Analysts weigh in on Thorsten Heins: New CEO but same old problems?
on 23 Jan 2012 04:07 pm
Thorsten Heins is now President and CEO of Research In Motion. The internal structure change alone is something investors have been calling for, but what that means exactly for Research In Motion in the long run remains to be seen.
Analysts have been weighing in on the change since the news broke and while the consensus thus far has been mixed, there is a general feeling that Thorsten Heins isn't exactly going to bring the needed changes to Research In Motion.
Many analysts see Research In Motion's change as a missed opportunity for the company to make some drastic moves at a time when they need it most, while Thorsten is under the belief that internal overhauls aren't needed.
Atlantic Equities’ James Cordwell - New leadership at RIM was clearly required given the co-CEOs had lost credibility with investors after a disastrous 2011. However, initial commentary from the new CEO suggests there is unlikely to be a material change in the company’s strategy, which is disappointing but perhaps unsurprising given he was part of the prior management team. Heins highlighted improved consumer marketing and better execution as his key areas of focus for turning the company around. Whilst we agree that these areas require improvement we fear that RIM‟s problems require more structural solutions.
Barclays Capital’s Jeff Kvaal - Heins is relatively unknown by the investment community. We thought some video clips made available by RIM last night were not particularly compelling - though admittedly they were not likely geared for an investor audience. We also believe RIM missed an opportunity to acquire some outside perspective by turning to Ms. (Barbara) Stymiest and Mr. Heins.
Jefferies’ Peter Misek - 1) By making a break and bringing in new blood RIM is able to start a new chapter. 2) By allowing the Board to become truly independent, RIM and its Board can now have a more open strategic review. 3) This opens the door to other companies who were considering partnering with RIM to reconsider. 4) It allows shareholders to place all of the share price woes on the departing management team. We believe Thorsten Heins, a seasoned Siemens executive, is the smoothest near-term replacement. While it does not necessarily change anything overnight, it does create a fresh chapter and open doors and possibilities.
Stern Agee analyst Shaw Wu - In our view, a CEO with a strong consumer electronics and supply chain background would have been ideal. The fact of the matter is that RIM is a consumer company whether the company likes it or not. We estimate that 60%-70% of its business is consumer vs. 30%-40% for enterprise. What has changed in IT over the past few years is that consumer is increasingly driving innovation and buying decisions. This is one of the key reasons why Apple and Google have been so successful in the smartphone space. We frankly would not be surprised to see RIM implement further senior management changes in the future.
Needless to say, only time will tell what this particular transition will mean to Research In Motion as a whole but we'll be watching very closely as it unfolds as I'm sure many analysts and investors will be. From a personal standpoint though, I'm not sure where this feeling of immediate change stems from -- no matter whom RIM appointed, nothing just happens overnight and rushed changes are never good. We're excited to watch and see what Thorsten can do and wish him the best of luck at it.