{"id":6186,"date":"2018-02-01T14:31:17","date_gmt":"2018-02-01T19:31:17","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/the-rise-and-fall-and-rise-again-of-blackberry\/"},"modified":"2018-02-01T14:31:17","modified_gmt":"2018-02-01T19:31:17","slug":"the-rise-and-fall-and-rise-again-of-blackberry","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/the-rise-and-fall-and-rise-again-of-blackberry\/","title":{"rendered":"The Rise and Fall (and Rise Again?) of BlackBerry"},"content":{"rendered":"

In many ways, BlackBerry was the producer of the world\u2019s first widely-adopted premium smartphone brand. At its peak, Blackberry owned over 50% of the US and 20% of the global smartphone market, sold over 50 million devices a year, had its device referred to as the \u201cCrackBerry\u201d, and boasted a stock price of over $230. Today, BlackBerry has 0% share of the smartphone market and has a stock price that has hovered in the high single digits for most of the past few years. How did BlackBerry fall from such soaring heights?<\/p>\n

First, a little bit of history. BlackBerry was founded in 1984 (as Research in Motion) and was originally a developer of connectivity technology like modems and pagers. In 2000, the company introduced its first mobile phone product in the BlackBerry 957, which came with functionality for push email and internet. Over the ensuing decade, the BlackBerry became the device of choice in corporate America due to its enterprise-level security and business functionality. Even after the competitive entry of the iPhone in 2007 and Google\u2019s Android OS in 2008, BlackBerry was certainly not destined for failure. In fact, BlackBerry continued to dominate the smartphone market through 2010, when it still held over 40% of domestic and nearly 20% of global market share.<\/p>\n

\"\"<\/a><\/p>\n

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BlackBerry US Market Share Evolution. Source: ComScore<\/figcaption><\/figure>\n
\"\"<\/a>
BlackBerry International Market Share. Source: Statista<\/figcaption><\/figure>\n

Ultimately, however, it was a combination of slow market reactions, focusing on the wrong end market, misunderstanding the smartphone\u2019s value proposition, and poor execution that sealed BlackBerry\u2019s fate.<\/p>\n

Slow market reaction to competition.<\/strong> BlackBerry\u2019s leadership initially dismissed Apple\u2019s touchscreen iPhone, insisting that users preferred their physical keyboard. When the iPhone sold well, BlackBerry hastily released a touchscreen device (BlackBerry Storm), which often didn\u2019t work properly and was met with horrendous reviews. Subsequent devices reintroduced the keyboard in a combo touchscreen-keyboard setup (e.g., BlackBerry Bold), which momentarily stemmed the tide, but would eventually prove misguided as the market continued moving toward larger screen real-estate.<\/p>\n

\"\"<\/a>
BlackBerry Bold. Source: Amazon.com<\/figcaption><\/figure>\n
\"\"<\/a>
BlackBerry Storm. Source: eBay.com<\/figcaption><\/figure>\n

Focusing on the wrong end market<\/strong>. As Apple and Google made smartphones accessible to the mass consumer by creating slick user interfaces and attractive apps, BlackBerry remained doggedly focused on its enterprise customers and their security and connectivity requirements. This was the traditional innovator\u2019s dilemma at work \u2013 BlackBerry catered to its most important customers that generated most of its revenue and profits, and hence neglected the end market that would ultimately become the most important. When enterprises adopted \u201cBring Your Device\u201d policies, it was no surprise that employees began replacing work BlackBerries with personal iPhones or Android phones en masse.<\/p>\n

Misunderstanding the smartphone\u2019s value proposition. <\/strong>In part due to its enterprise focus, BlackBerry innovated primarily around feature improvement \u2013 faster email, better security, etc. In doing so, it missed the value proposition of the smartphone as a platform for personal productivity and entertainment. While Apple and Google built a moat around their third-party app ecosystems, BlackBerry\u2019s insistence on first-party development made its devices far inferior. Even its most popular app, BlackBerry Messenger (BBM), was leveraged ineffectively \u2013 by mandating that BBM be installed only on BlackBerry devices instead of building up a larger user base across platforms, BlackBerry missed the opportunity that third-party messaging apps like WhatsApp eventually took advantage of.<\/p>\n

Poor execution.<\/strong> Even when it did try to adapt, BlackBerry couldn\u2019t execute properly. The launch of the touchscreen Storm in 2008 was a colossal failure. The 2010 release of the Playbook tablet was largely derided for a lack of native email, calendar, and contacts applications. Even its more recent incarnations, like the BlackBerry Priv in 2015, suffered from ineffective product launches, poor functionality, and incoherent value propositions.<\/p>\n

