Who killed BlackBerry?

A curious case of assumptions & failures

Aarthi Padmanabhan
Nov 3, 2017 · 5 min read
A cartoon representation by Kipper Williams

As of the year 2016 BlackBerry officially stepped down from the smartphone arena. After 14 years in the making, once a tech-giant BlackBerry decided to stop making its own smartphones by shutting down its hardware manufacturing division. In an official written statement, John Chen, CEO of BlackBerry Ltd said —

“ We are reaching an inflection point with our strategy. Our financial foundation is strong, and our pivot to software is taking hold…Under this strategy, we are focusing on software development, including security and applications. The company plans to end all internal hardware development and will outsource that function to partners.”

The company chose to focus on developing its software and sold the rights to license its brand to handset manufacturer - TCL, a Chinese multinational electronics company to manufacture, distribute, and design future BlackBerry devices.

Its an end-of-an-era for a company that peaked its sales, not so long ago in 2011 when BlackBerry had 50 million active subscribers, selling 14.6 million handsets across the globe, peaking its revenue at a whopping 19.9 billion dollars, the highest-ever in the company’s history.

This decision was a long time coming, after BlackBerry steadily failed to innovate its design in the rapidly evolving smartphone industry. Unforeseeable market change, technological advancements, failure to adapt and be receptive to changing consumer needs saw to the downfall of this once premium selling smartphone empire.

So what went wrong?

Risky assumptions that are not backed by validated hypothesis can have a crumbling effect on the entire problem solution.

“Your assumptions are your windows on the world. Scrub them off every once in a while or the light won’t come in.” - Alan Alda

Ill-fated assumptions can be regarded as one of the many reasons BlackBerry failed to exist in an industry that is evolving at full steam ahead.

Assumed that corporate segment would drive sales

All of Blackberry’s smartphones were built specifically for the use of the corporate world. From BlackBerry Curve 8300, the first of the Curve series released in 2007 which went on to become one of the popular smartphones ever made to the recent BlackBerry Passport in 2014, which received mixed reviews; all of which had similar features like QWERTY physical keyboard, secure connection to internet apps, wireless push email, different file format support - incorporated in it to make devices attractive purely for business consumers.

BlackBerry’s marketing strategy was built around a very niche segment of the market and when certain devices simply did not perform well, they failed to recognize the threats and improvise their design and technology. While the general population were the biggest consumers of smartphones, BlackBerry did little to nothing to tap into this opulent segment which was more promising in terms of sales and revenue.

Assumed that it had room for trial and error

While BlackBerry was focused on iterating its devices for a very small segment, it failed to holistically embrace change in the mobile industry that was going through a major transformation period. Upcoming new players like Google’s Android and Apple were technologically ahead and were revolutionizing the use of a smartphone from mere communication devices to a entertainment rich units.

BlackBerry was intransigent in keeping its infamous QWERTY plastic keyboard and scroll bar in all of its devices at a time when touch screen devices were preferred for viewing videos and better navigation than keypads. Its first full touch screen device BlackBerry Storm was late to the party and was a poor imitation of the first-generation iPhone. It is regarded as the company’s biggest disaster ever after it was heavily criticized for its serious usability issues, software glitches, slow performance and a lack of Wi-Fi.

Down the line, BlackBerry still continued to make phones that were designed poorly with bad user experience, offered low specifications for the price tag, inconsistent third party app support, mediocre performance, poor camera quality all of which eventually led to halting its own device manufacturing altogether in September 2016.

Assumed its competitors were not a threat

When Apple’s first iPhone was released in 2007, everyone wanted in on it. It was considered a fashion statement and a luxury to own an iPhone. Ahead of its time, it was one of the first full touch screen devices built with internet access and computerized functions to be released. Apple stole a considerable share from BlackBerry which was already catering to the well-endowed segment of the market.

In the book Losing the Signal: The Untold Story Behind the Extraordinary Rise and Spectacular Fall of BlackBerry written by Jacquie McNish and Sean Silcoff, Mike Lazaridis, the founder and then CEO of BlackBerry in his conversation with co-CEO Jim Balsillie is quoted saying —

“Jim, I want you to watch this,” he said, pointing to a webcast of the iPhone unveiling. “They put a full Web browser on that thing. The carriers aren’t letting us put a full browser on our products.”

Mr. Balsillie’s first thought RIM was losing AT&T as a customer.

“Apple’s got a better deal,” Mr. Balsillie said. “We were never allowed that. The U.S. market is going to be tougher.”

“These guys are really, really good,” Mr. Lazaridis replied. “This is different.”

“It’s OK — we’ll be fine,” Mr. Balsillie responded.

BlackBerry was late to realize that they were running in competition with iPhone and were terribly behind in technology to catch up. While the first-gen iPhone had a full-fledged Safari web browser to access internet and bagged contracts with AT&T and Verizon for full time data plan, BlackBerry was still technologically challenged and failed to provide its consumers what Apple’s iPhone could.

Assumed that new technology was still in the future

BlackBerry was blindsided with the boom in ‘app economy’; while Google and Apple were monetizing on developers ability to create apps with Android and iOS operating systems, BlackBerry’s inefficient system posed stringent restrictions on developers which curbed many functionalities and resulted in poor looking apps.

WhatsApp and Facebook announced that its applications will no longer be supporting for BlackBerry OS devices by the end of the year 2017. Many products do not consider developing their apps for BlackBerry OS owing to a decreasing number of device users.

In a bid to embrace change Blackberry introduced its first Android device Blackberry Priv in 2015 which was developed to penetrate the larger ecosystem to offer its users to gain access to millions of applications through Google Play Store which was limited in its own BlackBerry App World; combined with classic BlackBerry features — QWERTY keyboard and developed security features. With heavy competition from Apple’s iPhone 6, Samsung Galaxy S6 and Google’s Nexus 6P, BlackBerry failed to make a comeback in what was a decent venture.

End of an era

BlackBerry had a good run in the last decade - as quickly as it reached its pinnacle of success, it fell down like a domino line. One failed assumption after another, all the decisions and failed misconceptions created a recipe for disaster. Failing to — anticipate future, embracing change and exploring new ventures is a lesson to be learned from once an empire that dominated the smartphone industry.

Aarthi Padmanabhan

Written by

Product Lead | Emaar