Research In Motion Ltd. isn’t in a “death spiral,” Chief Executive Officer Thorsten Heins said Tuesday, defending the BlackBerry maker after it delayed the release of a new phone, reported a loss and cut almost a third of its workers.
“The way I would describe it, we’re in the middle of a transition,” Heins told the Canadian Broadcasting Corp. in a radio interview. “This company is not ignoring the world out there, nor is it in a death spiral.”
[RIM operates a research and development office in the Research Triangle, N.C. area. The company has declined to comment about what impact layoffs and cost cutting will have on that operation.]
RIM (Nasdaq: RIMM) shares tumbled 19 percent on June 29, the day after the company delayed for a second time its BlackBerry 10 phone, cut 5,000 jobs and posted a quarterly loss that was five times bigger than projected. Sales last quarter plunged 43 percent as RIM’s share of the global smartphone industry fell by more than half to 6.4 percent in the first three months of the year, according to research firm IDC.
RIM has struggled to keep up with Apple Inc.’s iPhone and devices based on Google Inc.’s Android platform, prompting customers to flee the BlackBerry platform.
The company, based in Waterloo, Ontario, had been waiting for a release of the first BlackBerry 10 phone in the fall to decide on its strategic options, betting that the success of the product would let it avoid a sale, two people familiar with the situation said last month.
‘Huge Support’
Heins told the CBC that while the company could have rushed out the new phone, RIM wants to make sure its new operating system will last “for the next 10 years.”
“The next quarters are going to be difficult,” he said. “But I am positive when we launch BlackBerry 10 there will be huge support from our carrier partners, our enterprise customers and we will reemerge, specifically in the U.S. and Canada, as a very strong player.”
RIM fell 2.3 percent to $7.32 at 12:23 p.m. in New York. The shares had dropped 74 percent in the past year through Monday.
RIM is racing to finish the BlackBerry 10 platform even as it evaluates options that may mean a sale of the company. The BlackBerry maker in May hired JPMorgan Chase & Co. and RBC Capital Markets to help evaluate options including licensing its software, or seeking a strategic partner.
Asked by CBC what his reaction would be should the board suggest splitting up the company as some investors have called for, Heins said he would have to discuss the matter with them.
“We are looking into all options,” Heins said. “At the end of the day it’s about creating long-term shareholder value.”