Once seen as one of the main “inventors” of the smartphone
industry boom, BlackBerry Ltd. (RIM) now sits as a small, lesser-known player
in a world surrounded with mobile technology. Multiple changes in leadership
and on the board were tricky for the company who openly opposed many of the
“new” technologies that were springing up in the mobile business, not thinking
that they would be successful or last long.
In 2007, after the release of the first iPhone and Apple’s
newly configured relationship with AT&T, Verizon had approached
RIM/BlackBerry to make an “iPhone killer.” The end result was the BlackBerry
Storm, which had been thrown together almost haphazardly, was months late, and was not successful. Customers complained about the awkward touchscreen
and how slow and buggy it was. Despite the failure of the device and Verizon’s
eventual move to team with Google’s Android operating system (including a
massive marketing campaign aimed to still support BlackBerry products),
BlackBerry was still seen as expanding and successful. But the success of the
Android devices, instead of killing the iPhone, ended up taking market share
away from other companies like Palm, Microsoft, and eventually RIM.
Now that the smartphone industry had really taken off, RIM
struggled to keep up. They invested in hardware upgrades, despite knowing that
there was growing interest in software applications. And they immediately
failed to follow Principle #1 as written by Clayton M. Christensen in The Innovator’s Dilemma (1) regarding a
company’s dependency on customers by saying:
“The problem wasn’t that we stopped
listening to customers,” said one former RIM insider. “We believed we knew
better what customers needed long term than they did. Consumers would say, ‘I
want a faster browser.’ We might say, ‘You might think you want a faster
browser, but you don’t want to pay overage on your bill.’ ‘Well, I want a super
big very responsive touchscreen.’ ‘Well, you might think you want that, but you
don’t want your phone to die at 2 p.m.’ “We would say, ‘We know better, and
they’ll eventually figure it out.’ “ (2)
RIM also had the added bonus of attempting to satisfy two
largely different customer bases at the same time—which resulted in neither
being satisfied. When they introduced the idea of adding such features as a
camera and game and music applications, they had received huge backlash from
corporate customers who did not want them. Despite adding these features
anyway, customers complained about the clumsiness and appearance of the apps—and
Apple and Android continued to dominate the market.
After hiring an outside company to build a new OS from the
ground-up, RIM began its push for the BlackBerry 10, and they were already
behind. The original design called for a full touchscreen, but that was met
with some distaste from leaders in the company who continued to see the
[somewhat] success of the BlackBerry 7, which included a keyboard. The two CEOs
(an uncommon business practice) clashed: one believed the market was pushing
towards all-touchscreens; the other believed that hoping customers would
embrace yet another touchscreen was too risky. This resulted in not just one,
but two phones to be released—the Q10, with a keyboard, and the Z10, an all-touchscreen
version to be release first. In January 2012 the phones were released, but
market observers agreed that the products were two years too late (and six
years after the launch of the iPhone).
RIM realized their missteps a bit too late, much like the
other companies (especially HP and the Kittyhawk venture) mentioned by
Christensen in The Innovator’s Dilemma.
The Z10’s release was met with generally positive reviews. But they had
mass-produced the all touchscreen version of the 10 and, in a world of
touchscreens, they found themselves with a large volume of unsold phones just a
few months after the initial release. Having put the device out so late in the
game, the market had already shifted yet again to faster, cheaper devices. RIM
had failed to cater to its customer base that did want keyboards by putting out a
device that was substandard in every other way.
Smartphone and mobile technology could be seen as a
short-term disruptive technology that turned into a sustainable technology. But
companies like RIM whom were previously successful with devices that were now
outdated, struggled to keep up with the demand of mobile technology despite
once being a frontrunner in the industry. Instead of adapting to the changes
with their business plan that already worked, RIM pushed the boundaries in a
clumsy manner that ultimately left both their customers and them dissatisfied.
--
(1) Christensen, Clayton, M. Introduction to, and Chapter 7 of The Innovator's Dilemma. 1997.
(2) Silcoff, Sean, Jacquie McNish, and Steve Ladurantaye. Inside the fall of BlackBerry: How the smartphone inventor failed to adapt. The Globe and Mail. 27 Sept 2013. http://www.theglobeandmail.com/report-on-business/the-inside-story-of-why-blackberry-is-failing/article14563602/?page=all