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Balsillie resigns, RIM remodels

CEO won't rule out company's sale after loss in latest quarter

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RESEARCH in Motion (TSX:RIM) says former co-CEO Jim Balsillie, the hockey-loving executive, who for years helped build the BlackBerry into a global force in the smartphone industry, has resigned from the board.

The announcement, symbolic of the changes afoot at Canada's reigning technology leader, came along with a financial report that fell short of analysts' already low expectations.

The company announced from its headquarters in Waterloo, Ont., it had a loss in the final quarter of its 2012 financial year, rather than the profit that had been expected, as a result of writing down some of its assets.

Sales of the BlackBerry were also below many analysts' expectations and the company, which usually provides guidance about where it expects revenue and profit will be in the near future, said it was continuing that practice.

Research In Motion also said it's undertaking a strategic review of its alternatives -- a term that can sometimes mean major changes for a company, such as a sale or merger -- a process that has essentially been underway for months.

Balsillie -- who had been co-chief executive of RIM along with company founder Mike Lazaridis until they stepped aside in January -- had become one of Canada's best-known businessman both because of his role at the company and his failed attempts to use his personal fortune to bring another National Hockey League team to southern Ontario.

"As I complete my retirement from RIM, I'm grateful for this remarkable experience and for the opportunity to have worked with outstanding professionals who helped turn a Canadian idea into a global success," Balsillie said in a statement.

Barb Stymiest, chairwoman of RIM's board, thanked Balsillie.

"His energy, drive and enthusiasm helped build one of the most successful technology companies of our time," she said.

The move came as the BlackBerry maker said it was reviewing its strategic opportunities, including partnerships and joint ventures, and licensing of its technology.

RIM, known for its technical strengths, produces its own hardware, software, operating system and applications such as the BlackBerry Messenger Service, a popular instant messaging service that is exclusive to BlackBerry users.

While this has been an advantage for RIM in the past, the company has seen software developers choose to focus on products for more popular Apple iPhones or smartphones using Google's Android operating system.

The company said two of its senior executives are out. Chief technology officer for software David Yach will be retiring and RIM's chief of global operations, Jim Rowan, is leaving "to pursue other interests."

Thorsten Heins, who replaced Balsillie and Lazaridis as chief executive, said the challenges for the company over the next several quarters are significant.

"In addition to delivering the BlackBerry 10 platform and refocusing resources on RIM's key opportunities, such as BlackBerry Mobile Fusion and new integrated service offerings, we will also drive greater operational performance through a variety of initiatives, including increased management accountability and process discipline," Heins said in a statement.

Heins thanked Balsillie for his years of service and wished him well.

Heins also said his message was simple: "We're making the necessary changes at the company."

When Heins was asked on a conference call Thursday if the strategic review could include the sale of RIM, he replied: "We would consider it, but it's not the main direction we are pursuing right now."

Licensing of RIM's technology has been raised by some critics as a key opportunity for RIM.

RIM reported Thursday a loss for its latest quarter of US$125 million or 24 cents per share as it took a $355-million charge to goodwill.

The loss compared with a profit of $934 million or $1.78 per diluted share a year ago. Revenue fell to $4.2 billion, from $5.6 billion.

During the quarter, RIM shipped approximately 11.1 million BlackBerry smartphones and more than 500,000 PlayBook tablets.

The average analyst estimate had been for a profit of 81 cents per share and revenue of $4.54 billion, according to estimates compiled by Thomson Reuters.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition March 30, 2012 B9

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