BlackBerry was huge back in the days. Celebrities’ use to love those phones, and even Barack Obama used one for most of his two presidencies as it was considered safer than any other smartphone back then.
From its QWERTY actual physical keyboard to real-time emails, the blackberry was for many years the smartphone by choice. The company sold millions and they were riding high. Blackberry did a lot of things right but they also did a lot of things wrong and now they are gone. The reasons why blackberry failed aren’t exclusive to them, so when one of the biggest phone companies plummets to oblivion, it’s worth analyzing.
How BlackBerry was born
BlackBerry was originally known as Research In Motion (RIM) and it had been around since 1984. RIM was the brainchild of Canadians Mike Lazaridis and Douglas Fregin.
From the start, RIM’s obsession was wireless and their vision paid off early. They were the first of many things: Protocol Conversion and Mobile Point-of-Sale, just to name a few. To help with growth, RIM hired Jim Balsillie in 1992 who eventually became co-CEO with Lazaridis – remember him, he was critical in BlackBerry’s success and their demise.
By 1995, RIM drew enough attention from investors to fund their first wireless two-way paging system. Wireless Paging – the idea was very enticing as one of the main investor in the time recalled:
”The idea of a wireless device to send and receive email was revolutionary. It was like looking into the future and knowing that this idea just made too much sense for it not to happen”
Adam Adamou
And he was right, prior to the IPO, RIM raised $30 million Canadian dollars for the interactive pager – a pager and a wireless network system which was released in 1996.
One year later, the corporate user magazine named it the top product of the year. RIM came up with a BlackBerry 850 pager and a complimentary server called the BlackBerry Enterprise Server, which was a genius idea. The server was exclusive to blackberry so it could push emails fast, instantaneously fast. Now there was no need to wait while your computer downloaded all the emails.
Communication became instant and businesses of course loved it. RIM aimed at the corporate world and that was a good idea, a great idea. Then, they launched the BlackBerry 957, RIM’s first true blackberry though not a smartphone yet, as it couldn’t make calls, but it did have the iconic QWERTY keyboard – a famous user interface.
Through improvements in 2003, they released the BlackBerry 7230 and it hit big! It had all the technology that made blackberry successful and now it could actually make calls so much so that people consider this moment the birth of the blackberry smartphone pivotal in communications.
One of RIM’s strongest selling point was safety. With promises of tougher encryption processes, they garnered the attention of major businesses and governments alike.
During the next six years, blackberry grasped the corporate world and didn’t let go. In fact, the devices were so addicting, they were called crack berries because corporations are healthy and wholesome.
Hold on to this idea of corporations for later. By the way, the name BlackBerry comes from how the QWERTY keyboard resembled the actual blackberry fruit, so now you have some random factoids for awkward silences.
As the years passed, blackberry became more advanced, they had cameras and new multimedia capabilities which made them appealing to a much bigger audience and a lot of people bought them.
Growth and Expansion
The early 2000s might have been unkind to fashion but they were great for RIM as its assets grew by 8x, users went from 500,000 or so in 2003 to 4.9 million in 2006. That means sales grew by 10x.
Back then, everybody in the corporate world had a blackberry, but not only them, teenagers as well. You see, combined with newer and better cameras, the blackberry messaging service bbm was perfect for adolescents. It could send images, voice notes, pictures locations, create group chats and of course text.
Does that sound familiar? That’s right, they built WhatsApp before WhatsApp was a thing. That’s how on point they were and they could have carried on with their greatness. At its peak, blackberry brand sold around 50 million devices per year with annual sales of almost $20 billion. Its stock rocketed from $2.15 dollars per share to $150 dollars per share and celebrities craved blackberries.
Though most of their models worked very well such as the Pearl and the Curve, promising products like the Storm never delivered. The Storm was the first model with a full touchscreen and no keyboard but since the OS was designed to work with a keyboard, it didn’t really grasp touchscreens very well. It was sluggish and unresponsive and users hated it.
Still, even if their newest phone was failing, sales piled up so there was no reason to be worried even when in 2007 Apple came up with a little device called the iPhone. At first, like most companies, RIM was not afraid of the iPhone.
Why would they be? Remember Steve Ballmer reaction to the iPhone? If you don’t, here’s the clip
Yeah, those words can bite back.
The Tipping Point
Let’s give RIM some credit, even after the introduction of the iPhone and up until 2011, sales of the blackberry increased so they had reasons to be confident. It was just that Apple had a different strategy and along with RIM’s mistakes, it could prove deadly for blackberry.
Let’s go over those mistakes.
