BlackBerry could face lawsuits over delays
A LEADING Silicon Valley investor and former top Apple executive has said that BlackBerry deserves the lawsuits it is likely to face over allegedly misleading markets.
BlackBerry-maker Research in Motion will hold its annual meeting on Tuesday in Ottawa, and new Chief Executive Thorsten Heins is likely to face tough questions about why his public statements about BlackBerry’s future plans went from upbeat to announcing potentially catastrophic delays in just a few weeks.
RIM posted a $518million loss for the most recent quarter and announced that the BlackBerry 10 phones that were supposed to launch by January of this year at the latest will in fact not be available until next year.
Shares are now just 5 per cent of their 2008 peak value. Now an increasing number of experts are suggesting that Mr Heins’ remarks just last week could now be seen as overly optimistic.
“They’re going to get sued and they should get sued because I think a closer look at the record is likely to unearth knowing and willful misrepresentation,” said Jean-Louis Gassée. The former Apple executive, who is now a venture capitalist and blogger, told the New York Times, “When the CEO. says there’s nothing wrong with the company as it is, it’s not cautious, it doesn’t make sense.”
After RIM posted its latest set of disappointing figures, Mr Heins launched a media campaign to deny that, as one analyst claimed, the company was in a “handset death spiral”.
Pushing back the launch of its forthcoming operating system, BlackBerry 10, to the beginning of 2013 means remaining products this year will be based on old technology and face the gathering momentum of new Windows Phone 8 and iPhone 5 devices, along with the continued growth of Google’s dominant platform, Android.
In a statement, RIM rejected any suggestion that the company had misled investors. “RIM is well aware of its disclosure obligations under applicable securities laws and is committed to providing a high level of transparency, as evidenced by RIM’s decision to issue an interim business update on May 29, 2012, to alert shareholders that it expected to report an operating loss,” the company said.
The delay to the BlackBerry 10 operating system, which RIM hopes will drag its phones back into competition with top Apple and Android devices, was a change of such magnitude that it should have been reported as soon as possible, experts said. Mr Heins unveiled a prototype device at the beginning of May at the BlackBerry World conference in Orlando, Florida. He said then that the device would be out by the end of this year.
“There’s a high risk of litigation here,” James D Cox, a law professor at Duke, told the New York Times. “The outcome of the litigation would be hard to predict.”
The newspaper added, however, that many may be put off legal action because of doubts that RIM would be around for long enough for it to take place.