Blackberry Case: How did it go from being the market leader to failure?
The protagonist of this story is the Blackberry brand, developed by the Canadian company Research In Motion, better known as RIM, which was founded in 1984 by entrepreneurs Jim Balsillie and Mike Lazaridis.
RIM‘s first big breakthrough in technology came in the fall of 1996 when it released one of its first portable devices: the Interactive Pager 900, a shell-shaped device that allowed you to send and receive messages. After the success of this device, the Interactive Pager 800 would arrive, a product that would also have an excellent reception. Finally, in the summer of 1998, the Interactive Pager 950 would arrive, the latest in this successful series that helped solidify RIM‘s position in the market and paved the way for its flagship devices.
On January 19, 1999, RIM introduced a product that would become a milestone in mobile device history: the Blackberry 850, the company’s first model to integrate email. This device had a screen resolution of 132 x 65 pixels that allowed eight lines of text to be read, a characteristic external keyboard, and a side wheel for scrolling the interface. Additionally, it employed the DataTAC, a wireless network data technology developed by Motorola. This product was launched in the city of Munich, Germany, and externally it was not very different from the Pager 950; however, the mere fact of allowing emails to be sent was already a fairly significant plus at that time. As a curious fact, the name of this popular product was established by a marketing company called Lexicon Branding, which considered that the buttons of the 850 were similar to the drupes that the blackberry is made of.
Shortly after, the Blackberry 857 would arrive, a device that also used the DataTAC and that became very popular among top company executives thanks to the fact that it allowed them to be connected all day receiving and sending emails. Among its main users were Wall Street stockbrokers, who could follow their investments minute by minute and market changes via email. That is how it quickly became common to see many people in suits typing on their Blackberrys in the street, on the subway, in offices, and restaurants.
Revolutionizing the mobile device industry
In 2002, the first mobile phones with the ability to integrate with “push mail”, text messaging, fax, and rudimentary web browsing would arrive. These options were possible on the 5810 and 6710 models. In parallel, Blackberry began offering email service to other non- RIM devices, such as the Palm Treo, through its Blackberry Connect software.
The first products of the brand had a monochrome screen. Over time, more modern devices began to develop a color screen.
Starting with the 2002 model year, the thumb-optimized keyboard design emerged, making it much more comfortable and efficient for users. Also, with the appearance of the Storm 1 and Storm 2 models, a “SureType” keyboard would be included; that is, a keyboard that, unlike the traditional one organized alphabetically, uses the QWERTY format that makes writing more effective with a new organization of signs.
As for navigation in the system, before the Blackberry 8700 appeared on the market, it was done with the device’s side wheel. Later, the front “trackball” began to be used, which allowed it to move in four directions and not just in two, as in the brand’s Pearl range.
In 2005, Blackberry launched one of the first instant chats between mobile phones in history, which allowed users of their devices to communicate with each other via text messages without paying any additional cost. The messages were sent through a unique PIN code that served to identify each device, for this reason, communication was only possible between two terminals of the brand.
The success of this new service attracted widespread interest among ordinary people who, far from offices or the hectic life of Wall Street, were looking to buy one of these phones to be fashionable and chat with their friends. Sales and shares of the company skyrocketed, in just 3 years it had a growth of 84%. VIPs like Barack Obama weren’t afraid to say publicly that they used a BlackBerry. Even the Department of Defense and the Federal Government of the United States began to use the devices and provide them to all their workers.
By 2007, the brand had gone from the small niche of entrepreneurs, investors, and government agencies, to the general public, with millions of handsets sold worldwide; however, this success would be threatened by companies like Apple, who envisioned a different future than the one envisioned by RIM in the realm of mobile devices.
Ignoring market changes and trends
On June 29, 2007, Apple launched the iPhone, a phone with a touch screen, its own operating system, a very easy-to-use graphical interface, and an incredible facility for independent developers to create applications for said device, which considerably expanded the functionalities of a traditional mobile phone.
For its part, RIM did not take the launch as a threat, because it believed that these phones were aimed at a younger audience, which they were not focused on with their BlackBerry terminals. However, the success of the iPhone was overwhelming. More and more people of all ages were buying an Apple phone because of its ease of use, its wide variety of features, and because it became a status symbol.
Little by little, BlackBerry was losing market share, but it was still clinging to those users who were not ready to write on a touch screen and preferred the physical keyboard on their phones.
Meanwhile, the giant company Google decided to bet on creating a mobile operating system very similar to Apple‘s, which would allow creators great flexibility to make applications and work on all types of touch devices. He called this system: “Android” and, over the years, it gained a significant market share until it competed directly with Apple in terms of the number of devices that had said operating system.
Despite the radical changes proposed by its competitors, RIM did not realize that its terminals were becoming obsolete: its operating system was quite basic, many of its devices had very few features and the number of applications was zero due to the difficulty it was for developers to work for the BlackBerry OS platform. However, the market had not changed significantly. Until 2009, the RIM company led in sales and its shares did not stop rising. This made managers “rest on their laurels” and think that users would continue to prefer their mobile phone models no matter what the competition did. Manzanaand Google, for their part, focused on developing new technologies that would be the basis for the smartphone industry in the future.
