Why did Blackberry fail despite a Rockstar Market Entry?
The story behind the collapse of the Blackberry era!
We wear cool suits; we wear shiny shoes,
We are the Blackberry boys, oh yeah, we’re the blackberry boys…
Who doesn’t remember this iconic Blackberry ad and the craze behind Blackberry’s sliding qwerty phones? So what happened to the brand that became extinct in a decade?
Why did Blackberry fail despite a Rockstar entry into the market?
Great question; let’s figure it out.
History
In 1999, Blackberry launched the world’s first smartphone. It was an exceptional innovation, and hence it quickly captured the market.
The phone rose to fame because it lets users access the internet and email anywhere, which was great for the always-on business world. Its QWERTY keyboard made typing far faster than before, and people were hopelessly addicted to their so-called “CrackBerries.”
In the years followed, Blackberry became the market hero to the extent that even by 2006, Apple was nowhere in the market, and Google’s initial phone launches were majorly the “Blackberry clones.”
By 2009, BlackBerry was a dominant player in the mobile phone space, with a 20% market share, more than iOS (14%) and Android (4%) combined.
It was so popular that President Obama chose the BlackBerry and came out in a media article as “You Can’t Run the World’s Most Powerful Nation Without Your BlackBerry, President Obama Discovers.”
But within a decade, by the end of 2016, the Blackberry business and superhero powers collapsed exponentially.
Where did Blackberry go wrong? Let’s dive deep.
1. Underestimating the competitors & Overestimating the market
By mid-2008, Blackberry’s stock price peaked at an all-time high, as shown in the graph below.
Blackberry was so busy celebrating its success that when a year earlier, Steve Jobs launched the first iPhone in 2007, Blackberry ignored it.
Blackberry has even perceived iPhones only as an enhanced mobile phone with animated features targeted at younger consumers, as mentioned by the Investopedia reports.
Blackberry was so overconfident with its market share and the overwhelmingly comprised target audience of business users that they forgot to ask the fundamental question,
Who is the end-user? Because they didn’t know, they could not care.
What Blackberry failed to realize was a possibility when people started loving the bright color phones and giant touchscreens. The iPhone was a huge hit, which was the start of BlackBerry’s demise.
2. Who is the end-user?
Blackberry’s business model ran on selling it to enterprises and IT managers, majorly for corporates. Hence, Blackberry missed the underlined idea of building something for the end-user, which in this case, were the regular customers.
BlackBerry didn’t realize that corporates might just want to send emails but consumers wanted to do more than just send emails on their phones: they wanted apps, games, and instant messaging.
On the other hand, Apple saw an opportunity here and cracked it excellently with iPhones, and Apple sold directly to the end-users.
The results?
With greater access to iPhones, people started carrying two phones: BlackBerries for work and iPhones for personal use. Soon, businesses realized they could save money and keep employees happier by letting employees use their phones for work purposes.
Slowly but surely, iPhones started creeping into BlackBerry’s treasured enterprise market — a perfect example of the trend known as “Consumerization of the Enterprise.”
It took Blackberry their business to realize that every business person is, after all, a regular user in the end.
3. Failed comebacks - chicken and egg issue
By the time BlackBerry realized it had to reach consumers directly, it had already fallen behind. To compete against the iPhone, BlackBerry designed a touchscreen phone called the Storm in 2008. It was released before it was ready, and consumers gave it negative reviews making it worse for the company. Even the CEO admitted it was a flop.
By 2012, BlackBerry’s market share had tumbled from 20% in 2007 to just 5%.
That year, BlackBerry appointed a new CEO to try to turn things around. They even launched a new series of high-end phones, the Q10 and Z10, in what a New York Times critic called “BlackBerry’s Hail Mary pass.”
Did it work?
Not really. As BlackBerry sank into third place behind iPhone and Android, it got stuck in a vicious cycle called the “chicken-and-egg problem.”
Developers wouldn’t build apps for the BlackBerry platform without users, and users wouldn’t buy BlackBerries. Imagine if no one would walk into a party unless there were already enough people there — it makes you wonder how you’d ever get anyone to come in.
BlackBerry tried hard to entice developers to their platform, even offering $10,000 to anyone who made a BlackBerry app in 2012. But it still didn’t work. And the rest is history.
Conclusion
Earlier this year, Blackberry shut down the mobile phones division in a press release saying, “Blackberry phones will no longer reliably function from 4 January, including for calls and texts.” And that was an end of an era.
BLACKBERRY THOUGHT IT HAD MORE TIME AND ROOM FOR ERROR THAN IT DID, and hence it failed despite a Rockstar market entry!