BlackBerry – The Disrupter that Got Disrupted

BlackBerry smartphones were once the peak of mobile technology. In the late 1990s and early 2000s, carrying a BlackBerry device was a status symbol in the business world. But despite its early dominance, BlackBerry eventually failed and vanished from smartphone marketspace. The story of BlackBerry is a cautionary tale of how slow adaptation to changing market trends, lack of consumer focus, complacency, poor leadership decisions, and a failure to innovate ultimately killed a multi-billion dollar company which was once a pioneer of the industry.

The Origin of BlackBerry

A decade and a half ago, there was no bigger status symbol than the BlackBerry. It was a tech gamechanger. BlackBerry Limited, known as Research in Motion (RIM) until January 2013, was founded in 1984 by two Canadian engineering students, Mike Lazaridis, and Douglas Fraggin. They started working on wireless motion technology. In 1989, the Canadian phone company Rogers contracted RIM to work on its mobile text network, a system specifically designed for messaging.

The Rise of BlackBerry

Gathering expertise in mobile messaging from Rogers project, RIM introduced its first two-way messaging pager in 1996. It was one of the first pagers with BlackBerry’s trademark QWERTY keyboard. The name "BlackBerry," was inspired from the small, round keys on the keyboard that resembled the fruit. The pager’s main feature was its ability to integrate with email. It ran on its own operating system, with secure, encrypted messaging. It quickly became popular with business people, on Wall Street, in law firms, etc. The first prominent release from BlackBerry, the Inter@ctive Pager 950, was in 1998. It had a small-sized screen, keyboard buttons, and the iconic trackball that allowed seamless syncing and continuous access to corporate emails. It became an instant hit, and then there was no looking back. RIM's revenue skyrocketed and increased by 80% to $85 million after the release of 850 pager in 1999 which supported “push email” from the Microsoft exchange server. It would not be wrong to say that BlackBerry led the foundation of today’s messaging system.

In the 1990s, bandwidth was limited and BlackBerry understood this constraint and devised an instrument that shared bits of electronic data communication in such a manner as not to overload the networks. In 2000, BlackBerry launched the first smartphone, called the BlackBerry 957. While other companies sold devices that could barely function over a network at exorbitant prices, BLACKBERRY devices were affordable and they operated well. The devices from BlackBerry were launched with QWERTY keyboards used for typing lengthy notes. BlackBerry devices soon became a necessity among business people.

Gradually, in an attempt to target an everyday, non-business user, BlackBerry added more features to its devices. The ‘BlackBerry Pearl’ was launched to target non-business users. The device featured various multimedia elements such as a camera, and also came with a new feature called ‘BlackBerry Messenger (BBM)’. It was a huge hit with the public and garnered a lot of positive feedback. Between 2001 to 2007, BlackBerry saw worldwide expansion and the addition of new products to its range.

The Hype and the status symbol

The hype of the BlackBerry carried to celebrities and politicians like Lady Gaga, Madonna, Kim Kardashian, ex-US President Barack Obama who became its fans. The BlackBerry was instrumental in changing the way that humans worked. Owning a BlackBerry meant that you didn’t have to be stuck at a desk. It meant that one could carry their office around with them at all times. If you had a BlackBerry, you were signalling to the world that you were busier than most people. It meant you were needed. BlackBerry laid the foundation for the development of smartphones.

The Number Game

BlackBerry devices were revolutionary, and found everywhere. At the end of 2007 the company had a market capitalization of more than $60 billion. In 2008, its global user base grew to over 20 million people. At its peak in Q1 2009, BlackBerry had 20% of the global mobile smartphone market. In the U.S, the BlackBerry hit its peak in September 2010, with almost 22 million users, or 37% of the market share. By 2011, it had sold more than 50 million units worldwide.

However, technology changes quickly and this change altered BlackBerry’s market landscape drastically. BlackBerry went from 20% of the global mobile market share to almost 0, making it discontinue its master product.

