The sky outside is ashen and rain is streaking the windows of RIM 10, one of the larger low-rise buildings that make up Research In Motion Ltd.’s campus in Waterloo, Ont. Inside a boardroom there, I am waiting for a man facing a much more fearsome storm. Thorsten Heins has a task that now seems far more difficult than it appeared when he was given it just seven months ago: to save RIM from irrelevance.
Everyone knows that time is RIM’s enemy. Everyone knows about the interminable delays in its next product line, BlackBerry 10, which have cost it not only credibility but millions of potential customers. The longer it takes to get it to market, the more ground RIM loses to Apple, Samsung Electronics and other competitors. Many wonder whether the company can even survive; in the days leading up to our meeting, the media pounced on two more takeover rumours, a grim testament to how far RIM has fallen.
But Mr. Heins suggests that rivals, if they are sniffing around, are doing so for a reason. He seems cheerful.
“I’d do the same thing if I were in their shoes,” says RIM’s German-born chief executive officer, refusing to comment specifically on Samsung, IBM or any other of RIM’s alleged suitors.
“The stock price is at a certain level. RIM has a great value proposition that is still in demand … not just given where the price is, but the potential and value of RIM in the future. That’s what drives – if it would be there, let’s assume it – that’s what’s driving the interest.”
RIM’s board is of the view that a turnaround is possible, so it’s not necessary to sell the company. But the market will only wait so long to see proof, which is why Mr. Heins is in a hurry.
“There’s no time for wine during lunch at the moment,” he says. He has insisted on limiting the discussion to 30 minutes, which is why I have arrived bearing coffee, which he takes black, and fresh apple strudel from Sproll’s Fine German Bakery in nearby Kitchener – a town called Berlin until anti-German sentiment during the First World War forced a change.
“That’s where my wife buys bread,” he says. “It’s fantastic.” Though I have not come with the warm vanilla sauce and ice cream that are served as toppings in his native Bavaria, Mr. Heins, a lanky, 6-foot-6 man with an athletic build, rimless glasses and a stiff side part in his salt-and-pepper hair, is nevertheless delighted, especially after he spies the raisins that are apparently the hallmark of fine strudel.
Pastries aside, Mr. Heins has little cause to be upbeat. He probably has the toughest corporate job in the country. While he tries to counter the BlackBerry’s vast market share losses in the United States, and growing pressure from Chinese competitors, Mr. Heins is also trying to shave $1-billion from RIM’s operating expenses – in part by laying off 5,000 employees, after the painful exodus of 2,000 last summer.
In 2008, RIM seemed unstoppable, its stock price peaking at about $148. After several poorly received products, the shares are now $6.88. And they have fallen by 56 per cent since Mr. Heins took over in January from long-time co-CEOs Mike Lazaridis and Jim Balsillie. At that price, RIM is worth $3.6-billion, less than half of Apple’s quarterly profit.
For years, the company has proved that Canadian corporations can do more than extract minerals from poor countries and run safe banks – that they can innovate, disrupt and change the way the world works. Conversely, RIM’s decline has fed into paranoia about the state of the country’s competitiveness.
Does Mr. Heins feel the weight of Canada’s expectations?
“Yeah, and rightfully so,” he says. “RIM has proven that out of Canada you can build an iconic, global Top 10 brand, that Canada is capable of pulling high-tech technology and making it into a meaningful product. Yeah, there is this expectation out there. But, by the same token, though, there’s also a lot of support.”