It seems every day brings a new reason to love or hate Research In Motion stock. Thursday was a good day: the U.S. Immigration and Customs Enforcement agency, which had decided to move away from BlackBerrys, agreed to trial-run the soon-to-be-launched BlackBerry 10 smartphone. The stock hit its highest level in more than seven months – despite the fact the product won't actually make its debut for seven weeks.
For now, the share price is moving on pure sentiment. Strip away the hype, however, and there is much to admire about RIM since Thorsten Heins took over as chief executive officer nearly a year ago.
Humility: RIM is a more humble and low-key company than it was under former co-CEOs Jim Balsillie and Mike Lazaradis. There's no greater evidence than a RIM securities filing in April, where the company admits to recent failures, shares concerns about its ability to attract and retain talent and acknowledges it could continue to bleed sales to its competitors.
Stability: Mr. Heins has been a steady hand on the wheel, attracting solid outside talent (new chief operating officer Kristian Tear was a senior executive with Sony-Ericsson; chief marketing officer Frank Boulben led commercial strategy for Vodafone). He stopped RIM's habit of overpromising and seems to be on track to deliver the BB10 by the end of January, as promised. The internal divisions that had grown under former management appear to have been largely smoothed over. Meanwhile, RIM has been cutting its work force and expenses, and, aside from a service outage in September, hasn't had any blowups this year.
A decent ground game: RIM has thus far handled the runup to the launch of the BB10 smoothly. The company has 50 carriers testing the devices and is generating goodwill with large clients. Outside developers are busy working on apps and early reviews are generally positive. On Wednesday, the company ran a slick wrap-around advertisement in the New York Times. RIM is handling the new product launch more effectively than past product launches.
Is BB10 likely to be a dud or a humongous game-changer? Neither. It looks to be too much of a me-too product to wow the consumer market, but enough of step forward to convince a good share of its institutional customers to stick with the brand. That should buy Mr. Heins a year or two.
To keep impressing, Mr. Heins needs one more thing: Repeatability. Product life cycles in high tech, and particular mobile devices, are short and sharp, and the question isn't so much, "Will BB10 succeed?" as "What about BB11 or BB12?"
RIM's biggest failure before Mr. Heins joined was in inadequately planning for its second, third and fourth acts. Rest assured work on the next iterations of the Apple and Android-based Samsung phones are well under way. Give Mr. Heins a polite round of applause if he gets BB10 to market as promised, but his real test lies after that.
Sean Silcoff