Research In Motion executives faced a slew of questions, but no fireworks at the company's annual shareholders' meeting Tuesday, as they warned of more "difficult" times ahead.
Coming just two weeks after RIM announced a US$518-million loss in its latest quarterly results and unveiled plans to cut some 5,000 job cuts as a result, RIM board chair Barbara Stymiest said the company is nevertheless poised to turn its fortunes around.
"We believe the company's executive team is well positioned to lead the company forward to face its current challenges and pursue the opportunities that lie ahead," Stymiest told the approximately 250 attendees at the meeting in Waterloo, Ont.
In his comments, CEO Thorsten Heins said the BlackBerry-maker is forging ahead with plans to release its next-generation BB10 operating system in the first quarter of 2013.
"The past year has been very difficult for RIM as we make the change to a whole new platform," he said.
"I want to assure you I am not satisfied with the performance of the company in the past year," he added, sharing his expectation RIM will post another operating loss in the next quarter as well.
The "difficult transition" will continue, he said, as the company works to overcome "integration" challenges with the operating system touted as the company's hope for catching up to the touchscreen-centric competition that customers have been leaving their BlackBerry devices for.
Heins admitted the delay was less than ideal, but told the audience, "I will not deliver a platform to market that is not ready to meet the need of our customers ... There will be no compromise on this issue."
Heins and company promised though that the new BB10 will be a hit with consumers when it’s released next year.
“We will be competing in the smartphone category with the iPhone, with Android and with other devices,” said the company’s new chief marketing officer Frank Boulben.
Addressing the widespread speculation RIM will not survive the delay, Heins assured investors that the company's carrier partners around the world are all willing to wait.
"They all embrace BlackBerry because we have an installed base with them," he said, adding that they are motivated to not only retain that base, but expand it.
Nimble, lean and mean
Until the company delivers its promised "outstanding" user experience next year, Heins said it continues to make a number of moves to cut costs and streamline operations.
Besides the job cuts -- which Heins said RIM wouldn't pursue "if we didn't think it was necessary" -- the company is cutting the number of manufacturers that supply its devices from ten to three, as well as reducing "layers of management."
The company that will emerge from this transition period, he said, should be both "nimble" as well as "lean and mean."
"We recognize that this is a difficult period for our shareholders and many of you are frustrated with the time it is taking us to make our way through this transition," Heins said before opening the floor to questions.
During the meeting RIM’s board of directors were re-elected, although many shareholders opposed the decision.
Around 15 to 20 per cent did not support the move, calling for the removal of the board’s veteran members.
Yet the expected investor anger never materialized, with the most heated moment coming when someone took the microphone to say he was "extraordinarily" irritated that RIM let its problems get so out of hand.
"I don't think any of the old directors of this company should sit here today as directors of this company," he said, to a round of applause from the audience.
Stymiest asked if the man had a question, to which he replied it was more of "a comment." So the proceedings moved on without a direct response from any of the executives on hand.
Heins easily stickhandled the other questions, which ranged from executive compensation to retailer restocking practices, including one that demanded to know why the company was not dipping into its $2 billion cash reserve to speed the release of its BB10 platform.
And why, the investor asked, has RIM not shown the public more of what it can actually do?
The operating system is "so unique and so special," Heins replied, that, "we want to keep it contained for a further little while."
The company is not cutting any corners on the BB10 development, Heins continued, explaining that if it would help he would rather spend the company's money on development than take it to the bank.
Tech analysts weigh in
Technology and business analysts say RIM’s plans to withhold BB10 could help the troubled company.
Andy Walker, a technology analyst from Cyberwalker.com told CTV News Channel that he believes the decision to withhold the phone was a smart one, as he believes this is the company’s last shot at turning its fortunes around.
Walker said that if the former phone giant doesn’t produce a spectacular product that can compete with its rivals, “RIM is dead.”
“They have one shot at this, time is running out. And they need to have, if not a winner, at least something that doesn’t stink so that they can either be acquired or at least gain some traction back,” he said in an interview Tuesday.
Walker predicted that the chances of the company being acquired are “very high,” unless Heins can live up to his promises.
“He needs to demonstrate that they’ve got something viable worth buying and they need someone with some deeper pockets who can bail them out and take them into the next 10 years,” he said.
Walker said possible buyers of the beleaguered firm could be Hewlett-Packard, Facebook or Microsoft.
After watching the shareholders' meeting, Queen's University business professor John Pliniussen said there’s a lot riding on RIM releasing a glitch-free, feature-rich platform when it’s finally ready. But in the meantime, he says he gleaned little from Tuesday’s meeting to bolster his faith the struggling tech company can make it to the BB10 release.
The day’s only positive news, he told CTV News Channel, was word of the company's cash reserve and its 78-million strong user base.
"(And) with that you're losing a half billion dollars," Pliniussen said, suggesting at that rate the company will quickly exhaust its savings.
Pliniussen said he was hoping to hear some of what investors at any annual meeting are looking for.
"We need some confidence, some clarity about the future direction and some hope that there's cash in that future, and we really didn't get any of that today," he said, suggesting RIM's reliance on emerging markets may not pay off as it expects.
"The only growth is in markets overseas, and competitors are going to come in and erode that base."
RIM stock continues to trade near a nine-year low. By Tuesday afternoon the company’s stock was changing hands on the Toronto Stock Exchange for $7.44 a share. At one point in the past year, the stock was trading at $32.71 per share.
