RIM faces angry investors, searches for new board
BlackBerry maker is confronted by disgruntled shareholders, as it votes to keep its current board of directors while confirming its search for more-qualified people to serve.
Troubled BlackBerry maker Research In Motion faced shareholders at its annual meeting today, where it voted to keep its existing board of directors. But the company also confirmed that it's using a professional search firm to help it find more-qualified board members.
RIM Chairwoman Barbara Stymiest answered a question from RIM shareholder Vic Alboini, CEO of Jaguar Financial, asking whether RIM has hired a search firm to help it find better-qualified board members. Stymiest confirmed that the company is conducting a search.
RIM shareholders approved the 10 members of the board who were currently standing for re-election. But shareholders "withheld" more than 20 percent of the votes on 5 out of 10 directors.
Alboini noted during the meeting that the withheld votes indicated shareholders are not satisfied with the current board.
"Clearly, this is not an overwhelming approval for each of the directors," he said.
Indeed, another shareholder commented during the question and answer period that he was "extremely irritated" with the long-term shareholders on the board that allowed the company to fall into the trouble in which it finds itself now.
Stymiest attempted to assure shareholders that RIM is trying to recruit more directors for the company's board.
"We understand the gaps that the board has," she said.
RIM has been struggling for several quarters now to keep up with competitors Apple and Google, especially in key markets such as North America and Europe. Last month, RIM reported that it lost $518 million during the quarter. And quarterly sales plummeted 33 percent year over year to $2.8 billion. Shipments of its BlackBerry smartphones also fell 41 percent compared with a year ago. The company announced it was laying off 5,000 employees.
Much of RIM's decline can be attributed to missteps and misfires in the launch of its products. The company has not had a hit device in years. And its new BlackBerry 10 software has been slow to ship. In fact, the company announced on its most recent earnings call that the BlackBerry 10 software would be delayed until the first quarter of 2013.
CEO Thorsten Heins tried to assure shareholders during the meeting that BlackBerry 10 is the company's "No. 1 priority." And he said RIM is "working around the clock" to ensure that it gets the software right. He said that even though he had hoped to get products out earlier, the company's carrier partners had actually said they preferred a first quarter 2013 ship date for BlackBerry 10 devices to ensure their 4G LTE networks are more fully deployed.
Heins provided few details about the upcoming devices that the company hasn't already stated publicly. But he did say RIM will initially focus on delivering a high-end, full-touch-screen device for BlackBerry 10. But he added that a BlackBerry 10 device with a QWERTY keypad will be launched in "close proximity" after the touch screen device is brought to market.
"BlackBerry already owns the QWERTY experience," Heins said. "But we need more work on the full touch-screen experience. That's why we are addressing the touch-screen experience first."
Additionally, Heins said RIM will continue to push its entry-level BlackBerry 7 devices, such as the BlackBerry Curve, to fill out its low-end and midrange offerings. The BlackBerry 7 will continue to be used in these lower-end devices until BlackBerry 10 software can be expanded to the entire BlackBerry portfolio, he said.
Additionally, Heins said RIM will continue to cut costs and "streamline" its production to be more efficient. He said the company is in the process of reducing the number of devices it makes as well as the number of manufacturing plants used to make its BlackBerry products.
Heins also said RIM is looking into licensing some of its technology to other companies. For example, he said that its BlackBerry 10 operating system and the BlackBerry Messenger instant messaging technology could be licensed to third parties. He said other markets, such as the auto industry, offer good opportunities for licensing RIM technology.
Heins said there is still much work ahead for the company as it tries to turn around its situation.
"I can assure you that I am not satisfied with the performance of the company over the last year," he said. "And since I took over the role as CEO, I've been working intently to understand the challenges that must be overcome and set a path for the future."
The question now is whether RIM has enough time to overcome those challenges. There has been talk of the company being sold. But neither shareholders nor executives at the meeting brought up the issue. Heins said RIM has plenty of cash to weather the storm. And though he expects the next few quarters to be difficult, he said he was confident that RIM will find its way back to strong growth.