Adapting to survive
When RIM realized that touch screens were gaining popularity in the market, it decided to venture into launching its own devices with this technology. This is how the Blackberry Z10 models arrived on the market, which had a hybrid system of physical keys and a touch screen; and the Q10, which was completely touching, but the receptivity of the users was not what was expected and both failed miserably in sales.
Later, the company launched the Curve 8500 range, which began to integrate a touch keyboard. Once again, sales were well below expectations, and RIM was forced to lay off about 40% of its staff in operational positions, that is, about 4,500 workers, in addition to reducing its catalog to only four products.
The directors of the company could not explain the reason for the low sales if they were offering touch screens like the other competitors, but their big mistake was not realizing that the real disruption in the industry had been the application stores that offered the user a Lots of tools to boost your devices. In just a few years, mobile phones had gone from being used exclusively for making calls, receiving them, and sending text messages, to being powerful devices that could play music, take photos, store large files, play games, surf the Internet, and even allow see the most popular social networks of the moment; something that blackberry, due to the limited features of its hardware and the complexity and closedness of its operating system, it could not allow. Their terminals could barely provide 30% of the applications that iOS and Android devices had.
The decline of Blackberry
In 2009, the signs of exhaustion of the brand began to be seen. On one occasion, BlackBerry suffered several service outages that, fortunately, affected a few regions and were quickly resolved. But this problem would be repeated a couple of years later when there was another blackout that affected the entire network and lasted for several days. This incident left the company’s image quite affected, causing a loss of trust among users.
In 2011, the Blackberry Playbook was launched, a tablet that came to compete against products such as Apple‘s iPad, Samsung‘s Galaxy Tab, and Amazon‘s Kindle Fire. Although the expectations with this launch were high, it ended up being a total failure in sales, leaving the company with significant losses.
In 2013, sales of Nokia’s Lumia terminals surpassed BlackBerry‘s for the first time, something that was impossible to ignore and confirmed the problems the company was facing.
As a marketing strategy to respond to losing market share, the company decided to rebrand Research In Motion as BlackBerry. However, this was of little use, as sales continued to fall and the executives decided to put the company up for sale months later.
While the purchase offers began to arrive, John S. Chen temporarily assumed the presidency of the company and was in charge of rejecting all the proposals, arguing that this was not the best thing for the shareholders, the workers, the clients, and the suppliers. Chen opted to get BlackBerry back on track for success, and as a result, managed to be appointed CEO until 2020.
Under Chen‘s direction, new device models were launched, such as the “Passport”, which featured a 4.5-inch square full HD screen. Also, updates were made to the operating system itself, BB10; and the BlackBerry Messenger application was released to work on iOS, Android, and Windows Phone devices, this was a strategy to expand the reach of the brand, but users had already been able to connect through WhatsApp since 2009. According to some experts, BlackBerry MessengerIt could have become the quintessential instant messaging application, but they were late in realizing the opportunity.
In 2014, the“Classic” was launched, looking similar to models in the Bold range and with navigation buttons similar to those of old phones, indicating that the brand preferred to return to the popular physical keyboard instead of the following experimenting with the touch screen. This “Classic” model would become the last phone manufactured with a keyboard on the front.
In 2015, the Blackberry Priv would arrive, a phone with a sliding keyboard and an 18-megapixel screen. The “Priv” was the first phone with an Android operating system built by Blackberry and would be the one that would mark the beginning of the end of its mobile platform. Although it was considered by experts to be a good phone, it was not very successful.
In July 2016, the DTEK50 would arrive, the last terminal manufactured and marketed by the brand before it decided to permanently close its production line since the brand failed to regain its position in the market and lagged behind the innovations of the competition.
As a measure to avoid the complete disappearance of its smartphones, Chen reached an agreement with the Chinese multinational TCL, manufacturer, among others, of Alcatel mobiles, to develop and launch Android phones under the name of BlackBerry. Thanks to this alliance, the DTEK60 mobile arrived, with a 5.5-inch touch screen. Later, the Blackberry Key models, the Blackberry Key 2, and the KeyONE, with a physical keyboard, were released.
As public interest in Blackberries had plummeted since 2013, largely due to the lack of vision and strategy of its leaders, by 2020 the outlook was quite negative. The deal with TCL ended without much glory and the name was immediately picked up by US startup Onward Mobility, a little-known entity headquartered in Austin, Texas. With this company, a Blackberry 5G model was manufactured, which worked with Android and, like everything in the recent history of the brand, did not mean anything special: it’s lag compared to other phonesApple Android was gigantic and unsurpassed.
What will be the future of BlackBerry?
Recently, Blackberry announced its decision to stop supporting old mobile phones that still had their operating system, as well as abandoning the field of smartphones. It now intends to focus all its efforts on supplying security software and services to businesses and governments around the world under the name Blackberry Limited.
Thus we conclude the story of BlackBerry, a mobile telephony giant that became one of the most emblematic companies of the 2000s, but that was unable to understand the changes in the market in time and lagged behind competitors who did not stop innovating until laying the foundation for the next generation of mobile devices. A clear example is that, no matter how successful we are, we must always be able to reinvent ourselves to stay current, since markets and users are constantly evolving and only those companies that are agile and flexible enough to adapt to the changes that are generated survive.