BlackBerry CEO Thorsten Heins steps down; Fairfax buyout deal canceled

Thorsten Heins's plans for reviving BlackBerry didn't work out.

BlackBerry's current financial situation is entering into a new phase as the smartphone company has announced the departure of its CEO Thorsten Heins and the cancellation of its previous plan to sell itself for $4.7 billion to Fairfax Financial Holdings.

The new plan, according to BlackBerry's press release, is to raise $1 billion of money from Fairfax Financial and other investors, which will be put into convertible debentures. Heins will be replaced by John S. Chen, the former CEO of Sybase, on an interim basis. Chen has also been appointed as the Executive Chair of BlackBerry’s Board of Directors and the press release says that he "will be responsible for the strategic direction, strategic relationships and organizational goals of BlackBerry."

It's unclear exactly what BlackBerry, under its new leader, will do at this stage. There have been rumors that many companies have been considering bids for acquiring BlackBerry, including some talks with Facebook. However, today's announcement would seem to indicate that the company will try to keep going on its own power.

Heins was Chief Operating Officer at BlackBerry in January 2012 when he was brought in to become its new CEO, replacing the company's co-founders Jim Balsillie and Mike Lazaridis. Heins kept the company focused on the launch of its BlackBerry 10 operating system and its new smartphones, but the devices experience poor sales when they launched earlier this year.

Source: BlackBerry | Image via BlackBerry

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And then there were three, in another year a significant number of markets will see Android and WP lead iOS and unless Apple are able to pull a rabbit out of their hat iOS is bound to retreat into the margin within 3-4 years. iOS has the exact same problem BB OS 7 and Symbian had, it's not scalable enough to allow for the hardware to grow with market trends. People will continue to hack around in Android and MSFT made the wise choice to break clear with WP8 to allow for scalability.

Apple may say or want you to believe you do not need proper 16:9 screens even though the rest of the world uses them, it is simply a matter of breaking a vast amount of apps if they were to make the move to such screens.

I think Android will stay ahead just because of sheer numbers and it being dirt cheap, but WP will overtake iOS (as it has done now in several important markets) virtually anywhere within three years. For you US peeps it may be interesting to note that except for the US iOS is well below 20% about anywhere else and mostly around 15% with WP coming into double digits in many markets now.

I think Blackberry has a good chance of survival if they concentrate on what they do best, and that is business applications and software, along with premium well built devices. BB is still the one to go to for solid email and secure systems. BB already has a strong world wide server system, and, the solid software supporting same.

There is absolutely nothing wrong with the QNX based BB10 O/S it works and works well. Any the previous BB 7 and previous versions were clearly not as scalable to meet current application. Like any transition, the rough parts require smoothing, in reality BB10 has not had a whole bunch of issues. Just look at Windows 8 or even Apple's O/S who have had a share of issues. The competition for all, is Android by Google which for me is way too open and not as secure. We need other O/S for competition, otherwise the game is up for all of us.

BB started with their Z10 and followed with a series of other machines culminating with its current Z30. Each of the new generation of BB10s provides strengths and weaknesses but the Z30 is outstanding. The BB Playbook tablet while late simply could not compete with others given its specifications. 1 gb of ram is just too little for BB10, but still the little tablet is well built and operates for what it does.

In the long term I think BB will survive as long as they focus on the right things. A game machine for kids like android or IOS is not the right path for Blackberry.

sdgreen said,
....

I think the accelerometer on the Z10 to be abysmal compared to any other platform.

I can tell when someone is using a Z10 when they shake it repeatedly to get the screen orientation to change.

It had to be done. This guy had two shots, the Playbook generation and the BB10 generation. Both of those failed to bring BB back to its former glory. Strange moves like renaming the company also did nothing for them.

I'm not saying anyone else could have done a better job given the circumstances but if BB is to move forward then they need a new CEO that employees can have faith in again. This guy lost is credibility so there would be no point moving forward with him.

Elop running Nokia made the tough decision this guy could not.. Nokia almost released their Tablet with their own OS which would of destroyed Nokias future much like HP touchpad and BB Playbook..

BB has to just suck it up and switch to Windows phone/ Android now..

Lachlan said,
Elop running Nokia made the tough decision this guy could not.. Nokia almost released their Tablet with their own OS which would of destroyed Nokias future much like HP touchpad and BB Playbook..

BB has to just suck it up and switch to Windows phone/ Android now..

Agreed. At this point they have no choice. Sustaining an ecosystem has become a lot more complex then BB originally anticipated. It can;t be done by one company alone.

Considering how saturated the Android market has become I think its better to go for WP. First of all because companies like Sony now have a smaller overall marketshare then Nokia does. Clearly differentiating is better.

