Hundreds of investors descended on Research In Motion's annual general meeting in Waterloo, Ont., on Tuesday in search of answers to concerns that have tormented Canada's most important technology company for months – concerns about marketing savvy, product delays and even the focus of senior management.
But even in the face of a tumultuous year in which RIM's value was sliced in half, co-CEOs Jim Balsillie and Mike Lazaridis struck a confident pose. Amid a series of questions about the company's sliding fortunes, the executives clung to the same narrative they have used for the past six months: The troubles are temporary, and RIM is poised to regain its position atop the market with a new line of products.
While Mr. Balsillie conceded the company has "faced some challenges," there was little in the way of an explanation for how RIM has lost ground so rapidly to rivals like Apple and Google.
This is the first time shareholders have had a chance to voice their concerns directly to Mr. Balsillie and Mr. Lazaridis, who have faced considerable criticism over their management and direction of the company. Some analysts and investors have called for fresh leadership to turn the firm around.
While a great deal is on the line for RIM's shareholders, much is at stake for the country's technology industry and the economy as a whole. Since the death of Nortel Networks, the company has for the past decade anchored the sector – spawning startups, spending millions on research and development, and keeping some of the nation's most talented engineers employed in Canada.
That role, coupled with the company's presence in many Canadians' investment portfolios, makes RIM's health vital to the fortunes of much more than the thousands it employs. If RIM fails on the global stage, other tech companies are at risk of being dragged down with it – a collapse the country's economy can ill afford as it inches out of recession.
RIM's leadership might be sounding an optimistic note, but the company is facing a steep climb.
It has suffered through a storm of bad news that has shown no signs of letting up for the better part of a year. Profit warnings, product delays and calls for a management shakeup have seen its share price sliced in half since January. All the while, it has been losing ground to Apple and Google.
Earlier this year, RIM issued a warning that its second quarter results would be significantly weaker than expected – news that shocked investors and sent the company's stock price plummeting. When RIM announced its earnings last month, it also announced a round of layoffs, sending shock waves throughout the Canadian technology industry.
Much of RIM's trouble of late has come in the form of product delays, as the company has time and again pushed back the launch of its newest handsets. The new phones were expected to stop the bleeding as RIM prepares to transition to a an entirely new line of mobile devices in 2012 – devices that, the company's co-CEOs hope, will turn RIM's fortunes around.
In the meantime, RIM's BlackBerrys continue to lose market share to Apple's mobile devices, as well as devices powered by Google's Android operating system. The trend is most pronounced in North America, where the bulk of high-end smart phones are sold.
As a result of its struggles, RIM has as of late been the subject of much investor and analyst criticism. The company barely avoided what would have been an embarrassing showdown over the way it structured its board by promising to form a committee to explore the topic – an investor group had earlier proposed a motion that would force the co-CEOs to give up their joint roles as co-chairs of RIM's board of directors.
A number of other observers have also mused about whether RIM should bring a new management team on board – something current management opposes. Most recently, an analyst also suggested the company split its operations into two distinct areas – networking and handsets – so as to better concentrate on its core operations.