After a bruising year and growing calls for their resignation, Jim Balsillie and Mike Lazaridis, the co-chief executives and co-chairmen of BlackBerry maker Research in Motion, announced Sunday they were stepping down from their posts and would be replaced by a new CEO, RIM veteran Thorsten Heins, on Monday.
Lazaridis founded RIM in 1985 and, together with Balsillie, oversaw its growth into a multibillion-dollar company in Waterloo, Ontario, that claimed $20 billion in sales last year and, in the early part of this decade, helped pioneer a new class of devices that was at the forefront of the smartphone revolution. RIM's BlackBerry smartphones, which preceded the iPhone by four years, helped make on-the-go email and Web access the rule not the exception among executives. The signature device proved so addictive it earned its own nickname, the CrackBerry.
Yet the company's fortunes have declined steadily in recent years in the face of an onslaught from competing devices such as Apple's iPhone, and Google's Android software, which now powers more than 250 million devices worldwide.
And 2011 was a particularly bruising year for the BlackBerry maker. Last year, Balsillie and Lazardis oversaw a 75 percent drop in the company's stock price. The company's share of the U.S. smartphone market declined by nearly half from January to November 2011, from 30.4 percent to 16.6 percent. Over the same period, Android's share jumped from 31.2 to 46.9 percent. RIM also suffered crippling network outages that left millions around the world without messaging services for days. And the company's attempt at a rival to the iPad, the BlackBerry Playbook, was a disappointment for the company, a flop that it has been forced to offer at steep discounts.
But RIM's new CEO, a four-year veteran of the company, may not provide the breath of fresh air the company needs.
Heins, 54, has worked at RIM since 2007 and most recently served as one of the company's chief operating officers, overseeing the company's hardware, software and sales. The New York Times noted that Heins "pledged during an interview on Sunday to follow the strategy Mr. Balsillie and Mr. Lazaridis set in place" -- a strategy that has so far yielded a series of losses and damaging delays for the company. Before joining RIM, Heins spent more than two decades at Munich-based Siemens, where he rose through the ranks to become chief technology officer.
Balsillie and Lazaridis will stay on the sidelines of the company, with Lazaridis assuming the role of vice chairman and head of the board's newly created innovation committee. Balsillie will not have an operational role, but will remain as a member of RIM's board. According to Bloomberg Businessweek, Lazaridis said Sunday that he would provide counsel to Heins and work closely with the new CEO, news that will no doubt cause worry to some investors.
Last June during an earnings call, Balsillie and Lazardis congratulated each other on their performance as co-CEOs, suggesting that, despite criticism from investors, they planned to stick it out in their roles.
"Jim and I have the perfect balance to make the hard decisions," Lazaridis said, according to All Things D.
Their optimism did little to reassure investors, however, and in December, RIM shareholder Jaguar Financial Corp. issued a press release calling for a "substantial corporate governance change and for a sale of RIM."
"At this point we believe investors have lost faith in the ability of the RIM management team to carry out a proper game plan to restore value. Unless the independent directors push to replace management or change RIM's strategic focus, Jaguar believes that the road map to value restoration lies in a sale of RIM whether as a whole or in separate parts," Jaguar chairman and CEO Vic Alboini said in the release.
Balsillie and Lazardis claimed on Sunday in a group interview with reporters that the leadership change had been part of a succession plan formulated the previous year.
"There comes a time in the growth of every successful company when the founders recognize the need to pass the baton to new leadership. Jim and I went to the board and told them that we thought that time was now," Lazaridis said, according to Reuters.
Heins now faces the challenge of ensuring that RIM's next great white hope -- the forthcoming BlackBerry 10 operating system that is to power new smartphones and tablets -- helps usher in the turnaround RIM so desperately needs. Already, the production of BlackBerry 10 has experienced delays. Lazaridis acknowledged in December the first BlackBerry 10 smartphones would not be released until the second half of 2012, which gives rivals plenty of leeway to prep the competition.
Take a look through the slideshow to see how Twitter reacted to the news that RIM had replaced its co-CEOs.