The rise and fall of Blackberry
Published: Tuesday, September 24, 2013
Updated: Tuesday, September 24, 2013 23:09
Last week, Blackberry, formerly known as Research in Motion, announced that they would be cutting 4,500 jobs in response to over $1 billion in losses. Share prices unsurprisingly dropped 20 percent as a result. Since then, Blackberry has signed a tentative agreement with Canadian holding company Fairfax Financial, that would buy out the company and effectively make Blackberry private again. Fairfax currently has a 10 percent stake in the company, and should this deal go through, they would be buying the company out for $4.7 billion, at roughly $9 a share. While that may appear to be a lot of money, it’s almost laughable when you put it in perspective.
Less than five years ago the company was trading at $140 and was worth over $80 billion. As recently as 2009, it was named by Fortune magazine as the fastest growing company in the world. Since then, the company’s value has dropped nearly 90 percent. Adding insult to injury, this past weekend, Apple, one of the reasons that Blackberry has fallen from grace, made over $5 billion with a record-breaking nine million sales of its newly released iPhone 5S and iPhone 5C. Considering Apple made more in a single weekend than Blackberry’s current net worth, the company is definitely a former shell of itself. But how did it get there?
As mentioned before, there was a time when Blackberry dominated the mobile device market, especially in the business world. Founded as Research in Motion back in 1984, the company launched its first Blackberry device in 1999, around the time when email was the Internet’s claim to fame. Blackberry made receiving emails a breeze and the keyboard was a godsend in the business world for typing out emails and other messages. For the most part, Blackberry rested on its laurels and really didn’t bother to innovate because there wasn’t a need to. Even after Apple launched the inaugural iPhone in 2007, Blackberry didn’t sweat too much because Apple was going after everyday consumers, not the business customers that were at the center of Blackberry’s customer base. No real action was taken in response to this competition, and it is ultimately what led to Blackberry’s fall.
As the iPhone and Android phones began increasing in popularity, it became very clear that people were moving towards full touch screens. However, Blackberry still kept its full keyboard despite the changing tides. Eventually the company came around and introduced a line of touch screen phones, but at this point it was already too late. Blackberry had also started losing its dominance in the business world as Apple and Samsung expanded their offerings to appeal to both enterprise customers and the average teenager.
This failure to envision a future outside of the business world is really what that did Blackberry in. One of the big advantages that Apple and Google had was in their respective iOS and Android operating systems. This software push not only focused on improving the user experience, but it also focused on making the devices more than just communication tools by putting an emphasis on personal content like music, movies, and the ability to surf the web. Blackberry’s software wasn’t nearly as popular, and despite the most recent update, Blackberry 10, earlier this year, there is still a lack of content compared to its competitors. This likely stems from the fact that Blackberry got into the app market a little too late and couldn’t convince enough developers to develop for their platform, likely due to their dwindling market share.
In the relatively short time I’ve had a cell phone, I personally have never owned a Blackberry device or even thought about purchasing one. While that may indicate bias, it also proves a point. I am one of the millions of consumers that has not been persuaded by Blackberry’s offerings and has turned to the greener pastures offered by the likes of Google, Samsung, and Apple. This has only become more evident with the recent downturn Blackberry has taken. Is Blackberry completely dead? Not quite yet, but with the way things are going, there really isn’t too much life left.