Secondly because with MS purchasing Nokia there is a slot open for 'MS side-kick'. Microsoft in turn needs partners to validate Windows Phone's existence as an operating system for third parties.

Well I hope they can recover, if the smartphone market becomes a 3 horse race things are going to get pretty pricey as all they'll need is a gentleman's agreement if there's no competition left

Ubuntu Touch has a bit of interest as well. Haven't really looked into it though since I switched from a S3 to a Lumia 925 though.

Yes I get that, but the deals were better (at least for everyone I know as well as me) 5 makers competing for your money, and you used to get excellent 12 month deals from O2UK, like I used to £20-£30 a month, latest flagship (granted they were n95's, n86's n8's and such) but now for the iphone5s or lumia1020 or even whatever android flagship is newest, you could be looking at minimum terms of 2 years just to keep the cost of the handset and contract in affordable levels

I'm probably being paranoid, but I just think this is signalling the end of smartphone competition in a few years as one company consumes the other

Nokia has done a pretty good job pushing prices down. The Lumia 520 can be bought for as cheap as $80. And then there's the Nexus line which can be had for $349. The price ranges from $80 to $500+ for buying unsubsidized, which is a pretty good spread with a wide selection of phones.

Dushmany said,
Well I hope they can recover, if the smartphone market becomes a 3 horse race things are going to get pretty pricey as all they'll need is a gentleman's agreement if there's no competition left

Was it every anything else? With the rise of iOS and Android, the others (Windows Mobile , BB and Symbian) went into free fall. So the old three big players were replaced by three new ones: iOS, Android and now also Windows Phone.

Considering how the smartphone as a device for consumers is done evolving the competition will now focus on price by improving the manufacturing process (faster, cheaper). Even Apple has released a mid-range device! So if anything price will continue to go down as these companies have nothing else to differentiate itself with.

I thank you both for trying to put my mind at ease, and I probably am just over reacting, just things like this used to happen all the time in the pre internet age, (late 80's early 90's) and something similar bankrupted the family business, and I can't think of an analogy to insert here, basically I'm thinking the lack of competition is not a good thing.

As for BB getting rid of Thorsten, I can only hope the replacement has a vision that not only his/her team can follow, but the consumers can too

Dushmany said,
basically I'm thinking the lack of competition is not a good thing.

I think three players in this highly competitive environment is enough. There just aren't enough resources for more players. As it is all three can make a nice profit that allows them to continue to invest in product and proces development. In the end we as consumers will only get cheaper and better products because of it.

but before anyone notices there'll be 2
then there'll be one
then we're stuck buying whatever junk the victor decides to peddle on us

Do I believe this will happen? probably not in my lifetime, is it plausible? yes
I'm just for more competition is all. Like for instance
if a third party low to mid range smartphone maker suddenly revives the best parts of BB os, or Symbian os, I'd be interested in their sales figures/profit figures, as it's to me, a better report on how the market's been missing certain things/aspects.
Hell, a fusion of both could be interesting, BB's os wasn't that bad from what I remember, just the 8800 I had sucked after updating to ver 7 (I think)

Dushmany said,
but before anyone notices there'll be 2
then there'll be one
then we're stuck buying whatever junk the victor decides to peddle on us

Do I believe this will happen? probably not in my lifetime, is it plausible? yes
I'm just for more competition is all. Like for instance
if a third party low to mid range smartphone maker suddenly revives the best parts of BB os, or Symbian os, I'd be interested in their sales figures/profit figures, as it's to me, a better report on how the market's been missing certain things/aspects.
Hell, a fusion of both could be interesting, BB's os wasn't that bad from what I remember, just the 8800 I had sucked after updating to ver 7 (I think)


Seems like you been reading a lot of liberal anti-free market propaganda.

You have the right to say so of course
I just didn't want to bring personal experience into it
(I used to be a market trader, my dad had a business based on our trade, we went bankrupt as we got pushed out by the so called growing stores that would help, and had fears/doubt reassured right up to the moment the rug was pulled from under us, and we weren't the only ones)

I'm sorry I was trying to keep that out of the discussion, but thought it might give you an insight as to why I'm for more competition.

The market will correct itself. If one player becomes dominant then the next technological innovation will bring new competitors. Just look at the consumption devices. Microsoft has to realize that for everyday use iOS and Android are substitutes for Windows.

At the moment the environment is very competitive and resources are scarce. The third player, Microsoft, has a lot of financial means but even they have a hard time gaining access to the market. Without a new innovation I doubt there is room for a 4th player.

But should the market become more stable and should one player become dominant then eventually new players will join in to make use of the available resources.

