The Rise and Fall of BlackBerry

Hi, welcome to another ColdFusion video. The story of BlackBerry epitomizes the tech industry. Meteoric rises and catastrophic falls. Disruptive technology changes the market landscape so quickly and drastically that it both creates and swallows billion-dollar companies. BlackBerry went from almost 20 percent of global mobile market share to almost zero in a matter of a few short years. Let's take a look at the rise and fall of BlackBerry. To start the BlackBerry history, we have to go back to the 1980s in Canada. BlackBerry originated in Canada as a company called Research in Motion, or RIM for short. In 1984, two engineering students, Mark Lazaridis and Douglas Fregin, start Research in Motion. Early on, the company worked on wireless communications network technology. In 1996, Research in Motion introduces the first two-way messaging pager, and by 1997, the company was publicly traded on the Toronto Stock Exchange. One of the first products to carry the BlackBerry name was another pager with a full QWERTY keyboard, which later became synonymous with the brand. In fact, the name BlackBerry comes from the shape and feel of the keys on that keyboard. This pager's main strength was the device's integration with emails. This gave business users and executive sales reps the first easy-to-use, on-the-go access to email. And this was a huge deal. And in here, BlackBerry would find its market. The next model would integrate telephone capabilities, something that hadn't ever really been done well before. At the time, in the 1990s, there was a race to dominate the newly developed handheld space. Palm, Ericsson and IBM were all in on the game. Even Apple tried with the Apple Newton and its stylus. The latter ended up being a disaster because the software wasn't up to scratch. BlackBerry looked at this market from a very different point of view. They were going to innovate. What none of the big players in the 1990s realized was that bandwidth was very limited for data transmissions. Mike, the founder of Research in Motion, did understand this limitation. Within the BlackBerry devices, he had created an instrument that distributed the bits of data communications in such a way that it wouldn't overload the networks. So while others were charging massive amounts of money for something that barely worked over a network, BlackBerry devices just worked. This combined with a keyboard that could be effectively used with thumbs made BlackBerry have the clear advantage. Another part of BlackBerry's success was their guerrilla marketing. BlackBerry employees would often go to conferences and spotted business people who were using chunky laptops. The BlackBerry employees would give these people a BlackBerry to try for free for a month. As the business users replaced their laptops with BlackBerrys, this created massive word-of-mouth marketing, and soon, the devices became a necessity and took over the business world. The device was just so much more practical than other phones at the time. The hype of the BlackBerry soon carried through down to non-business users, and BlackBerry decided to target them too, integrating more features for the everyday user. The BlackBerry Pearl was their step into this new space. It featured multimedia elements such as a camera and came with a new service called BlackBerry Messenger. In the mid-2000s, service providers typically charged per text message, the most common form of messaging back then, but BlackBerry Messenger used internet data to transfer cheap and quick messages, much like iMessage and iPhones today. Back then, it was nothing short of revolutionary. It allowed people to escape their text message limited plans. This innovation made BlackBerry very popular, and soon enough, BlackBerry was everywhere. At its peak, the company had 20% share of global smartphone market and 50% of the United States market. It was a goliath in the tech world. Its users ranged young and old, professional and casual. The company's position in the market was so strong. So, how did it go all so wrong? It was the year 2007. George W. Bush was president, the first Transformers movie was released, and Windows Vista was still fresh. Steve Jobs went on the stage at Macworld to talk about a new product Apple was working on. It was a phone, a mini computer, a web browser, and an email machine, all in the one device. Meanwhile, in Canada, founder of BlackBerry, Mike Lazaridis, looked at the announcement that Steve Jobs had just made, and said, quote, This is an impossibility. The networks wouldn't be able to carry this. It's illogical that anyone would even propose this. End quote. The thing was, Mike was right. The iPhone dropped calls and Apple faced lawsuits for a product that simply just didn't work But then, after the initial setbacks, the iPhone began to work, and Mike became very wrong. Within that two year period, the iPhone had taken the world by storm. Its interactive, but multi-touch capacitive touchscreen captured the imagination of users and developers. By the time BlackBerry realised what a serious threat that this was, they were already followers. To add to the problem, Android phones like HTC also started to hit the market, pushing the barriers and increasing competition. This was new for BlackBerry, as previously they didn't have many strong competitors. There was Sony Ericsson, Nokia and Motorola too, but BlackBerry was set above as a premium mobile phone brand. Almost overnight, that all changed. The iPhone did many things better than BlackBerry. A bigger screen, better interaction by capacitive touch, better multimedia playback and a better camera were just some, but it was the browser that really differentiated the two. BlackBerry had a much smaller screen to render images, limiting the way that the layout could be displayed. With nearly double the screen size, the iPhone shot its competitor out of the water, allowing more ways to interact with the page. Not only this, but most interactions with the device just simply felt