As far as annual general meetings go, Research In Motion's, held Tuesday in Waterloo, Ont., wasn't much different from the norm. Financial results from the most recent fiscal year were reviewed in detail. A new 10-member board of directors was elected. Shareholders got a chance to direct often-pointed questions at the newly anointed leaders. The company got a chance to explain where it is, how it got there, and how it plans on making the next year — and the years that follow — better.
Standard stuff for any company. But RIM is hardly a standard company. And it's hardly been a standard year. With market share continuing to erode amid withering demand for existing products, intensifying competition, and share values continuing to sink, this was as atypical an AGM as RIM has ever hosted.
A leaner future
So the typical trappings of success were off the table at this year's meeting. No catered snacks — bottled water only — and attendees buzzed about the company's just-announced decision to axe one of its corporate jets. Never mind that the resulting savings — the nine-seat Dassault SA F50EX is expected to fetch between $6 million and $7 million — are a drop in the billion-dollar bucket the company hopes to save in the coming fiscal year. It's the optics that count, and RIM's been sweating every last detail for the past month to ensure its transition-focused message is heard loud and clear.
A core detail was CEO Thorsten Heins. Six months into his corner-office tenure, the AGM gave him a prime opportunity to roll out his now-completed leadership team, including a new chief marketing officer (Frank Boulben), chief operating officer (Kristian Tear) and chief legal officer (Steve Zipperstein).
But first, a mea culpa for the hundred or so shareholders in attendance. Many of them, concerned about a stock that's erased over 90 per cent of its value in two years, came armed with pointed questions about board makeup, BB7-to-BB10 survival plans and even Heins's salary negotiations. They weren't happy, and Heins didn't mince words.
"Over the past year, our shareholders, employees and communities have had to deal with numerous challenges and significant changes," he said. "I want to assure you I am not satisfied with the performance of our company over the past year."
Neither were shareholders, with an estimated 15 to 20 per cent - final numbers have not yet been published — voting against the incoming slate of directors. One shareholder even chided the new board for being too heavily loaded with members who predate Heins's takeover as CEO.
"Why did they let it get out of hand so badly and so much before they did something about it?" the shareholder asked. "I don't think that any of the old directors of the company should sit here today to be a director."
"We understand it is not unanimous," Heins said. "Many of you are frustrated with the time it has taken us to make our way through this transition."
More red ink to come
With about six months left until new devices based on the BlackBerry 10 are launched, Heins set sobering expectations for the near future.
"We do expect the next several quarters to be very challenging," he said, specifically citing growing pressures on average selling price (ASP) and reduced monthly service revenue fees as key areas of concern. "We are aware of this and we are planning for this."
Against that backdrop, other members of Heins's executive team expressed optimism that the company is already beginning to turn the corner.
"There's a lot of new energy in the organization, and a big culture shift that Thorsten is bringing to the fore, as well," says Rick Costanzo, executive vice president of global sales. "It's one of accountability and empowerment."
Costanzo says before BB10 launches, the current BlackBerry 7 operating system has plenty of life left in it. The company announced two updated handsets on Monday, and has a number of updated phones set for release through the year.
"I think we've got a really well articulated, thoughtful plan," Costanzo said. "It's going to be a tricky transition, don't get me wrong. But we've got a plan to deal with it. BlackBerry 10 is really going to be BlackBerry renewed. This is not just a new handset operating system that we're launching. It's a platform."
Costanzo says the relatively immature state of the global smartphone market plays in RIM's favour. Canalys data for 2011 shows smartphones accounting for approximately 30 per cent of total handset sales, which leaves plenty of room for future growth as demand shifts over from basic feature phones.
"We still believe there is a lot of runway and a lot of time left on the game clock," says Costanzo. "It doesn't mean we can be apathetic about that. We've got to be very focused and we've got to make sure we deliver very quickly and with the best degree of quality possible."
Carmi Levy is a London, Ont.-based independent technology analyst and journalist. The opinions expressed are his own. firstname.lastname@example.org