In an article published in yesterday's Bloomberg News, Marty Wolf was quoted on his views of the January 22 appointment of Research in Motion's new CEO Thorsten Heins.
Heins, a RIM insider who has served as the company's COO since 2007, succeeds Co-CEOs Jim Balsillie and Mike Lazaridis, who have come under criticism as Apple Inc. (AAPL) and Google Inc. (GOOG) have pulled ahead of RIM in U.S. smartphone sales in recent years.
RIM stock slid 8.5 percent to $15.56 yesterday at the close in New York, the biggest drop since December 16. Over the past 12 months, the shares have fallen 75 percent.
Said Marty Wolf of the appointment, "The longer the new CEO operates the business with the current mandate, the more value he will destroy."
As we have always noted at martinwolf in our advice to companies seeking to create enterprise value, what you do in the market matters and growth for growth's sake is not enough.
Many companies are lured into growing revenue by pouring resources into the markets of today, the now markets. While it may seem smart - and it always seems safe and familiar - it's actually a high-risk game. Today's markets, especially in technology, can rapidly give away to new markets.
In our view, this is exactly what has happened to RIM. Blackberry devices captured the market because they were great email machines at a time when the market wanted email more than anything else. But RIM failed to evolve its Blackberry platform as the market changed, and now the Android and iPhone platforms have taken away a market that RIM once dominated.
The Bloomberg News article pointed out that RIM's revenue declined in last year's second and third quarters and net income dropped in each of the first three periods. The company is expected to report decreases for both for the final three months, according to analysts' estimates compiled by Bloomberg.
"People are voting with their feet," said Marty Wolf in the article. "It's clear to me the company can't stay independent."
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