more natural too. But BlackBerry wouldn't go down without a fight. Contrary to popular belief, at this time, BlackBerry was still doing well. They were expanding in Indonesia, India, and other parts of the world. They were a huge company and even had to build new factories to keep up with demand. Once the iPhone got its original network problem solved, BlackBerry reacted. The next phone would have a much larger screen, while still paying homage to the QWERTY keyboard that made them famous, this time utilizing a slide-down tab. The issue at the core of BlackBerry was that it was trying to compete in a dynamic market by changing its physical features. All the while, its operating system remained relatively unchanged. BlackBerry soon realized this and reacted by changing their Java-based OS with a new OS built in a language called QNX. But unfortunately, developers simply didn't like QNX. They opted to make apps for Android and Apple instead, because they could have exposure to much more of the market. Ultimately, it was a destructive feedback loop for BlackBerry. Less third-party apps meant fewer people wanting to buy BlackBerry devices, meaning developers had fewer people to sell their apps to, which in turn meant that developers would produce fewer apps for BlackBerry. And the destructive loop continues. In the space of a year, BlackBerry had dropped from the most popular mobile brand to third. In another attempt to save BlackBerry, they changed their operating system yet again. But now, they jump ship to their competitors by using Android OS. But unfortunately, this move demonstrated that BlackBerry was no longer different from any other Android phone, and held no edge in this newly developing market. So naturally, they pivoted to becoming a software company. These days, the company mainly focuses on security and enterprise software. They still do sell phones, but they only account for 0.05% of the global market. Effectively, nothing. Android and the iPhone undoubtedly killed BlackBerry, but it was BlackBerry themselves who allowed them to do this. They were at the top, complacency crept in. The models of BlackBerry didn't really show any great leaps forward or exciting new technology to make you trade in your old one. They simply kept producing the same phone model over and over again. The cameras did improve a little, and they did have new improved features here and there, but not the big leaps that were seen with Apple and Android devices of the time. BlackBerry stopped competing, sat on its hands, and once competitors got ahead, they woke up and started playing catch up. To add to this, their executives didn't have vision. They pushed the company into what they thought consumers wanted, instead of actually listening to them. Jim Balsillie, former co-CEO of BlackBerry in 2010, was quoted as saying, There may be 300,000 apps for the iPhone, but the only app you need is your browser. This perhaps epitomizes the hard-headed culture and lack of vision in the company, which would ultimately lead to its destruction. The company leadership failed in several aspects. Firstly, they failed to realize that non-business consumers would eventually drive the market. Secondly, they reacted poorly to the new app economy which made the iPhone and Android devices so popular. And lastly, they didn't foresee that mobile devices would evolve from a simple communications device to full mobile entertainment devices. The executives persisted with a QWERTY keyboard in the face of touchscreen devices, just another example of failing to see where the market was heading. This wasn't the easiest thing to see by any means, but in the early stages of Android, when they saw the iPhone, they immediately realized that touch was the future and pivoted their designs to get rid of their keyboards. Blackberry could have done this. What I do give Jim and Mike credit for is the way they ran that company. There was enough gas left in the tank, if you will, to keep the company going and by that I mean Mike Lazaridis still had a library of innovations. While Jim Balsillie and his financing, the company had over five billion dollars of cash when it ran into trouble in 2013. It had no debt, it was conservatively financed, it allowed them to buy time to get through their problems. The story of BlackBerry once again highlights the speed at which the technology market can move. BlackBerry got on top by providing a great product, but somewhere along the line, they stopped innovating. When the iPhone came out, they were complacent and didn't realize the future until it was too late. Even as far as 2010, they didn't believe in the concept of apps. Ultimately, BlackBerry was a company which rose to the top, but didn't know how to stay there. They weren't hungry to consistently make a better product. Apple and Google Android's fierce competition over the years continues to push the boundaries of mobile phone technology. BlackBerry just never felt this pressure until it was too late. And in the tech world, when you start playing catch-up, you've already lost. BlackBerry still makes phones today, but they could have been the Apple of today if they reacted faster to the iPhone. It definitely wouldn't have been easy, but it was definitely possible. As a result, the company couldn't keep its share of the market. And in total, that is the rise and fall of BlackBerry. So thanks for watching this video. So did you ever own a BlackBerry? And if you did, would you have liked to still see BlackBerry dominate the smartphone market? Let me know in the comments section below. If you want to see more videos on science, technology, business, and history, you can subscribe to this channel. I'm sure you'll find something interesting here. Don't forget to check out the podcast versions of these videos as well. I'll leave that in the link below. Thanks for watching, this has been Dagogo and you've been watching ColdFusion and I'll catch you again soon for the next video. Cheers guys, have a good one. ColdFusion. It's new thinking.