TORONTO/LONDON (Reuters) - The new leader at Research In Motion on Monday dismissed talk of drastic change at the BlackBerry maker, a declaration seized on by impatient investors who say Thorsten Heins has only 12 to 18 months to turn RIM around.
Takeover talk, swirling around RIM for months, picked up steam as Heins took the helm at a once-dominant smartphone company that now struggles to compete. But RIM's shares tumbled more than 8 percent as investors wondered whether Heins could reverse RIM's decline.
"I don't think that there is some drastic change needed. We are evolving ... but this is not a seismic change," said Heins, who joined RIM in 2007 and previously served as a chief operating officer.
RIM's co-CEOs Mike Lazaridis and Jim Balsillie, the men who engineered RIM's rise, resigned on Saturday after intense investor pressure. Their presence had been seen as a big obstacle to a possible sale of the company, although Heins insisted that was not an option he was considering.
Shareholders and analysts have grown impatient in recent months and calls for Lazaridis and Balsillie to step aside had reached a crescendo. RIM has lost market share and market value after being comprehensively outplayed by Silicon Valley tech giants Apple and Google.
"If Thorsten really believes that there are no changes to be made, he will be gone within 15 to 18 months. He will be a transitional CEO and this will be a transitional board," said Jaguar CEO Vic Alboini, who leads an informal group of 16 RIM shareholders calling for a radical restructuring. The group holds a little less than 10 percent of RIM's stock.
Lazaridis and Balsillie - two of RIM's three largest shareholders with more than 5 percent each - will remain board members, while Lazaridis will also head a newly created innovation committee. Their new roles suggest continuity was a goal in the transition.
Critics have called for a new leader who can rejuvenate both the design and operational sides of the business, or prepare it for sale to one of a raft of rumored buyers.
Heins, a former Siemens AG executive, said during a conference call on Monday that he would hone rather than abandon current strategy at RIM, which after years of massive growth needed to start operating like a mature business, not a startup.
The new CEO, who scored his last major promotion as RIM was shedding some 2,000 jobs last June, said no further job cuts were currently planned and that with RIM's $1.5 billion in cash he had no qualms in spending on the right projects.
"If I have a great strategic project or a good business case I can go to the board anytime and ask for approval for additional investment and the money's in the bank to do this," he said.
Analysts were cautious.
"People may have been a little disheartened that he was defending the current RIM strategy," said Morgan Stanley analyst Ehud Gelblum. "I think (investors) might have wanted to hear a mea culpa."
"People would have been happier hearing 'we are on the wrong path'. We didn't hear a lot of talk about change."
Jaguar's Alboini criticized the retention of Balsillie and Lazaridis on RIM's board and called for several other board members to step down before RIM's mid-year annual meeting.
"If we're wrong, prove us wrong," Alboini said in an interview, referring to the group of shareholders who support his view. "This group is not going anywhere. This is just putting RIM in a position where it might be able to get back into the game. It's early days."
Barbara Stymiest, a former banking and exchange executive, will replace Lazaridis and Balsillie as the chair of the board. Stymiest, a RIM board member for five years, is also viewed as an insider tied to the old regime.
Heins' immediate concerns are to generate sales of RIM's current lineup of BlackBerry 7 touchscreen devices, deliver on a promised software upgrade for its PlayBook tablet computer by February, and rally RIM's troops to launch the next-generation BlackBerry 10 phones later this year.
But even if he had a credible overall plan to foster change, some analysts question whether RIM had fallen too far behind its competitors to catch up.
Its existing product lineup has struggled to compete with Apple's iPhone and iPad and the slew of devices from Samsung and others using Google's Android operating system. In North America particularly, RIM has hemorrhaged market share during a year marked by product delays and a botched launch of the PlayBook.
"If RIM's going to grow in the U.S. ... they have to have products better than the iPhone or Android," said Pacific Crest analyst James Faucette. As of now, "they don't have products that are competitive with those, let alone better."
But RIM has also shown a renewed seriousness about getting its message delivered, hiring crisis management firm Sitrick and Company as strategic counsel.
Sitrick helps companies in crisis and celebrities navigating scandal. Clients have included Paris Hilton as she faced jail time and Michael Vick, an NFL quarterback involved in a dog-fighting ring. The firm also helped Roy Disney remove Michael Eisner as chairman of Walt Disney.
Analysts circled their calendars for an analyst day in early May as the first opportunity for the new leader to lay out a detailed plan for reversing the decline.
The event "will now become the focal point to the unveiling of Thorsten's vision," CCS Insight analyst Ben Wood told Reuters. "The speed with which you make strategic changes and implement them is absolutely critical because the mobile phone business will not stand still."
"If there are no meaningful signs of an imminent turnaround, then I think the spotlight will turn back on to the assets that RIM holds and who they might be attractive to."
Investors have seized on any rumor of a deal involving RIM as a reason to celebrate, whether talk is of a pact with Amazon as reported by Reuters in December, or with Samsung last week.
Analysts have said logical buyers for RIM also include fellow-struggler Nokia, perhaps with support from Microsoft, and Facebook which is increasingly pushing its content to users via their mobile phones.
If there is no obvious buyer, Heins has more immediate options to add value to the business.
RIM could license its software or integrate its email package, a strategy that many analysts and investors have thought the company might pursue. Heins said it would be wrong to focus on that option but he is still open to discussions.
"RIM have had big challenges in the past and they succeeded in moving from a corporate product to be also a consumer product, to get a foot in the consumer market and very few people expected them to do that," consultant John Strand said.
"Now they have to reinvent themselves again."
RIM's U.S.-listed shares closed 8.5 percent lower at $15.56, for a market capitalization of little more than $8 billion. In the company's heyday, just three and a half years ago, it had a market capitalization around $80 billion.
Additional reporting by Sinead Carew in New York and Andrea Hopkins in Toronto; Editing by Frank McGurty and Janet Guttsman