Gone are the days when owning a BlackBerry was a sign of status. The company that once was the phone market’s leader had seen a worldwide success that spiked through the roof with its new technology, but also one of the most notable down spirals in the tech industry.
BlackBerry stopped producing smartphones in 2016, and nowadays, ex-customers are left only with a prominent feeling of nostalgia when thinking about the once-so-desired QWERTY phones. In fact, the company once controlled up to 50% of the global smartphone market. But at the moment of leaving the smartphone industry, the company’s market share was insignificant.
But let’s replay it for a second. The tech company started with general connectivity devices like its first pager that featured convenient push email and fax options. And when teh new technology of the BlackBerry introduced its first cell phone, the device was desired by almost any finance or tech-savvy individual in America. But even though the BlackBerry phones had a primary focus on people who were to use the new technology for work, regular consumers started enjoying them as well.
BlackBerry reached its peak in the tech industry in 2010, but 6 years later, the company had already seized production of any of its smartphone devices. So, what factors contributed to this sudden drop?
It all started with the disruption of the mobile industry influenced by Apple in 2007.
When Steve Jobs announced the first iPhone in 2007, it completely changed the smartphone industry with the introduction of its new technology. This phone was for the first time featuring a full touch-screen display, a user-friendly OS, and also the App Store that allowed many third-party applications to reach consumers easier than ever before!
By that time, Nokia and BlackBerry were dominating the global smartphone market. BlackBerry’s stock on the tech industry was on a constant trend uphill with its peak at around $150/ share in June 2008. And to think that both companies failed to asses and counterattack the innovations that came with Apple, and later Google, feels pretty surreal. Both Nokia and Blackberry were unable to see the change in customers’ perceptions and preferences.
For BlackBerry, it was the denial that made them believe that Apple’s touchscreen devices and new technology are not anything more than fun toys for young people, while the overall consumers will prefer their physical keyboards. But guys - Blackberry couldn’t be more wrong.
If only the management at BlackBerry understood the importance of software and the overall switch in consumers’ preferences and user experience regarding wider screens and more convenience, maybe the company would still be in the smartphone market. Think about the “Awe” moment everyone had when Jobs presented the scrolling with one-finger option on his iPhone.
But when iOS and Android OS offered everyone something different, BlackBerry stuck to its core specs - security and connectivity for business people.
And yes, this model worked very well for the company in the past, but if there is one lesson we need to take from this story is this: In the tech industry nothing stays the same, and the one that fails to innovate, adapt and create a good user experience, will be left stranding.
Even though BlackBerry continued to thrive in the next 3 to 4 years following the iPhone release, that was mainly due to its already built-up momentum. After all, its main markets, the US and the UK, switched pretty quickly to the competition, but BlackBerry was still kept above the others by its customers in developing countries. Because of this, the company managed to get through a few failed attempts to catch up with the competition.
For example, the BlackBerry Storm device that was released in 2008, came as a very hurried attempt to compete in the new touchscreen smartphone market. However, the device wasn't even close to the user experience and standards set by Apple and Android phones. The phone’s operating system, BlackBerry OS, was considered by many to be boring and it was definitely not ready to be competitive in the market.
Not only did they insist on keeping their own OS but they did not allow for third-party applications on their phones as well, insisting that they will develop their own. As we have already seen, that was a huge failure and the beginning of the end for BlackBerry.
The stock of the company quickly dropped after 2008 but it was still not damned.
Blackberry had 3 more years at its disposal to come up with something that would satisfy the new innovation-hungry market before everything started to fall apart. And they tried. They introduced the BlackBerry Torch, which featured both a QWERTY keyboard and a touch screen. However, the User Experience and Interface still were not able to meet industry standards. BlackBerry’s tablet, the PlayBook, was another big miss for the company. Because it lacked essential applications like email, contacts, and calendars, it was highly criticized, and it offered no innovation to justify its price tag.
So, from 2008 to 2011 the company’s stock price had fallen more than 50%, trading at around the $60-70 range. But from January 2011 to January 2012, anyone who was holding long-term stock in BlackBerry had to accept a big loss, as the prices plunged below the $20 mark and never fully recovered from there. In fact, for a few years before the decision to fully let go of the production of smartphones, BlackBerry struggled to keep its share price above the $10 level.
But ever since BlackBerry started to refocus itself on security software for the Internet of Things era the tides had calmed. The company reported its revenues increased in the last years and it has a little more than 2% of the global market share for the cybersecurity industry. Its main competitor is AWS (Amazon Web Service) which has more than 70% of the market share. But only time will show us what’s in store for BlackBerry and we are glad to see that the company has found a solution to keep itself moving forward.
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