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Going Out of Business – BlackBerry

What pops into your mind when I say a smartphone?
Apple? Samsung? Probably something in that zone.
But there was a time when none of these existed,
BlackBerry, once the king, is where it all started.
Seen as a status symbol since its arrival,
No one imagined it would one day be fighting for its survival.
So, what transpired from 1984 to 2016,
That it had to quit the smartphone business and no longer be seen?

BlackBerry started as ‘Research in Motion’ (RIM) in 1984, a time when mobile phones were a foreign concept to the everyday people, and communication happened via pagers. It was founded by two Canadian engineering students in their 20s – Mike Lazaridis and Douglas Fregin. Before coming up with its iconic creation, RIM had to work on varied projects and witness failure as well. Their first business was making LED signs (Budgie, a wireless display system to communicate with the workers on assembly lines) for General Motors. But it didn’t fare well, so they moved on to another project – the DigiSync Film Barcode Reader that eased the struggle with time and frame calculations post-production of movies. This technology showed great promise and even went on to win an Emmy Award and an Academy Award for technical achievement! Yet, this was not what the founders had in mind when they started RIM. Their ambition, and thus RIM’s, had been ‘wireless data’ from the start.

Research in Motion set on its path to developing the technology that would be used in pagers and wireless systems. They agreed with Ericsson’s Mobitex, a wireless network technology. In a CES keynote in 1992 Apple’s CEO, John Sculley coined the term ‘personal digital assistants’ to describe small, handheld computers. However, while Apple was working on this PDA tech like most big companies, it did not believe that a wireless version was feasible due to a lack of infrastructure for two-way wireless communication. Lazaridis, on the other hand, saw it as an engineering challenge and with the help of the Mobitex wireless network, created a pocket-sized, keyboard-based, two-way pager in 1996 – the [email protected] Pager or RIM 900. It was a huge hit as along with two-way paging, it provided peer-to-peer messaging, the ability to send faxes, and a gateway to email. Its successor, the 950, was the first device that could replace a PC with its wireless connectivity and superior keyboard. Thus, Lazaridis’ perseverance to make ‘wireless communication’ a reality, and the decision to hire Jim Balsillie who could navigate RIM through the high-stakes business world, led to its success in the 1990s.

After this, there was no stopping RIM (at least for a while). In 1999, it received FCC approval to begin selling its first BlackBerry device. Its main feature was the ‘email’. It caught the eye of business professionals, politicians, lawyers, and journalists; and once seen in the hand of the influential, it was no longer just an email reader but a ‘status symbol’. It came to be known as ‘CrackBerry’ as people got addicted to the feeling of always being connected with the BlackBerry Messenger. RIM’s sales increased by 80 percent, to $85 million, in the BlackBerry’s first year; and it raised $255 million when it went public in 1999. The 9/11 terror attacks made a case for BlackBerry, as when other phone systems failed, BlackBerry’s network provided secure backup communications. In 2002, it released its first model that could be called a mobile phone – the BlackBerry 5810 with voice calling capabilities. In 2006, RIM tapped the regular market and introduced consumer-friendly BlackBerry Pearl devices that included a digital camera and media playback. By 2007, RIM had 10 million subscribers and was earning $3 billion in revenue. It was all looking good.
Then came the launch of the iPhone, a competitor that was about to redefine the way people perceived smartphones. On January 9, 2007, Steve Jobs introduced the world to iPhone by saying, “Every once in a while, a revolutionary product comes along that changes everything”. He picked four smartphones that were leading the industry – Motorola’s Moto Q, Palm Treo, Nokia E62, and BlackBerry Pearl – and pointed out the unnecessary buttons that made up the keyboard. “What we’re going to do is get rid of all these buttons, and just make one giant screen”. This was a huge leap in innovation and is what eventually led to the downfall of BlackBerry. BlackBerry didn’t consider Apple to be its competition as it catered majorly to the business market, while Apple focused on consumers. And Lazaridis, though respected Apple’s design acumen, believed superior hardware would be advantageous as “Not everyone can type on a piece of glass. Every laptop and virtually every other phone has a tactile keyboard”. BlackBerry phones continued to sell for a while since iPhones were more expensive and exclusive to AT&T; and the majority of people just didn’t want to give up their keyboards. It dominated the smartphone market through 2010 and held 40 percent of domestic and 20 percent of global market share. But this was short-lived.

RIM underestimated the success of touch-screen smartphones, and with every newly updated iPhone, it fell further behind. While it’s understandable why they didn’t wish to throw away the goodwill they had built over the years (businesses and governments relied on its security, reliable email, good battery life), it’s a fact that the smartphone market was changing rapidly. RIM tried to roll out its touch-devices, like the Playbook tablet (in place of the iPad), BlackBerry Storm (its first keyboard-less phone), BlackBerry 10, etc. However, they didn’t review well with the public. While delivering on their great email service, they suffered from a slow, glitchy software, and lack of additional features like front camera. RIM’s downfall had begun. Its global market share dropped from 20 percent in 2009 to less than 5 percent in 2012. In 2013, RIM officially changed its name to BlackBerry to maintain ‘one brand and one promise’. However, by this time, people were already for either Apple or Android, and by 2016, its smartphone market share was officially zero percent. In September 2016, BlackBerry announced that it would cease designing its phones and TCL bought out the phone brand. BlackBerry now focusses on software, and what it was always known for, security features.

So, that’s what transpired from 1984 to 2016,
That it had to quit the smartphone business and no longer be seen.
Though the iconic ‘BlackBerry keyboard’ is lauded till date,
BlackBerry’s complacency and slow reaction sealed its fate.
Lesson learned is that even if you were once the pioneer,
If you’re not willing to change, your end might be near.

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Going Out of Business – Toys “R” Us

1 Comment

  1. Mamta Goyal

    Well written Ananya

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