Image: BlackBerry Key2, latest model introduced in 2018. Source: BlackBerry
What brought Blackberry down? This smartphone was a phenomenon that grew in popularity and market share for years. Crackberry was a term used to describe this device because it was so addictive for users. Then the Apple iPhone and Google Android entered the scene and Blackberry growth crashed. It could have survived but did not. Let’s take a closer look and learn important lessons on the rise and fall of Blackberry.
Blackberry became one of those companies that captured the imagination of the marketplace and soared. The problem ultimately was its corporate personality. The senior executives got so full of themselves and didn’t see how the world was changing and that the competitive threat was aimed at them.
Blackberry executives attitude brought them down
They thought their customers would always stay with them. They were wrong. Their arrogance and attitude spelled their own disaster.
As long as you take great care of your customers and continue to innovate with important improvements, you can continue to succeed.
If you are slow to innovate, however, and if you show arrogance to your customers and the marketplace, you will fail — especially when you have powerful competitors.
Blackberry started out as a pager. The paging business was robust with many competitors. Then the company emerged from the pack, doing something other pagers couldn’t. The product became a two-way pager and started to own the space.
Next, management introduced the wireless smartphone version and they thought they had struck gold. And they did, for a while.
Blackberry executives thought they were invisible
This rapid success changed the leadership style and attitude of Blackberry and their executives. They thought their future growth was secure. They had little competition in their early years. Basically Palm, Motorola and Nokia were their only well-known competitors. So they had a lock on the smartphone market for a while and grew complacent.
That was their downfall. They never cared about the customer. They never cared about innovation. They had a slow upgrade cycle. They would only upgrade the technology and the handset occasionally. At the time, customers didn’t demand more so they were still OK.
Today, users are used to an annual upgrade cycle from smartphones powered by iPhone iOS and Android.
Also, Blackberry was a business device. I remember speaking with the company when it was trying to expand into the consumer marketplace. While many consumers did use the device, it remained basically a business device.
Early on, it was a solid device that did more than users expected. It had great battery life and was very secure. These were its advantages. And that was enough for the company to maintain its market share, for a while.
The wireless industry changed, leaving Blackberry behind
The app marketplace changed and grew, however, focusing on iPhone and Android and leaving Blackberry behind. While the Blackberry app store had a few hundred apps, the iPhone and Android app stores have grown to millions of apps.
Users fell in love with their iPhone and Android and wanted to use it for business. At that time the business marketplace was slow to embrace these new devices. The big threat was security. While Blackberry was very secure, iPhone and Android were not.
Fast forward to today, and every user, business or consumer uses an iPhone or Android device. Blackberry market share is zero.
Blackberry growth rose and fell over one decade
The Blackberry decade was 2006 – 2016. They sold four million smartphones in the early days. That grew to more than eleven million in 2011. That was its heyday. Then just as quickly, units sold fell back to less than four million again.
By this point, the smartphone market had exploded and so many more users were online. So, four million at the end of that decade was actually a much smaller slice of the marketplace than it was at the beginning.
Smartphone growth came from Apple and Google, not Blackberry. This was the beginning of the end for this iconic brand.
I met with management several times and shared my opinion of what they were up against and how they needed to change. They had an arrogance problem. They thought I was crazy. They never doubted their solid marketplace position. They didn’t need anyone’s help. Then they collapsed completely and quickly over just a few short years.
Blackberry didn’t see the end coming until they collapsed
They didn’t see it coming. By the time they did, it was too late. In 2016, the writing was on the wall and Blackberry stopped making their own phones.
In 2016 the company licensed the brand and handset business to partners, with TCL, a Chinese electronics and technology company, acquiring near global rights. Blackberry stayed in the security software business with hopes it could stay alive.
Earlier this year, TCL announced it will be no longer selling Blackberry after August 31, 2020. Blackberry does have a couple of manufacturing partners in South Asia and Indonesia, but TCL had the rights for all of the other regions.
I told management early on that they needed to move away from their Blackberry OS to the Android OS. Android was a big success already and Blackberry was dying on the vine. This was their only hope for success. They ignored my advice year after year.
By the time Blackberry went Android, it was too late
After trying several new smartphones which fell on deaf ears, they eventually introduced an Android device. By that that time, however, it was simply too late.
Their growth curve had risen for five years until 2011, then it started to fall. At the end of a ten-year stretch, they were back to where they started. Except by this time, the thrill had died and there was nothing left upon which to build.
The growth curve rises, crests and falls. You want to keep pumping it while it is growing. Once it crests and falls, it is very difficult to re-ignite the next growth wave.
The most recent Blackberry Key2 was introduced in 2018. Nothing since. This was the way Blackberry always did business. They were always a day late and a dollar short.
Today, there is no sizzle behind the Blackberry brand.
When it had no real competition in a new marketplace where users had no expectations yet, that was fine. But today consumers and business customers expect and even demand continual updates to both the handsets and the OS. Something Blackberry was just never able or willing to do.
The Blackberry name is still around, but it is a much smaller and less powerful competitor in the wireless space. Today, it is more like a gnat buzzing around your face. It’s there but has no real impact.
This is the sad story of an industry leader that helped create the smartphone industry. Its place in history will be there forever.
This is also a lesson, however, on how executives and companies have to create, nurture and grow their relationship with their customers, whether they be individuals, companies, governments or the media.
Today, companies need to innovate regularly with real, meaningful, relevant steps forward. That means continuing to create and expand value. Simply redesigning the keyboard with no added benefit only creates anger from your customer base.
No matter how successful you become, you are only as good as your last quarter. Any company’s standing in the world can be pulled out from under it virtually overnight, even if there appears to be no real competitor in a space. Every entrant needs to stay alert, stay on the growth side of the growth wave, and always WOW their customers.
This is where Blackberry went wrong.
Jeff Kagan is an Equities.com columnist. Kagan is an Industry Analyst, Thought Leader and Influencer focused on Wireless, Telecom, Pay TV, Cloud, AI, IoT, Tele Health, Healthcare, Automotive and Self-Driving cars. Email him at [email protected]. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan and LinkedIn www.linkedin.com/in/jeff-kagan/
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Equities Columnist: Jeff Kagan
Source: Equities News
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