Is Thorsten Heins the Next Steve Jobs? RIM Investors Should Hope So

On Sunday night, Research in Motion’s (NASDAQ: RIMM) co-CEOs stepped down from their positions and Thorsten Heins was appointed to replace departing Jim Balsillie and Mike Lazaridis. To investors in RIM, this may initially have been seen as a tremendous relief. Yet, the resulting sell-off on Monday and Tuesday may have indicated that investors were far from satisfied with the new administration.

Although RIM was a great stock to own between 2003 and 2008, the stock has been steadily selling off since then—never again regaining the high seen during the summer before the financial crisis. Within the last year, RIM shares have lost nearly two-thirds of their value, as shares of the company have traded down from near $60 to a current value of around $15.

Before his promotion, Heins had served as the company’s Chief Operating Officer, and before that he worked for Germany’s Siemens. At worst, investors may have seen the move as simply “rearranging the chairs on the Titanic.” With Heins having been among the top management of the company for years, he may have been partly responsible for RIM’s recent decline.

RIM’s failure may have been due to its inability to withstand the competition brought on by Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG). Perhaps not so coincidentally, the first generation iPhone went on sale roughly one year before RIM’s stock hit its all-time high.

Arguably, RIM invented the smartphone category, but has been unable to capitalize on it in recent years. RIM has steadily given away its share of the consumer market to the iPhone and the lineup of phones running Google’s Android OS.

BlackBerry’s focus on business users has allowed the company to stay afloat, as the iPhone and Android have been mostly confined to the broader consumer base. Yet, some companies have begun testing the iPhone for future use in business environments—which could be seen as a tremendously grim sign for the company.

Further, with Microsoft (NASDAQ: MSFT) about to enter the market with Windows 8, the competition RIM faces seems only likely to increase moving forward.

Heins stated that he would first look to bring on a Chief Marketing Officer, perhaps indicating that polishing RIM’s image would be his primary intention.

Still, is it too little, too late for RIM?

At this point, a turnaround in RIM may be extremely difficult. Yet, RIM bulls may point to Steve Jobs and Apple as an example of a successful tech turnaround.

The smartphone market carries a degree of synergy. With more operating systems in existence, it is more difficult for developers to make their applications work across all platforms. How many different smartphone ecosystems can the market sustain?

Those bullish on RIM may be hoping that the market can squeeze in one more. Still, there may be other ways in which RIM can provide value.

RIM has a patent portfolio and a manufacturing business that it could leverage in a sale. Rumors had circulated that Amazon (NASDAQ: AMZN) had already inquired about the potential of purchasing the company.

Heins discounted that outcome on Monday, although some investors with appetite for risk may wish to consider such a possibility.

Regardless, with the change in management and continued evolution of the sector, RIM’s stock could be at a pivotal inflection point.

Important Note

Content, including research, tools and securities symbols, is for educational and informational purposes and should not be intended as a recommendation or solicitation to engage in any particular securities transaction or investment strategy. You alone are responsible for evaluating which securities and strategies better suit your financial situation and goals, risk profile, etc. The projections regarding the probability of investment outcomes are hypothetical and not guaranteed for accuracy or completeness. They do not reflect actual investment outcomes and are not guarantees of future results, and do not take into consideration commissions, margin interest and other costs that will impact investment outcomes. Content may be out of date or time-sensitive, and is subject to change or removal without notice. Supporting documentation for any claims made in this post will be supplied upon your email request to editor@zecco.com.

At the time of distribution of the material contained herein, neither Zecco Trading nor Zecco Forex was a market maker or acted as the contra-party for customer transactions through the firm’s principal accounts for the securities discussed.

Zecco Holdings, Zecco Trading, Zecco Forex, and their officers/partners/employees may hold a nominal financial interest in any of the securities discussed herein, with the nature of the interest consisting of, but not limited to, any option, right, warrant, future, long, or short position.

Neither Zecco Trading nor Zecco Forex has participated as a manager or co-manager in public offerings of the securities mentioned herein within the last twelve months.