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Summary:

The two Waterloo Wallys running Research in Motion (NSDQ: RIMM) have presided over the incredible destruction of shareholder wealth in 2011…

RIM Co-CEOs Jim Balsillie and Mike Lazaridis
photo: RIM

The two Waterloo Wallys running Research in Motion (NSDQ: RIMM) have presided over the incredible destruction of shareholder wealth in 2011 by misleading the public again and again about its ability to compete in mobile. As they tried once again Thursday evening to urge financial analysts to look ahead to a brighter future while once again delaying the release of a crucial product, Jim Balsillie and Mike Lazaridis failed to give anyone a reason to think RIM will be a player in mobile during 2012 or to explain why they should still have their jobs.

It’s sort of amazing that RIM was able to sink to a new low in its final public appearance of 2011. We already knew that earnings were going to be poor on the back of a charge for unsold Playbook inventory and tepid demand for the new BlackBerry 7 handsets in the U.S. But RIM managed to one-up itself yet again, announcing that the first BlackBerry 10 handsets (hastily renamed earlier this month) won’t ship until “the latter half of 2012″ after insisting all year the devices were on track for early 2012.

Lazaridis, who is supposed to be watching over the technical side of RIM, seems to have made the same mistake twice in 2011. Earlier in the year RIM announced that the BlackBerry 7 handsets would be delayed because RIM decided it needed to tear up its designs and switch to a higher-performance processor, which caused delays in the qualifying process that wireless carriers require for new phones.

Lazaridis announced during the call that RIM had decided that it needed a more power-efficient dual-core processor that won’t be available until mid-2012 for the first LTE BlackBerry 10 handsets, refusing to elaborate but officially delaying the product RIM has promised will be its savior. The company must have made this decision relatively recently, as it didn’t update its official guidance for the products until Thursday despite having had several chances to do so, including the BlackBerry DevCon events in both San Francisco and Singapore.

That forced Balsillie, who is the sales-and-marketing half of this dynamic duo, to say with a straight face in the fine tradition set by Baghdad Bob that RIM would increase U.S. BlackBerry sales in 2012 with a new marketing and advertising campaign just minutes after his company issued a press release predicting an 18 percent drop in BlackBerry shipments for the current quarter. He said that knowing that the BlackBerry 10 phones would not arrive until late next year, which will probably put them up against a new iPhone, a new Android flagship phone, a full year of Windows Phone collaboration between Nokia (NYSE: NOK) and Microsoft (NSDQ: MSFT), and maybe even a WebOS phone.

In other words, RIM will stumble through 2012–the five year anniversary of the launch of the iPhone–pushing essentially the same old BlackBerry software that U.S. consumers have been deserting in droves. It’s therefore a bit surreal to listen to RIM’s co-CEOs express such confidence that things will get better in a core market like the U.S. because it hasn’t done enough advertising.

If you look at certain aspects of RIM’s performance, you could understand their confusion. RIM is reasonably profitable (despite a steady decline in profits in 2011), has an increasing number of subscribers to its services (despite the fact that much of that growth is coming outside the U.S. at lower price points) and counts some of the biggest companies in the world as its customers (despite the fact that bring-your-own-device policies in the workplace have led to a huge surge in iOS and Android adoption among workers).

It’s just that years of neglect of the essential truths that were revealed by the iPhone–people want apps, true Web browsing, and style in their mobile computers–have finally taken a toll in 2011 for RIM. Everyone else has managed to figure this out: even Microsoft, despite no real traction, at least has a modern product.

RIM does not. Earlier in the year at RIM’s shareholder meeting in July, when the BlackBerry 10 handsets were still expected to ship early next year, Lazaridis explained that the BlackBerry 7 handsets were “messaging” handsets compared to the “mobile computing” handsets that would arrive with the BlackBerry 10 software. Now RIM is going to have to make it through almost an entire year with those “messaging” handsets as competitors chuckle while defining the future of mobile computing.

And for this, Balsillie and Lazaridis still have jobs. Balsillie promised “to leave no stone unturned” in examining what it will take to get RIM turned around, including the company’s management structure. However, the company’s board of directors is supposed to issue a report by the end of January on management effectiveness in response to demands from investors.

RIM needs to fire its CEOs if for no other reason to send a signal to employees that such poor performance demands consequences. It’s hard to imagine Balsillie, who has tried and failed to buy a National Hockey League franchise for years, tolerating this kind of performance from his coaching staff or general manager.

But it’s probably too late. It’s a little bit easier to understand why two RIM employees drank themselves into a stupor before a flight to Beijing earlier this month: listening to Balsillie and Lazaridis try to explain why the sun will come out tomorrow should send any proud RIM employee to the whiskey bottle.

  1. Just not any room for them anymore…they need to pivot in a major way. Maybe go into the food industry.

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  2. Does RIM even have a board of directors?? What do they spend their time doing??

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  3. Don,t blame co CEO,  RIM has culture and political environment.
    In RIM if a new hired person figure out major problem and introduce efficient approach, both manager and his buddy group member will proof their wrong approach works. just like someone point out driving a car is right way, pushing a car is wrong way, then both manager and his buddy group member will hate you, and proof that 3 person can also move the car by pushing it. cheating email will be sent to some vice president, saying like: see, the car moving, pushing a car is a natural part of the process, in order to deny contribution of introduce skill of drive a car, thet deny merit of driving a car.
    It is very strange company culture and strange company political environment, it promote stealing and cheating skill. RIM’s management may be a typical instance in MBA course.
    This culture deny or steal hardworking team members’ contribution/innovation, generate strange political environment, destroy RIM.
    so don’t blame co CEO,  some of their VP and expert is the reason of low efficient.

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  4. These idiots sent me an invite to BlackBerry DevCon Europe – for the bargain price of 125 euros, If I booked early.

    Ummmmmmmmmm

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  5. Looks like these two “bozos” are going down with the ship! While everyone else is bailing, their handcuffing themselves to this debacle! I honestly think they know the end is near & are trying “too” hard to effect their stock-value, while rendering their core-business model irrelevant! In a year, iOS6, iPhone 5 & iPad 3 will destroy the remaining “copycat” companies. By then, RIM will be a memory!

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