BlackBerry maker Research in Motion's co-CEOs, Jim Balsillie and Mike Lazaridis, announced Sunday they would step down as co-CEOs of the once-iconic company that has struggled to compete in recent years.
The RIM founders will be replaced by Thorsten Heins, a chief operating officer who joined RIM four years ago from Siemens AG, RIM said.
The Canadian company turned the email smartphone into a ubiquitous device that many could not live without, but U.S. users have moved on to flashier touch-screen phones such as Apple's iPhone and various competing models that run Google's Android software. RIM has suffered a series of setbacks and has lost tens of billions in market value.
RIM said last month that new phones deemed critical to the company's future would be delayed until late this year. And its PlayBook tablet, RIM's answer to the Apple iPad, failed to gain consumer support, forcing the company to deeply discount it to move the devices off store shelves.
Many shareholders and analysts have said a change or sale of the company has been needed, but the sudden departure of the two founders wasn't expected despite their promises that they would examine the co-CEO and co-chairmen structure.
Balsillie and Lazaridis have long been celebrated as Canadian heroes, even appearing in the country's citizenship guide for new immigrants as models of success. They have headed Waterloo, Ontario-based RIM together for the past two decades.
"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 statement.
Lazaridis will take on a new role as vice chairman of RIM's board and chairman of the board's new innovation committee. Balsillie remains a member of the board.
"I agree this is the right time to pass the baton to new leadership, and I have complete confidence in Thorsten, the management team and the company," Balsillie said in the statement. "I remain a significant shareholder and a director and, of course, they will have my full support."
A company that was worth more than $70 billion a few years ago now has a market value of $8.9 billion.
Analysts have said RIM's future depends on its much-delayed new software platform as RIM has tried and failed to reinvigorate the BlackBerry. Apple co-founder Steve Jobs said in late 2010 that RIM would have a hard time catching up to Apple because RIM has been forced to move beyond its area of strength and into unfamiliar territory of trying to become a software platform company.
Heins said Lazaridis and Balsillie took RIM in the right direction and said he's committed to the new software.
"We are more confident than ever that was the right path. It is Mike and Jim's continued unwillingness to sacrifice long-term value for short-term gain which has made RIM the great company that it is today. I share that philosophy and am very excited about the company's future," Heins said.
Barbara Stymiest, a former chief operating officer of the Royal Bank of Canada who has been a member of RIM's board since 2007, has been named the independent board chair. RIM also named a new board member, Prem Watsa, the chief executive of Fairfax Financial Holdings Ltd.