Remember how blackberry was great for companies and teens alike? Companies loved connectivity and safety, teens loved chatting with their friends, but when was the last time you heard somebody, anybody saying I’m looking for the most secure phone in the world? The average user didn’t really focused on safety or security, or privacy. So while RIM had the corporate market to itself, they didn’t have much else.
Read this lethal quote by journalist Vlad Savov:
”Focusing on the tens of millions of customers it already had, blackberry missed out on the billions that were to come”
So who were these billions that were to come? Well, everybody else. Companies were finite and kids would get bored perhaps they might start using the iPhone and this was the second big mistake, not listening to the market. Yeah, Apple wasn’t the only one competing at this point but they had a great idea and it was the complete opposite of what RIM preached.
You see, blackberries were great for working people. Their batteries lasted long hours, the data consumption was low and their bandwidth consumption as well, boring but efficient apps were the norm and Apple said screw that. Their apps consumed loads of memories, their phones hugged up all the bandwidth and the first batteries lasted a day tops but their navigator safari was easy to use, apps were visually stunning and plentiful and the device just looked great.
So people who weren’t using their phones for business or didn’t care about efficiency now had another option which leads us to the third mistake.
Blackberry was obsessed with that QWERTY keyboard! The physical keyboard, it’s great for emails but it’s not great for pretty much anything else and they didn’t venture into a full touchscreen until it was too late. It’s not just about keyboards, it’s about everything!
Lazaridis focused on limits. Size, portability, bandwidth, battery and everything had to be limited for efficiency. Well, it turned out, that it was too limited.
The OS was too restrictive for app developers so the market was limited. In fact, most apps were stripped-down versions of their Android or iOS counterparts and they just didn’t work properly. The OS itself was also hard to update but ironically, updating it to make it more open to the market meant possibly losing some of the valued corporate customers because of security concerns.
RIM took pride in safety until bbm crashed for four days straight and RIM didn’t say a word about it until the third day. And then, there was that unauthorized spyware infection to 150,000 blackberry users in the United Arab Emirates and other bad scandals.
So with this bad press, blackberry was losing their identity and still Lazaridis and Balsillie rejected switching to Android or iOS or even Windows OS nor did they open bbm to competing for operating systems when they had the chance until WhatsApp showed up and killed it.
Remember how WhatsApp sold for $19 billion? Yeah, it’s clear that their mindset was another reason for the shortcomings though they were co-CEOs, Balsillie and Lazaridis sometimes didn’t see eye to eye. Many blame this dynamic as the reason for their latest OS BlackBerry’s 10 delayed launched so much that it was no longer competitive.
RIM had the chance to innovate, they had great ideas, and all they had to do was break away from the suit and tie, but they didn’t. They were too confident and too conservative, a deadly combination in this tech world.
Here’s another interesting quote from Balsillie:
”We are a very poorly diversified portfolio. It either goes to the moon or it crashes to earth. But it’s making it to the moon pretty well, so we will stick with it.”
Ouch!
The Demise and Turnaround
People didn’t want blackberries anymore and that hit sales hard. They went from $20 billion dollars in sales in 2011 to just half of that two years later and it continued to fall. Apple and Android stormed the scene.
Manufacturers such as HTC, Samsung and Motorola were willing to provide devices for them yet nobody wanted to work with blackberry or perhaps it was the other way around. It was so obvious that change had to happen. In 2012, after three decades, both CEOs stepped down and Thorsten Heins took over. But, guess what he said:
”We believe that blackberry cannot succeed if we tried to be everybody’s darling and all things to all people. Therefore, we plan to build on our strengths.”
As strength, that was the business world. Had they learned anything? Plus, it’s not like their efforts were enough. New phones like the c30 were just okay. Their long awaited BlackBerry OS was just okay but nothing amazed us like it did in the past. Nothing amazed us like the stuff that Google and Apple were doing. So, just one year later, Heins was gone.
Then came John Chen, he was a realist. The hub was their last effort, it was Android based sleek and very safe. But it failed and after this failure, Chen decided blackberry would stop making phones and sold the manufacturing license to other companies. Massive layoffs ensued, the company’s value plummeted with stock now trading at around $5 dollars and the blackberry logo survives only in a handful of devices sold mostly in Asia.
Blackberry as we knew it was dead. Is that the end of the story? Well, no.
Chen embraces Blackberry’s safety obsession but now as a software company and with this new direction, revenue has slowly increased in the past couple of years.
So perhaps they will make it. For now, all that we can say is that blackberry was the undisputable boss but technology evolves everyday and they weren’t willing to go with the flow which forced them to the bottom where now they must fight their way back up.
