BlackBerry in Mobile phones market: An Eventful Journey, from Hero into Down Star

Mobile phones have been subject to incessant evolutionary strides ever since its inception in 1984
(Motorola DynaTAC 8000X). In 1999, BlackBerry rebranded itself from RIM (Research in Motion) and
came up with the mobile phones which had email services in-built in it. The BlackBerry's phones grew
swiftly in popularity during the early 2000s, and by 2005 had become highly influential. The growth
really took off after the attacks of September 11, 2001, when the BlackBerry’s were the most reliable
devices in use that day. The company gained the large-number orders from governments in the United
States and in Canada.
At a time when mobile phones were primarily used for calling and texting, the introduction of the model
BlackBerry 5810 into mobile phone market (2002) was of innovative by kicking off the concept of
smartphone, a device that could handle emails, browsing and more which had been performed generally
by computer along with the use of Internet before but then all fitting into your pocket. Hence, the word
“BlackBerry” was, once, metaphorically used as a sole synonym to represent mobile phones. In this
period, BlackBerry had also come up with their BlackBerry messenger (BBM) that offered corporate
users the remarkable service of ‘push-email’ which allowed instant text communication from anywhere in
the world in 2005. This was another key contributing factor to the success of their smartphones and
became prevalent so that it brought its own vocabulary to the English lexicon, the “Crackberry”. The
elegant keyboard and the BBM system were immensely popular during that time, and people considered
having a BlackBerry a status symbol which was used to adorn the demeanor of executives and
businessmen at that time. They became the most important accessory for those in leadership and powerful
positions. At its peak, BlackBerry controlled almost half of the global smartphone market (2009).
Figure 1. Smartphone Platform Market Share, 2009-2016

*January-June
Source: Business Insider
But those heydays did not last long as the exuberance of BlackBerry fervour started decreasing with the
entry of iPhone into market in 2007. BlackBerry started facing setbacks after having monopoly in the
market for a time. Step by step, the once monument witnessed near collapse, just within a few short years.
The company lost its way.
The iPhone didn't kill RIM immediately. BlackBerry didn't view the iPhone as competition since it didn't
cater to the business market. In the early stages of new competition, when its monopoly in the smartphone
market was gradually broken down as the iPhone quickly became popular after its launch, BlackBerry
still remained market leaders and was growing in sales till the year 2011. In Fortune's list of the Fastest
Growing Companies of 2009, BlackBerry ranked first, while the BlackBerry Curve became the best-
selling smartphone in the U.S. in 2009. For revenue, the year 2011 was a land mark year as the company's
revenue has reached its peak during 2011 of $19.9 billion, nearly seven times higher compared to 2007.
The loss in the North American market to emerging competitors was offset by a boom in the global
market. The continuous improving its product line after developing pagers and two-way communication
devices also helped the company to increase revenue constantly. But, once Apple (iOS) and Google
(Android) started penetrating the world market, which not just aimed at individuals, but also managed to
attract business leaders, penetrating BlackBerry’s core market, BlackBerry lost its market share to its
competitors, causing a vertical fall after one year.
Figure 2: BlackBerry’s Revenue, 2004-2016 (in Million USD)

Source: Statista

BlackBerry's mobile phone sales have been in steady decline since 2011, despite decisions to migrate
from its own BlackBerry OS to Android to provide apps and easier integration with more popular
smartphone systems in 2015. WhatsApp messenger and other texting platforms also undermined
BlackBerry’s most significant feature. This led to speculation that it will be unable to survive as an
independent going concern. In the last quarter of 2016, out of more than 432 million smartphones sold
worldwide, only 207,900 were BlackBerry devices, which officially made RIM's smartphone market
share 0%. Finally, in Sep 2016, BlackBerry shut down its phone business after 14 years of making
handsets and the Chinese consumer-electronic company TCL essentially bought the BlackBerry phone
brand. The story of the once-time renowned mobile manufacturers of BlackBerry has been often called
one of the most spectacular upsets of this century.
Figure 3. The Rise and Fall of BlackBerry in term of Sales of Smartphones, 2009-2016 (million devices)