It\u2019s not surprising that BlackBerry lost the smartphone wars. But BlackBerry\u2019s story may have another chapter that is yet to be written. Since bringing on turnaround veteran John Chen as CEO in late 2013, BlackBerry has given up on producing phones and has reinvented itself as a software and services business. Leveraging a portfolio of enterprise security products and riding the wave of automotive innovation with its QNX system, Chen seems to have righted the ship. In its most recent quarter (Q3 2017), BlackBerry reported 7% growth in software and services and guided to 10-15% growth for the year. In the autonomous vehicle space, BlackBerry has partnered with Baidu, Nvidia, and Qualcomm to secure their software. Investors have rewarded the company \u2013 its stock price now sits around $13 per share, a level not seen since mid-2013. Though the situation looks more promising than it has for a long time, only time will tell whether BlackBerry will rise again.<\/p>\n

\"\"<\/a>
BlackBerry Stock Price. Source: Google Finance.<\/figcaption><\/figure>\n

Sources:<\/strong><\/p>\n

\n
    \n
  1. BlackBerry Financial Reports.\u00a0https:\/\/us.blackberry.com\/company\/investors.<\/li>\n
  2. \u201cBlackBerry Doubles Down on Car Software With Hack Protection.\u201d Bloomberg.Com<\/i>, January 15, 2018. https:\/\/www.bloomberg.com\/news\/articles\/2018-01-15\/blackberry-doubles-down-on-car-software-with-hack-protection<\/a>.<\/li>\n
  3. \u201cBlackBerry Jumps as CEO Forecasts High End of Revenue Range.\u201d Bloomberg.Com<\/i>, December 20, 2017. https:\/\/www.bloomberg.com\/news\/articles\/2017-12-20\/blackberry-beats-estimates-on-new-government-software-contracts<\/a>.<\/li>\n
  4. Dunn, Jeff. \u201cHere\u2019s How Dramatic BlackBerry\u2019s Fall Has Actually Been.\u201d Business Insider. Accessed January 31, 2018. http:\/\/www.businessinsider.com\/blackberry-phone-sales-decline-chart-2016-9<\/a>.<\/li>\n
  5. Reed, Brad. \u201cWhy the BlackBerry Storm Was the Single Biggest Disaster in Smartphone History.\u201d BGR<\/i> (blog), May 25, 2015. http:\/\/bgr.com\/2015\/05\/25\/worst-smartphone-ever-blackberry-storm\/<\/a>.<\/li>\n
  6. Savov, Vlad. \u201cBlackBerry\u2019s Success Led to Its Failure.\u201d The Verge, September 30, 2016. https:\/\/www.theverge.com\/2016\/9\/30\/13119924\/blackberry-failure-success<\/a>.<\/li>\n
  7. Vara, Vauhini. \u201cHow BlackBerry Fell.\u201d The New Yorker<\/i>, August 12, 2013. https:\/\/www.newyorker.com\/tech\/elements\/how-blackberry-fell<\/a>.<\/li>\n
  8. Warren, Christina. \u201cBlackBerry Bust: RIM Takes a $485 Million Hit on the Ailing PlayBook.\u201d Mashable. Accessed January 31, 2018. https:\/\/mashable.com\/2011\/12\/02\/playbook-485-million-charge\/<\/a>.<\/li>\n
  9. Woods, Ben. \u201cThe Road to BlackBerry 10: The Evolution of RIM\u2019s OS and BES.\u201d ZDNet. Accessed January 31, 2018. http:\/\/www.zdnet.com\/article\/the-road-to-blackberry-10-the-evolution-of-rims-os-and-bes\/<\/a>.<\/li>\n<\/ol>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    The roller coaster journey of the world's original smartphone leader.<\/p>\n","protected":false},"author":2459,"featured_media":6193,"comment_status":"open","ping_status":"closed","template":"","categories":[102,39],"class_list":["post-6186","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-loser","category-smartphones","hck-taxonomy-organization-blackberry","hck-taxonomy-industry-information-technology"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/digital-winners-losers-2018\/","yoast_head":"\nThe Rise and Fall (and Rise Again?) of BlackBerry - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/the-rise-and-fall-and-rise-again-of-blackberry\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Rise and Fall (and Rise Again?) of BlackBerry - 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