Contrary to Popular Belief, RIM Did Not Announce a Management Change

Investors got awfully excited early on this morning in reaction to Research In Motion's (RIMM) announcement of the appointment of Thorsten Heins as President and Chief Executive Officer in place of former Co-CEOs Mike Lazaridis and Jim Balsillie.

RIM shares rapidly traded up to $18.29, 8% above Friday's close.

However, shares have subsequently dropped 14% off that high to $15.80 after one thing became clear -- for RIM, this is a change in name only.

Right off the bat, there's a major problem. Mr. Heins is a RIM company insider, having joined the company as Senior Vice President for Hardware Engineering in December 2007 before becoming Chief Operating Officer in 2011.

And what's more is that RIM's been in a pretty sorry state since then. In fact, RIM shares are down approximately 90% since they peaked in June of 2008, the decline driven by market-share losses to the Apple (AAPL) iPhone and Google's (GOOG) Android.

Interestingly though, one of the key reasons for RIM's decline in the smartphone market was its resistance to a key hardware trend, the emergence of the touchscreen, kicked off by Apple's original iPhone in 2007.

RIM couldn't put together a decent touchscreen smartphone to compete with the iPhone -- but Motorola Mobility (MMI) could, kicking off the Android revolution with the original Droid model, which was released in October of 2009.

As we all know now, Android now has more than half of the smartphone market.

And what else is wrong?

Well, both former Co-CEOs will remain on the company's Board of Directors. Mr. Lazaridis will transition from Co-Chair to Vice Chair, and will also -- please, cue the eye rolls -- serve as Chair of the Board's new Innovation Committee. If you've been paying attention, then you know RIM hasn't exactly, you know, innovated much lately.

This might not ordinarily be a problem, but Mr. Reins has more or less indicated that he'll stay the course in terms of strategy. On this morning's conference call, he said there won't be a "seismic change," and took the idea of a breakup of the company off the table.

So, add it up: The new CEO is a company insider that is determined to stay the course, while the former co-CEOs are still on the board. Why'd they even bother?

My Spidey sense tells me that the company believes it's on the right track, so it floated Mr. Reins as CEO to give the appearance of change without actually changing anything.

At the end of the day, RIM needs an absolutely spectacular phone even more than it needs new management.

As for today, it has neither.

Twitter: @MichaelComeau

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