RIM leaders face the music at AGM

 

WATERLOO, ONT. As Research In Motion Ltd. wrapped up its annual general meeting here on Tuesday night and the 700 or so attendees filed out, the sounds of Bob Segers classic tune “Against the wind could be heard wafting over the speakers.

It was an apt music selection for Canada’s technology champion at a time when the company is facing one of its darkest hours and the strongest headwinds in its history.

On Tuesday, RIM revealed it plans to launch seven new BlackBerrys later this year including the previously announced BlackBerry Bold 9900 ” however, a much-anticipated changeover to a new operating system won’t happen until 2012.

Earlier in the evening, RIM’s co-chief executives and co-chairmen Jim Balsillie and Mike Lazaridis stood united behind a podium emblazoned with the BlackBerry maker’s logo as they faced questions and criticism from analysts and shareholders about the current trajectory of the Waterloo, Ont.-based company.

Shares of RIM are down nearly 60% over the past 12 months, as product delays and increased competition from rival devices from Apple Inc. and Google Inc. have eaten away at the BlackBerry’s dominant position in the smartphone market.

As a result, RIM’s top executives are facing mounting pressure from analysts and shareholders to restructure the leadership of the company, including the possibility of splitting the co-CEO and co-chairmen titles currently held by Mr. Lazaridis and Mr. Balsillie.

RIM is also facing pressure for its board to take on a more active role in the operations of the company, with some observers saying the company should appoint a chairman independent of Mr. Balsillie and Mr. Lazaridis to help ease a turnaround at RIM.

Making matters worse, on Tuesday, prominent Bay Street financial analyst Mike Abramsky issued a report suggesting RIM should be split in two if the company fails to successfully transition its BlackBerry smartphones to the QNX operating system that currently powers its PlayBook tablet device.

We are not perfect, but we give our very best every day, Mr. Balsillie said in response to a question from the audience on Tuesday night.

“We literally don’t take a day off.

Earlier this year, RIM was forced to cut its near-term profit outlook due to slumping BlackBerry sales caused by a series of product delays. On Tuesday, Mr. Lazaridis said RIM is on the verge of the largest product rollout in its history with seven BlackBerry devices expected to launch later this year, including the new BlackBerry Bold 9900 which is due out later this summer.

However, the Bold 9900 will run on the BlackBerry 7 operating system. Analysts say that in order for RIM to regain its footing as a dominant player in the smartphone market, it needs to begin producing BlackBerry smartphones running on the QNX operating system.

On Tuesday, RIM revealed that the first QNX-powered BlackBerrys will not launch until 2012, even though there was some previous speculation that the first BlackBerrys on the new operating system might arrive in stores later this year.

RIM said the first editions of the PlayBook tablet that are capable of accessing the Internet via a cellular connection will be available in September.

On June 30, RIM said it would create a committee to examine possible changes to its corporate structure, including the possibility of separating the chairman and CEO roles after Northwest and Ethical Investments threatened to put forth a motion to consider the changes at the AGM. As a result, NEI agrees to withdraw its proposal.

Eight of the nine members of RIM’s board of directors including Mr. Balsillie and Mr. Lazaridis were re-elected for another 12-month term on Tuesday night.

Claudia Kotchka, an independent consultant for Fortune 500 companies, was elected to the board and will replace James Estill.

According to Mr. Abramsky, managing director of global technology research at RBC Capital Markets, splitting RIM into two distinct businesses  The BlackBerry Network and RIM Smart Devices would separate each from different market forces and could make them more attractive to potential acquirers.

He also said the breakup will also give them the ability to expand and to innovate far more freely than as a single entity.

RIMs end-to-end solution was conceived when data devices and networks were nascent Mr. Abramsky said.

But times have changed.