The Rise of the iPhone and Android

Apple iPhone was a new player in the smartphone field set to disrupt the mobile phone market in the way BlackBerry had. Steve Jobs revealed the device to the world in early 2007, calling it a “revolutionary product”. The introduction of the iPhone in 2007 marked a turning point in the smartphone industry. With its sleek design, touch screen interface, and extensive app store, the iPhone changed the way people interacted with their mobile devices. Apple made smartphones intuitive and enjoyable to use. Downloading music, social networking, streaming video – Apple created limitless possibilities in a sleek, user-friendly package.

BlackBerry, failed to understand changing consumer demand and recognize iPhone as a direct competitor. Lazaridis in fact dismissed iPhone as a ‘toy’. Due to their early success, BlackBerry remained complacent and this was the beginning of their downfall. When the iPhone started selling well, BlackBerry hastily released a touchscreen device (BlackBerry Storm), which often didn’t work properly. Subsequent devices reintroduced the keyboard in a combo touchscreen-keyboard setup (e.g., BlackBerry Bold), which helped the company briefly but eventually could not do much as the market continued moving toward the experience offered by iphone and other Android based phones. After many attempts to change its strategy, BlackBerry eventually was forced to exit the hardware market. BlackBerry's market share declined sharply by the mid-2010s. On January 22, 2012, Mike Lazaridis and Jim Balsillie resigned as the CEOs of the company. On March 29, 2012, the company reported its first net loss in years. In 2013, the company's board of directors replaced its CEO and began a restructuring plan to try to save the company. Despite its efforts, the company was unable to turn things around, and in 2016, BlackBerry announced that it would no longer manufacture smartphones and would instead focus on software development. 

Lessons to be learnt from the fall of BlackBerry

The rise and fall of BlackBerry offer valuable lessons for companies in general and especially companies operating in the fast-paced and ever-evolving technology industry.

1. Adaptability is crucial - Companies must be willing to adapt and respond to shifting market dynamics. BlackBerry's failure to recognise the significance of touch screen technology and adapt its devices accordingly proved to be a fatal mistake.

2. Complacency Kills – An organisation should never believe that their position is undisputable, no matter how successful they are. BlackBerry became set in their ways, unwilling to upset a winning formula. When the marketplace began changing rapidly, BlackBerry failed to change with it. BlackBerry assumed that its loyal customer base would continue to purchase its devices.

3. Consumer focus is essential for long-term success - Companies need to focus on the User Experience. Companies must prioritize intuitive design and adapt their products to meet evolving consumer preferences. The biggest mistake of BlackBerry was that it did not foresee and incorporate the change in customer behaviour towards touch screen with more inclination towards apps and app-related services.

4. Innovation is key to staying competitive - BlackBerry's reluctance to innovate and introduce new features and functionalities limited its ability to attract and retain customers. In today's fast-paced technology, companies must continuously innovate and evolve to meet the ever-changing demands of consumers. They remained fixated on keyboards, battery life, and enterprise software – important factors once upon a time. But the market preference changed to touchscreens, apps, and processing power.

5. Pay close attention to market innovation (especially competitors) – Companies must keep a track of new innovations in the industry. Competitor’s information should also be tracked very closely.  Never take your position for granted. Close attention must be paid to disruptive innovations.

6. Flexible & Forward-looking Management – Adaptable strategic thinking was one of the mistakes made by top management at BlackBerry. They never expected that consumers will make a shift towards screen touch mobile phones or even change preferences so rapidly.  Management should be ready to re-strategize to align with the market’s needs. Leaders must stay flexible, hungry, and forward-thinking. They should also have a culture that encourages and rewards innovation within their organization. This involves creating an environment where employees feel empowered to share ideas, experiment, and take calculated risks. Companies must be willing to reassess their business models and make bold decisions to adapt to changing market conditions.