It was once a premier device among the ranks of the smart-phone elite, holding its own against Apple’s iPhone, T-Mobile’s G1 and Google’s Android. Congressional delegates, CEOs and everyday businesspeople alike tapped away on a now-obsolete full keyboard. Its moniker was hijacked from a popular fruit in the same family as the raspberry. We’re talking, of course, about Research in Motion’s (RIM) Blackberry, which in a mere four years has gone from being a cultural icon to a cautionary tale about a corporation’s inability to adapt to its consumers.
The disparity in the success between the Blackberry of old and the current model is overwhelming, and crunching the numbers backs it up. At its peak in 2008, when Blackberry sales soared, RIM’s reported its market capitalization to be more than $84 billion, and its extreme popularity had earned it the nickname CrackBerry. But even after a recent two-day surge on July 5-6, the value of the company was estimated at approximately $4 billion, a 95 percent loss. In addition, RIM recently announced it would be laying off 5,000 workers or about one-third of its employees; that was preceded by the layoff of 2,000 personnel last year.
The decline of RIM and its feature mobile gadget provides a perfect example of just how rapidly the consumer-dominated technology market is evolving. Companies must have an aptitude for constantly altering their game plan to adapt to their customers, and innovation is the key to staying ahead of their competitors. It’s logical, then, that the smart-phone market is leaning away from businesspeople and towards a generation with an increasingly short attention span, both in the use of their devices (i.e. texting, rapid touch-screen navigation and mind-blowing data speed) and in their voracious appetite for the next “big thing.” This demand for originality is one of the fundamental factors when examining the fall of the Blackberry.
First off, RIM made the fatal mistake of believing that corporate customers and not everyday consumers would be the driving force behind smart-phone development. While a few die-hard Blackberry users cling to features like full keyboards that highlight the ability to send lengthy emails, millions of regular customers praise the video quality and gaming capacity of the iPhone and Android.
Next, the Blackberry maker failed to prepare for the rise of the app economy, a market that is expected to reach $25 billion by 2015, according to a report from World Mobile Applications Market. The hundreds of thousands of apps created by software developers put the spotlight on the iPhone and Android platforms and left Blackberry in the dust. When RIM did finally release its first touch-screen phone, the Blackberry Storm, it was viewed as a poor attempt to replicate the iPhone.
Finally, RIM lacked the foresight to see that smart-phones would eventually become complete on-the-go entertainment centers. With the Blackberry firmly planted in the category of phone, even though it was advanced at the time, Apple and Google revolutionized the industry by creating powerful mobile computers that surpassed any previous user experience.
As Silicon Valley analyst Rob Enderle said in a TIME magazine article earlier this month, RIM made the ultimate mistake of letting their competitors determine their development process. “RIM repeatedly made strategic decisions that were fundamentally wrong. They were either fighting from a position of weakness or they were playing catch up…never let the other guy dictate your strategy,” Enderle stresses.
Signs of the company’s tumble from glory abound at the RIM headquarters in Waterloo, Ontario. Brand new company leaders have been forced to step up after co-CEOs Jim Balsillie and Mike Lazaridis were fired along with CTO David Yach and COO Jim Rowan. Blackberry 10, a heralded new operating system, was initially announced in April 2010, but the line’s release was recently further delayed until 2013. Worse, overly optimistic remarks made by new CEO Thorsten Heins regarding the release of the new line of phones could prompt shareholders to file lawsuits against RIM.
Call it a lack of vision, innovation or adaptation, but no matter what theory you choose to support, RIM is in serious trouble. Blackberry has receded from having a 50 percent market share in 2007 to barely 11 percent as their customers transitioned to iPhone, Android and other devices. Stock prices hover around $8 a share, depressingly pitiful compared to the shares of Apple and Google, which are consistently sold for around $600. After more than a decade at the pinnacle of the mobile technology industry, the reign of the Crackberry has come to an end.
us.blackberry.com
