BlackBuried (noun) – what happens to a once-mighty smartphone maker when it ignores obvious signs of stagnation and falls prey to corporate arrogance.
By now, BlackBerry lovers the world over are hastily staring at other handsets, rubbing their thumbs on that Qwerty keypad like rosary beads, hoping they’ll never have to give them up. They are having panic attacks that they will be forced to a use a touchscreen phone.
Once an unimaginable thing, now a seeming reality, BlackBerry, the one-time king of the smartphone market, is on the ropes, trying to find a way out of the morass it has allow itself to slip into, including selling itself.
It’s a tangle of such complexity, and so many failings, that BlackBerry’s precipitous fall from grace will become the ultimate case study of a market-dominating company and how it plummeted out of contention after leading its industry.
The same might be said of Dell and Nokia, once the largest sellers of personal computers and cellphones, respectively. But BlackBerry, which only this year changed its name from the former Research in Motion (RIM), is a special case for a number of reasons.
There’s no doubt it was widely innovative in its early years. Set up by Canadian Mike Lazaridis, it used existing paging networks to send and receive emails on what are now laughably rudimentary devices, but were cutting edge when the first model launched in August 1998.
Considering most mobile phones just made calls and data transmission was in its nascence, it was revolutionary. RIM would sustain that momentum until that fateful year for the cellphone industry, 2007. In January that year, Steve Jobs announced a radical departure from the Qwerty, small-screened phones of the day with a larger touchscreen and no keyboard. Microsoft CEO Steve Ballmer laughed at it, calling it “the most expensive phone in the world, and it doesn’t appeal to business customers because it doesn’t have a keyboard – which makes it not a very good email machine”.
BlackBerry’s Lazaridis was as dismissive, while Nokia seemed to shrug its shoulders too.
But that titanic shift was lost on these three giants and the most tragic has been BlackBerry, which behaved with arguably the most corporate arrogance. Like the ill-fated Titanic captain with an eye on the end goal but not on the short-term hazards, Lazaridis and his co-CEO Jim Balsillie, steamed ahead, extolling the band to carry on playing.
Balsillie revealed that BlackBerry was more interested in its typing tech than the overall user experience the iPhone offers: “Try typing a web key on a touchscreen on an Apple iPhone, that’s a real challenge. You cannot see what you type,” he said in November 2007, months after the iPhone was on sale and starting setting its sales records.
BlackBerry’s Qwerty keypad is good for typing, but little else, as it discovered – and subsequent attempts to improve the operating system, called BlackBerry 10, were two years in the making – and at least a year too late. Again, an unassailable arrogance predominated, even when Lazaridis and Balsillie where forced out and replaced as CEO by Thorsten Heins, who made moronic comments earlier this year that tablets would be obsolete in five years, despite all evidence to the contrary. Heins is expected to reap $55.6m if the company is sold.
From a high of being valued at $80bn in 2008, BlackBerry’s stock is now worth $5bn, an indictment of failure by a management team amazingly out of touch with reality. It’s unlikely BlackBerry will disappear, so its Crackberry addicts, including US President Barack Obama, need not fear. A consortium of lawyers or law-enforcement officials or diplomats is likely to buy it, at the very least. Otherwise, everyone is going to be learning to use a touchscreen.
This column appeared first on Financial Mail.