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A Berry Gone Sour: The Demise of RIM and BlackBerry

September 25, 2014

 

Hey, remember BlackBerry?

 

In this day and age, it's basically the smartphone equivalent of asking about digital watches or portable CD players. So it may be hard to remember that less than a decade ago, BlackBerry phones were at the technological forefront, a staple of the busy, the important, and the with-it. People joked about their BlackBerry addictions to the point where "CrackBerry" was Webster Dictionary's 2006 Word of the Year. In 2009, Fortune magazine named RIM, the makers of BlackBerry, as the fastest growing company in the world.

 

Today, you may still know a BlackBerry user, but it's probably that eccentric friend who won't throw away their video cassettes in case the VCR makes a comeback.

 

Have you ever wondered what happened?

 

Probably not. But hey, now that I brought it up, aren't you curious?

 

RIM's 1999 BlackBerry was revolutionary. In a time when cellphones weren't good for much beyond making calls, here was a palm-sized PDA that could send and receive e-mails from anywhere. The network was secure, the battery lasted forever, and the little QWERTY keyboard meant you could tap out a message with nearly the efficiency of typing on a computer.

 

For a while, everything was going right for RIM. What happened? In a word, people.

 

CEOs Mark Lazaridis and Jim Balsillie built a tech giant, but sadly they suffered from what is sometimes called "Founder's syndrome." Having scaled their way to the peak of the mountain, they failed to remember that landscapes change—especially in the fast-changing world of handheld electronics, where people on average replace their phones every two years.

 

On one hand, with hindsight on our side, it's easy to condemn business leaders for failing to divine the future. On the other hand, RIM's success caused Lazaridis and Balsillie to double down and stick their heads so far in the sand that their comments now make for surreal reading.

 

When PDAs in Asia began to offer color screens, Lazaridis insisted it was an impractical fad. "Do I need to read my e-mail in color?" he's reported to have said.

 

"Cameraphones will be rejected by corporate users," he stated in 2003.

 

In 2007, when Apple introduced a little gadget they were working on called an iPhone, Balsillie dismissed it as, "kind of one more entrant into an already very busy space with lots of choice for consumers … But in terms of a sort of a sea-change for BlackBerry, I would think that's overstating it."

 

Maybe in another company, someone might have stepped forward and delivered a wakeup call. But Lazaridis was notorious for only hiring people who thought like him. Lazaridis and Balsillie continued to insist their practical, workmanlike product had an impossible-to-beat foothold among businesspeople. How could a phone that wasted battery life on shiny new features elbow in on their territory? Who would tolerate the less user-friendly touchscreen keyboard of an iPhone?

 

"The most exciting mobile trend is full Qwerty keyboards," Lazaridis said in 2008, of a feature they'd been offering for literally nine years. "I'm sorry, it really is. I'm not making this up."

 

The public disagreed. The public disagreed pretty hard, as it turned out. That oh-so exciting keyboard feature became a shackle, cutting possible screen space in half and severely limiting what else the BlackBerry could offer. As more and more average consumers were enticed into the world of smartphones by the bells and whistles of the new generation, it altered the very definition of what a phone was supposed to be.

 

By the time even Lazaridis and Balsillie could no longer deny that change was needed, it was too late: they'd lost their edge, their voice of authority. When they finally started to offer their own touchscreens, it came with a feeling of sweaty desperation—and amazingly, their attempt at an iPad competitor didn't even offer e-email.

 

At its peak, BlackBerry stock was worth $230 a share. These days, it hovers around $10. You would probably be better off using that money to buy actual blackberries, which are delicious, full of antioxidants, and much less vulnerable to corporate hubris.

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