Research In Motion co-CEO Jim Balsillie told shareholders at a packed annual meeting Tuesday that the company's foundation remains strong on the verge of its biggest product launch ever.

He acknowledged at the meeting in Waterloo, Ont., that RIM's performance has been below expectations and said there have been challenges as the company prepares to release a new BlackBerry operating system.

Despite a recent spate of criticism and a serious drop in RIM's stock price, Balsillie and co-CEO Mike Lazaridis were welcomed with applause.

Balsillie told the crowd that seven new BlackBerry smartphones running its new operating system will be launched in the coming months.

"Mike and I, along with the executive team, are closely managing this transition and have positioned the company for continued future success," he said.

The new smartphones should help the company stay on track to meet its financial targets for the year, he added.

Shareholders eager to hear the company's plans filled about 200 seats, leaving many standing in the crowded room and some spilling out the doors. 

Lazaridis said the company is continuing to build on RIM's reputation for security when it comes to email and that trials of its PlayBook tablet were underway at more than 1,500 companies.

"This includes multiple government agencies and groups from both the public and private sectors," he said.

Some at the meeting were critical of the company's marketing efforts in the face of rivals like Apple — including one shareholder who brought pictures of RIM's PlayBook tablet display at a BestBuy store that he said fell short of the rival offerings.

"We will continue investing in it and it's only a matter of time — we will do better," Lazaridis said.

In a vote of confidence, shareholders re-elected the RIM management slate of directors including lead director John Richardson.

U.S.-based proxy advisory firm Glass Lewis had recommended that shareholders withhold their support for Richardson.

Blizzard of bad news

RIM has seen its first-quarter profit plunge 10 per cent, market share tumble almost five per cent in three months and its stock price lose half its value in 2011.

That blizzard of bad news has shareholders and analysts alike asking whether RIM can catch up in the accelerating smartphone race.

"The entire smartphone sector has become a tough market dominated by larger [than RIM] competitors making RIM's turnaround more difficult than in the past," said Mark Abramsky, an analyst with RBC Capital Markets in a morning note Tuesday.

RIM shares were up 37 cents to $27.59 at noon ET Tuesday, still off 60 per cent from their 52-week high and down a whopping 80 per cent compared to their five-year high in the $140 range in 2009.

Once the darling of Canada's technology sector, RIM has lost much of its lustre in recent months. That is because its BlackBerry — for years the pre-eminent communications device for global executives — has been losing market share to the likes of Apple Inc.'s iPhone and a variety of devices running Google's Android operating system, mainly in the consumer communications market.

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Three-month TSX stock chart for Research In Motion

Between Feb. 11 and May 11, RIM's share of the smartphone subscriber market slide by 4.2 percentage points to 24.7 per cent, according to comScore Inc., a company that tracks the communication and technology markets.

By comparison, over the same period, Android phones snapped up an additional five-percentage-point slice of the same market, giving it a 38 per cent share, and the iPhone saw its smartphone customer base expand to almost 27 per cent from 25 per cent.

RIM was late to the communications market with its own tablet, which — though relatively well received as a device — missed many of the early adopters who bought Apple's iPad instead, according to analysts.

Falling profits

Worse still, in late April, shareholders saw RIM cut its first-quarter and full-year earnings estimates, a mere four weeks after confirming an earlier — and higher — profit forecast.

What was once a prediction of $1.47 US to $1.55 earnings per-share for the first three months of RIM's fiscal year slipped to $1.30 to $1.37 a share. RIM's first quarter EPS eventually came in at $1.33. (RIM reports its financial results in U.S. dollars.)

Similarly, the firm's estimate of its 2012 earnings was chopped to between $5.25 to $6 from an earlier forecast of $7.50.

RIM shares fell 14 per cent in response on the day RIM unveiled its new estimates.

In the ensuing months, RIM has faced shareholder lawsuits and calls for Balsillie and Mike Lazaridis, who serve as co-CEOs and co-chairmen of the company, to divide up their roles  and appoint an independent chairman of the board.

RIM avoided a shareholder vote on a plan to split the roles of CEO and chairman prior to Tuesday's meeting when deal was reached with Northwest & Ethical Investments to establish an independent committee to review the chairman's role.

Sameet Kanade, a Northern Securities analyst, said setting up a committee just prolongs the need to split up the roles.

"We don't think it bodes well for the stock in the short to medium term," Kanade said from Toronto.

"It looks nice on paper, but it doesn't really solve the more pressing concerns of who is looking out for shareholder concerns on the board and who is looking out to make sure the CEO or the co-CEOs are taking the right and decisive actions."

Kanade said he believes Lazaridis should be CEO with Balsillie as the chief marketing officer or filling other roles.

"Accountability would be more direct with one person running it," he said. "There's no one looking out for the shareholders' interests on the board."

With files from The Canadian Press