Source: Business Insider

Businesses in technology often experience rapid disruptions as things tend to change very quickly, with a
developing market and shifting trends. While this has been a universal truth that has affected numerous
businesses, few have seen the dramatic fall that BlackBerry saw in market share and value.
The biggest causes leading to the BlackBerry's failure was basking under the shade of past glory, by
overlooking the emerging aspirations of customers and also attributed to the company's leadership.
Frankly, RIM/BlackBerry had good adaptive cycles in the period of 1999 to 2007. It was also
continuously able to innovate, starting from pagers, moved on to phones, smartphones and then, adding
features to it like, messenger and email facilities along with that of BlackBerry messenger. The company
could generate billions of dollars with an addictive smartphone and outsmart its competitors through a
combination of sharp-elbowed tactics and innovation. This went smooth till the launch of iPhone phones,
which claim to have reinvented the cellphones. This led to the occurrence of cyclic adaptation
misalignment of BlackBerry.
BlackBerry’s speed to change was slow. Its company ethos was built around designing a great product
and they would add small features over time.
“We have a proverb here at RIM and it is ‘do your math’. The company culture at BlackBerry
is to check twice and look in detail before proceeding further with any changes, and ask
customers before we undertake them. If we work long enough, we know users will find value in
our products”
ex-CEO Mike Lazaridis
BlackBerry underestimated how quickly the smartphone market was changing. There was a new updated
iPhone every year, and other smartphones, like the Motorola and Samsung, began to hit shelves.
Besides that, despite continuous improving the existing models it had, the company never thought about
radical improvement in the technology field, or redesigning the products, which was actually done by its
market rivals Apple and Google. It was errors in its strategy and vision. First, after growing to dominate
the corporate market, BlackBerry failed to anticipate that consumers — not business customers — would
drive the smartphone revolution. At the apex of its glory, BlackBerry's management was more focused on
just improving the business rather than focusing on research and development for any commanding
innovation. The company CEO's believed their corporate customers were happy with their product at that
time and refused to compete in a crowded market for individuals. Second, BlackBerry failed to realize
that smartphones would evolve beyond mere communication devices to become full-fledged mobile
entertainment hubs. As since the late 2000s, the smartphone landscape has begun to shift dramatically.
Consumers were no longer content with just email and messaging capabilities; but craved multimedia
experiences, touch interfaces, and a plethora of apps to make their lives easier and more entertaining. The
demand for smartphones that could serve as all-in-one entertainment hubs began to rise, and BlackBerry's
business-centric model started to show its limitations. While competitors like Apple and Google were
busy pushing the boundaries of what smartphones could do, BlackBerry seemed stuck. The company
continued to focus on its traditional strengths—secure email services and a physical keyboard. The matter
of understanding through ample customer relations and mapping their requirements were ignored. They
failed to understand the need to make big, sweeping changes in its features that could have surprised and
delighted its customers.
“It wasn't necessarily the iPhone itself that killed the BlackBerry - but its creators' response to
it.”
Matt Johnson, Canadian maker of “BlackBerry” film (2023)
Compared to Apple and Google's full-touch-screen devices having intuitive and user-friendly design
along with its excellent operating system and many crucial features which were actually lacking in case of
BlackBerry; BlackBerry failed to compete with unpopular and poorly designed smartphones with a
rudimentary browser that limited the usage of data. But, even in response to clear competitive threats, the
learning curve of BlackBerry also went down worryingly. There was a clear delay trend in the launch of
new products and technologies of BlackBerry in the years of 2008-2009, left the company lagging further
behind. This gave way for the competitors to come up with disruptive technologies. When BlackBerry
slowly turned back to the race with a modification in the new products to combat its competition, its
competitors had continuously worked and improvised on their products and already reached their next
stage in adaptive cycle. But by launching new products hurriedly, to speed up adaptation, in fact,
BlackBerry was burning its finger once again due to lacking of any ground breaking innovation.
BlackBerry's App World application store (2009) never left much of an impression on users. New
smartphone, like Storm (2008) and BlackBerry Series 10 (2013) and the tablet Play Book (2011) had their
own flaws and failed miserably in the market. This had affected the company adversely due to low
quality product to the market just to receive further setback. Infrequent or sporadic modifications of
BlackBerry was not successful when the customers demand a comprehensive refinement and user
empowerment.
Some of the other decisions taken by BlackBerry management were also not consistent with the industry
environment. For instance, when other competitors started introducing a diversified portfolio of products
for meeting the needs of the maximum number of customers, BlackBerry’s leadership made decisions to
shrink their product lines from 6 devices to 4 in Sept, 2013. The resignation of Mike Lazaridis and Jim
Balsillie, the co-chief executives of BlackBerry in 2012 for a new strategic course with a fresh
perspective did not make the situation better. It was simply too late.
A look back at the BlackBerry's Timeline in Mobile phone market
1999: RIM starts selling its first BlackBerry device, the 850, with mobile email.
2002: RIM introduces BlackBerry 5810 added voice calling capabilities.
2003: RIM releases its first BlackBerry with a colour screen.
 2004: RIM marks its 20th anniversary announcing it has passed the one-million subscriber
mark. By year’s end it has more than two million subscribers using its devices.
2005: RIM hits four million subscribers.
2006: BlackBerry releases the first in a line of consumer-friendly Pearl devices, adding a
digital camera and multimedia capabilities.
2007: RIM becomes the most valuable company on the TSX with a market capitalization
surpassing $67 billion. The company has 10 million subscribers and introduces the first of its
Curve BlackBerrys. But RIM is caught flat-footed by the overwhelming response to Apple’s
new iPhone.
2008: RIM's first touchscreen BlackBerry, the Storm, is critically panned as iPhone hype grows
with the new 3G model.
2009: BlackBerry launches its App World marketplace to compete with Apple’s App Store. Its
selection pales in comparison, a problem that is never solved.
2010: RIM surpasses 40 million users and announces it has shipped its 100 millionth
smartphone. It buys Ottawa-based QNX Software Systems, which would help reshape its
operating system software going forward.
In 2011: After the first iPad hits the market (2010), RIM unveils its Play Book tablet, and
reviews are not kind. The company announces it’s cutting 2,000 jobs.
2012: Lazaridis and Balsillie step down as co-CEOs and are replaced by Thorsten Heins. 5,000
people are laid off and the critical BlackBerry 10 software update which is seen as the
company’s last chance to stay alive is delayed.
2013: BlackBerry 10 and the first two smartphones to use the operating system, the Z10 and
Q10 are unveiled. The phones don’t sell well enough to bolster its fortunes. In August, the
company says it is open to “strategic alternatives” including a possible sale.
2016: BlackBerry stops producing mobile phones

Source: Global News

BlackBerry's journey is a rollercoaster ride of innovation, market dominance, and eventual decline.
Lessons from successes in the years before 2007, the years pre-iPhone, led to BlackBerry's strategic
misalignments. The company did not change its historically successful approach in post-iPhone's
birth. Lack of visionary leadership, failure to continuously innovate with the changing trend of
technology and consumer preferences, and inability to see the potential competition have caused the
inevitable demise of BlackBerry.
APPENDIX
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