Pirouz, a lecturer in new media marketing at the University of Western Ontario's Richard Ivey School of Business. "They're seeing something Apple is doing better than the others."
Despite the calls for a shift in philosophy, RIM's executives have taken on even more responsibility. After the company's chief marketing officer recently announced his departure, Mr. Balsillie also assumed the CMO role.
"I think they're going in the wrong direction," Mr. Dansereau said. "The co-CEO role is a job and a half in itself."