BlackBerry – Has all the juice been squeezed out?
It was January 9th 2007 when Steve Jobs, dressed in faded jeans, worn-out trainers and a dark polo-neck sweater changed the world when he introduced the iPhone. It also marked the beginning of the end of three dominant mobile phone brands, namely BlackBerry, Palm and Nokia. Welcome to the Smartphone 2.0 era.
To put all this into perspective, the Q2 2014 industry sales figures show iOS and Android devices accounted for 96% of the global sales of smartphones. BlackBerry was selling the same number of units it did 7 years ago. What lessons can we take out of how BlackBerry had the juice squeezed out?
1. Changing consumer expectations. A simple, reliable, robust software engine in the early days of smartphones made BlackBerry the delight to the customer. The users of smartphones were the business and corporate world whose needs were adequately catered for by the BlackBerry brand. The evolution of smartphones and the lowering of the device cost as well the growing use and applications which were not strictly business brought in a new class of consumers. BlackBerry failed to evolve with the user expectations and the software failed to keep up with consumers.
For example in early 2007 iPhone iOS ran on two processors and 700MB of memory compared to BlackBerry on a single processor and 32MB. The iPhone was also a fully internet capable phone compared to BlackBerry. iOS was a multi-layered modular platform compared to the flat single BB platform. BlackBerry was heavily “out gunned” from the beginning.
2. Self belief. BlackBerry in Q1 2007 sold 2 million units and peaked 14.6 million units in Q4 2010. The business was on a high, mobile operators queued whilst RIM (Research In Motion), as BlackBerry was known, then vetted and scrutinized who was more deserving to launch their services. It took 3 years for BlackBerry to recognize that it had a software problem. During this period they were caught in a quagmire of rising sales due to high demand. All they did was “stick to their knitting” through small tweaks in their operating system and new devices in an attempt to maintain this rising growth.
Such was their belief in themselves and the brand in 2010 RIM (Research in Motion) acquired called QNX. This was a half hearted effort by the Mike Lazaridis team that they had what it took to take on the iOS and Android menace.
Below are the global statistics compiled by ZDNet for the 4 major operating systems, the shipments of their and their market values in the 3rd quarters of 2012 and 2013:
You can see BlackBerry is still in the lower ranks compared to the major brands running on Android, iOS and Windows.
This belief entrenched itself with in-fighting between the traditionalists “keyboard forever” and the “touch screen” user interfaces blocking any vision and foresight. The result, an exodus of engineering talent and myriad of hardware misdirection’s. When they did start to build on QNX it didn’t have the thick layer of frameworks developers needed to write applications. They failed to manage the onslaught of the Android and iOS juggernauts. By end of Q3 2013 sales had plunged to a meager 2 million units.
3. The App revolution. BlackBerry was in a dilemma of which apps and services to update, rewrite or drop altogether. They failed to listen to what customers were telling them. This was further compounded that App developers were focused on iOS and Android platforms which offered them the latitude to develop their applications. The BlackBerry version of most apps was always the last to launch. The App Store, Google Play Store were way ahead of the BlackBerry App store in terms of choice and content. BlackBerry had lost the software battle before it had even started.
4. Too little too late. BlackBerry’s response to the Samsung S5 and iPhone 6 is the BlackBerry Passport and its Porsche design. This box like cuboid will do very little to move the company’s fortunes forward.
The master stokes of creating modular operating systems that can be seamlessly build upon by developers to create that all important applications market are hard to beat. iOS and Android are too far gone for BlackBerry to catch up such that BBM, the iconic BlackBerry messenger service, is now available on Android and iOS platforms. Needless to say the carnage already caused by Whatsapp, WeChat, iMessenger and the like. Recall the article on “Arena’s”? They failed to see the arena’s developing all around them usurping market share at every opportunity rendering them almost helpless.
The latest quarterly results show a drop in Revenue from $1.57 billion prior year to $916 million and a loss of $207 million. The company has a market cap of $5 billion and cash of $3 billion. What then is the future for this iconic brand which still holds the Holy Grail of Mobile Device Security Management? We wait to see what they will do. It is already too late for wearables and mobile payment applications because iOS and Android have seen to that. Maybe just maybe they could be a little more juice left to bounce back …. The jury is out.