It's bad enough that Research In Motion (RIMM) is losing market share to Apple (AAPL) and Google (GOOG), but throw in the departure of key executives, well that's when things become more complicated.
Just recently, RIM's head of sales, Patrick Spence, announced he would be leaving the company to pursue another leadership position. Spence has been with the company for 14 years. He was a driving force behind RIM's dominance, but since the company's products have been becoming inferior, sales have been plummeting.
The new role will be combined with the COO. This is a strategy which I believe to be very poor. A company like RIM should maintain a strong sales team separate that of the top executives. This increase in oversight gives very little wiggle room for a new sales force.
This isn't just a regular departure either. Pence was the one that helped launch BB7 and he decentralized sales in order to grab market share. Unfortunately, CEO Thorsten Heins will not be looking to replace him. This means that RIM will have no head of sales. So the real question is who will be in charge of pushing products onto the market?
Many shareholders see his departure as a positive as they believe the company is getting rid of the old blood. This is not necessarily true. Pence was a great salesman and he helped put RIM on the map. The issue began when RIM was not able to put together a product that could rival Apple (AAPL) or Google (GOG). It's hard for a salesman to sell a bad product.
Without a salesman, I am not sure how RIM plans to grab market share. IDC reported that Apple and Google both controlled 80% of smart phone shipments in Q1. RIM's share fell from 13.6% to 6.4%. With market share diminishing so quickly and a loss of the top salesman, RIM is between a rock and a hard place. The bleeding will continue until the company can put up a fight against Apple and Google.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
