RIM (Research in Motion) CEO Thorsten Heins talks on the current state of BlackBerry and how it fell from grace, what the company is doing to ensure things in Waterloo don’t get worse, and the product delay problems that have plagued RIM.
These are dark days for the former king of mobile. But Thorsten Heins, RIM’s CEO isn’t throwing in the towel just yet. With a major mobile platform launch expected in early 2013, Heins is optimistic that RIM and BlackBerry will turn things around. But he’s also realistic about the significant challenges his company is facing.
Heins talks here about the company’s challenges, what went wrong at RIM and how he plans to revive the company to make BlackBerry 10 a suitable rival to iOS and Android.
Q: Just a few years ago, RIM was the undisputed king of the mobile market. Today, its CEO is writing editorials to convince stockholders that RIM is “not dead or dying.” How did the tide turn so quickly? From your perspective, what did RIM not do that it should have done during the past few years?
A: There was a strategy deployed that said, let’s take RIM global, and let’s really go for the global smartphone market. Remember, in 2007, 2008, 2009, the market just opened up, and BlackBerry had kind of created what would later be called the smartphone segment. That meant we had to build a regional portfolio and had to really go after the market. And that led to undeniable success of the company.
What also happened, in the U.S., was the drive to 4G started, and it got accelerated. Carriers were actually leapfrogging from what they wanted to do with 3G, like HSPA+. They leapfrogged and put a lot of investment into 4G LTE. I think we weren’t ready for it. We were busy building our global portfolio. We had a slightly different view on when the LTE rollout would happen. And we made a decision to focus on the rest of the world, which led to some very high numbers, but then, consequently, led to us not being focused on the new, innovative technologies in the U.S. The U.S. regained the lead in mobile technology by doing this. So it was not just that the company was not getting it, it was really that the whole market in the country regained a technology lead in the world. That’s a big step.
The BlackBerry OS that we have today is a good and solid platform that allowed us to create everything that we did. But given our understanding that mobile computing would now be at the same level as laptops, with dual-cores, quad-cores, high resolution graphics, GPUs, we needed a new platform. That’s why we decided to build the mobile computing platform which today we call BlackBerry 10.
Q: Something I hear very often is that RIM “failed to innovate” and that a “lack of innovation” led to the fix that RIM’s now in. Is it that simple? Did RIM fail to innovate?
A: I would not say that we failed to innovate. RIM is still a very innovative company. BlackBerry 10 will absolutely prove this. I think that the reason is something else. We had a very, very successful recipe of what BlackBerry was all about. There where four main pillars; battery life, typing, security, and compression. Then there was a shift with LTE. With LTE it was important actually not to save network resources, it was important to load the networks, to sell data plans and sell data volume. We didn’t miss on innovation. I think we missed on understanding, specifically in the U.S., that this trend was shifting, and that our positioning and our value proposition in the U.S. market was not following that trend shift.
Q: In your opinion, how significant have product delays been to RIM’s current situation in the market? Why have we seen so many product delays from RIM during the past few years?
A: Part of it actually goes back to your last question. We are a very innovative company, we were and we are. What sometimes happens is, you get so excited about innovations that you push them into existing development projects. And what I’ve learned in my discipline, in my 25 years in R&D and in telecom, once you have decided on a project, you must keep it stable. With our eagerness to be extremely innovative, we had the tendency to put new stuff into existing project programmes, and that is not a recipe to deliver on time and on quality.
We’re dramatically changing this with BlackBerry 10. We’ll continue to innovate, but we have a clear understand of what BlackBerry 10 is all about. And we keep that programme very, very focused.
The delay of BlackBerry 10 is not because we added stuff to it. The delay is because our software groups were actually so successful in coding the various feature components and building blocks that when we put them into the main “trunk line,” as we call it, when we wanted to build the first main release, we got overwhelmed by integration efforts. I had to make a decision. I could actually have kept the schedule, if I had made a sacrifice on quality and on platform stability. And I decided not to do that, because I need to make sure that when we deliver a BlackBerry, it is best quality.
Am I disappointed that we had to shift it into the first quarter? Yes, I am. But the point is, it was a decision between: Rush it out again, and then fix the quality stuff later; or bring it out with high quality. What I commit to the public out there is that when we ship BlackBerry 10, we will do it at high quality. That was the decision I made.
Q: The general message of your recent editorial, and your message in your BlackBerry World keynote address in May, is that you understand BlackBerry stock holders’, customers’ and users’ frustration, but that they should keep the faith and their patience will be rewarded. But how long do they have to wait for RIM to prove it is still in the game?
A: Faith in RIM and the financial expression of that are two different things. I’m not happy with the situation at RIM either. Who can be happy and satisfied with where we are? What I am satisfied with is that I know we have a path to the future with BlackBerry 10, because I see it.
In January with the full touch device and the QWERTY coming, I think we will reinstall faith in RIM. That’s what we’re working on. This is what our objective is, and when I’ve talked to carriers about the delay of BlackBerry 10, the overwhelming feedback was, “First, thank you for letting us know in advance. Second, Q4 is mostly a prepaid quarter anyway, lot of noise coming, actually why don’t we focus on a Q1 [2013] launch and make this a major launch in Q1?” I think we have a lot of support there.
