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Mon 23 Jan 2012 11:22 AM

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BlackBerry maker’s CEOs hand reins to insider

RIM chiefs cave to pressure after four years at the helm of struggling Canadian firm

BlackBerry maker’s CEOs hand reins to insider
Research In Motion co-CEO Mike Lazaridis

Research In Motion's Mike Lazaridis and Jim Balsillie have
bowed to investor pressure and resigned as co-CEOs, handing the top job to an
insider with four years at the struggling BlackBerry maker.

Thorsten Heins, a former Siemens executive who has risen
steadily through RIM's upper management ranks since joining the Canadian
company in late 2007, took over as CEO on Saturday, RIM said on Sunday.

The shift ends the two-decade long partnership of Lazaridis
and Balsillie atop a once-pioneering technology company that now struggles
against Apple and Google.

With RIM's share price plummeting to eight-year lows, a
flurry of speculation that RIM was up for sale has enveloped the company in
recent months. But investors have pointed to the domineering presence of
Lazaridis and Balsillie as one reason a sale would prove difficult.

Activist investors have clamoured in recent months for a
new, "transformational" leader who could revitalize RIM's product
line and resuscitate its once cutting-edge image. It remains to be seen whether
RIM has found such a leader in Heins, analysts said.

"It's the first positive thing that they have done in
months," said Charter Equity analyst Ed Snyder, even as he expressed
caution over the choice of Heins, a longtime lieutenant of Lazaridis and
Balsillie. "My feeling is that it's a figure-head change."

Michael Urlocker, an analyst with GMP Securities, questioned
whether Heins had the right background for the job that faces him. "I am
not sure that an engineer as new CEO really gets to the central issues faced by
RIM," he said.

Lazaridis and Balsillie also gave up their shared role as
chairman of RIM's board. Barbara Stymiest, an independent board member who once
headed the Toronto Stock Exchange, will take over in that capacity.

The pair, who together built Lazaridis' 1985 start-up into a
global business with $20bn in sales last year, have weathered a storm of
criticism in recent years
as Apple's iPhone and the army of devices powered by
Google's innovative Android system eclipsed their email-focused BlackBerry.

"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 in a hastily arranged interview at RIM's Waterloo
headquarters, flanked by Balsillie and Heins and with Stymiest joining via

The executives were keen to paint the shuffle as an orderly
transition on a succession plan mapped out at least a year ago, and not a
retreat in the face of a plummeting share price, shrinking US market share and
criticism of their products.

Both Lazaridis and Balsillie - two of RIM's three largest
shareholders with more than 5 percent each - will remain board members, with
Lazaridis keeping a particularly active role as vice-chair and head of a newly
created innovation committee.

Lazaridis said he plans to buy an additional $50m of
RIM shares on the open market.

In the group interview announcing the change, Heins said his
most immediate concern is to sell 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.

"Their problems are deep-rooted, and it's going to take
time," Snyder said.

In the longer term, Heins, previously one of RIM's chief
operating officers, said he would push for more rigorous product development
and place greater emphasis on executing on the company's marketing and
development plans.

"We need to get a bit more disciplined in our own
processes," he said in a YouTube video posted by RIM. "We are a
great, innovative but sometimes we innovate too much while we are building a

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Heins said RIM, which suffered a damaging outage of much of
its network last year, has embarked on a global search for a chief marketing
officer to improve advertising and other communication with consumers.
Consumers now account for the majority of RIM's sales even though the
BlackBerry built its reputation as a business tool.

For RIM critics, the focus on customers may seem long
overdue. The company seemed blindsided by Apple's introduction of the iPhone in
2007 and was also slow to launch a competitor to the iPad. When its PlayBook
tablet finally hit the market last spring, it was not equipped with RIM's
trademark email service. The reviews were scathing, sales were anaemic and the
company has been forced to offer steep discounts.

Heins said it would be wrong of RIM to focus on licensing
its software or integrated email package, a strategy that many analysts and
investors have thought the company might pursue. Even so, the new CEO said the
company would certainly be open to discussions of that nature.

Neither Lazaridis nor Basillie detailed any future plans
outside RIM, with Lazaridis particularly eager to point out his still-active
role as a confidante to the new CEO.

Both have other interests outside of RIM. Lazaridis donated
hundreds of millions of dollars to set up a theoretical physics institute
attached to his alma mater, the University of Waterloo. Balsillie heads a
think-tank in international governance and long dreamed of owning a National
Hockey League franchise.

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