Dushmany said,
(I used to be a market trader, my dad had a business based on our trade, we went bankrupt as we got pushed out by the so called growing stores that would help, and had fears/doubt reassured right up to the moment the rug was pulled from under us, and we weren't the only ones)

But did competition end or did you simply lose the competition? Sounds like either a case of economy of scope or scale. In the ongoing quest for process and product improvement some companies can't survive. It really is survival of the fittest.

How did those growing stores push you out of business? And did they increases prices after they took you out?

Well Bessemer Road (Wales) Brean, And the Butlins Minehead were our biggest trade, we were a clothing manufacturer, the stores started to appear right alongside where we used to put up our stalls, shoppers started to flock to the stores, thinking least it's indoors, so we in turn started lowering prices, as one does, but as we started getting attention to the deals all market traders at the time were doing in order to keep customers interested, new measures were put in place for parking for the stores, right where the traders had their stalls,
I guess you hit the nail on the head, as it were, survival of the fittest.

(And yes, one very line of coats we used to sell for £19.99 were being sold that year at £35 in one of the more well known large stores)

(edit, not just coats, obviously)

Dushmany said,
Well Bessemer Road (Wales) Brean, And the Butlins Minehead were our biggest trade, we were a clothing manufacturer, the stores started to appear right alongside where we used to put up our stalls, shoppers started to flock to the stores, thinking least it's indoors, so we in turn started lowering prices, as one does, but as we started getting attention to the deals all market traders at the time were doing in order to keep customers interested, new measures were put in place for parking for the stores, right where the traders had their stalls,
I guess you hit the nail on the head, as it were, survival of the fittest.

(And yes, one very line of coats we used to sell for £19.99 were being sold that year at £35 in one of the more well known large stores)

(edit, not just coats, obviously)

It's a pitty but its the natural order of things. Being an enterpreneur can be brutal. But it seems the additional competition actually let to lower prices and the survival of the companies that were able to offer the lowest prices. Most likely because they had improved either their product or the proces that brought the product to the market.

I can just see it happening again, afterall, if no one's competing, who's to stop them from charging whatever they want.
I could throw names like apple or dell, but then I'll probably get some random guy reply with some sort of flame post

So just to clarify my last sentence, there is nothing wrong with apple or dell devices if you happen to like them.

Dushmany said,
I can just see it happening again, afterall, if no one's competing, who's to stop them from charging whatever they want.
I could throw names like apple or dell, but then I'll probably get some random guy reply with some sort of flame post

So just to clarify my last sentence, there is nothing wrong with apple or dell devices if you happen to like them.

But there is competition. It's just that Dell and Apple offer something different that allows them to charge more for it. If anything the competition keeps them in check. Everytime they create something new (Apple) or allow some level of costumization (Dell) the other players quickly follow and offer the same for less.

It only is an issue when there is a monopoly or secret agreements. But we have regulatory organizations for that and they (mostly) do a good job. Besides what would be the alternative?

Imagine if there were many players. Each of them would have a small size of the market. They would make a small profit but not enough to validate investment in continous product and proces improvement. We wouldn't have products with as much quality and for such a low price. So too many players isnt a good thing. Neither is too few, in that you are correct. But given the current environment and the technological situation I see nothing wrong with three players.

Dushmany said,
I can just see it happening again, afterall, if no one's competing, who's to stop them from charging whatever they want..

Android isn't a single entity, so your original assertion was wrong really. Android manufacturers primarily compete with each other, similar with how Windows manufacturers compete with each other, and much less so with Apple (who compete at the higher end and has a huge market share in that segment).

But to your question, If you charge a premium in X market, regular economic theory dictates that the the high price provides an incentive to others to move into that market. If Wal-Mart raises prices, then new mom and pop stores will open up to take advantage of that price discrepancy. The low prices is there only real barrier to entry.

Everything I have read says Heins messed up royally, and cost RIM a lot of money. He delivered a lot of empty promises, many of which he failed to keep *cough bb10 on playbook cough*.

Hopefully Blackberry can turn it around, but due to my dealings with them in the past (2 pearls, both shittacular, and my playbook abandonned within 6 months of purchase).. I don't see any changes from me as a consumer.

He just kept the promises going from the previous CEO's.. not entirely his fault.. he did not change enough when he started..

This should all be a lesson of what could of happened to Nokia if they "stayed the course" and did not switch to Windows phone.. Blackberry should of switched to android as soon as they heard Nokia was going to windows phone because companies realized at the time that this is now an Ecosystem war not a hardware war... Windows phone has a chance because it is attached to Windows 8..

Dushmany said,
And the monopoly grows as another smartphone make disappears

A monopoly is where a market is controlled by one company.