RIM shares drop after investors demand answers
updated 06:48 pm EDT, Tue July 10, 2012
CEO promises 'lean, mean' RIM
Research In Motion held its annual shareholder meeting today, and Wall Street appears unimpressed with executives' plans to reverse the company's flagging fortunes. The past year has seen nearly 80 percent of RIM's value vanish in the face of competition, and observers from many corners are wondering if the company can survive the year. Speaking with shareholders, Reuters reports, CEO Thorsten Heins retained his previously-expressed optimism about the company's future; shareholders appear skeptical though.
This was the first annual meeting for Heins since he took over control of the company, and the CEO did his best to dispel persistent rumors that the company was close to a sale or breakup. Heins acknowledged investors' discontent but maintained that the current executive team was hard at work to transform RIM into a "lean, mean hunting machine."
That leanness will likely take the form of significant reductions in both RIM's product offerings and its operational size. The BlackBerry maker has already purged its executive rolls and has been making cuts to other areas of its operations, all in an effort to save $1 billion this fiscal year.
According to Heins, RIM will undergo a transformation over the next few months: from an inefficient organization with more than 20 handset offerings to a slimmer group focused on high-end and mid-range devices. Next year will likely see the release of two models, one a touchscreen device and the other a model with a hardware keyboard more in keeping with the BlackBerry brand.
RIM's market struggles are well-documented, and the company does indeed face dire straits; but there have been some positive signs. While its most recent financial statement brought news of a half-billion dollar loss, it also brought news that BlackBerry's subscriber base had actually grown by eight million in the previous quarter. RIM also enjoys growing popularity in developing markets, and the company will be looking to capitalize on that as it moves forward. Shares of the BlackBerry maker fell five percent following Heins address to the assembled shareholders.
Fresh-Faced Recruit
Joined: 11-28-08
It must be miserable for a company to grow subscriber base and still lose money. That almost confirms that a turnaround will be a long time coming, if ever. :\