Tuesday, September 24, 2013

Blackberry: Becoming Irrelevant Just as the World is Getting Digital?

BlackBerry recently signed a letter of intent from a group led by Fairfax Financial Holdings  to pay shareholders $9 a share in cash (with the usual caveats) --essentially taking the company private.  This is happening at a time when mobile devices are more prevalent and likely to be more important and influential in our lives.  The initial indications are that the future is not anchored around consumer devices and services but the company seems to be wanting to focus on enterprises using its secure networks as the basis for differentiation. 
Reversal of Fortunes 

The final price of less than $5 billion should be seen in relation to the market value it enjoyed in 2008--$80 plus billion.  Is this case similar to Kodak--which invented the digital camera but did not see the rapid shift? Is it similar to Nokia--which was the undisputed leader in the feature phones. Did it just miss the smart phone shift? is it as simple as that? or something deeper and more fundamental about the digital transformation underway? 

Did Nokia management engineer their transformation with Microsoft better than Blackberry's management?  More importantly, why did companies such as Samsung or HTC or others not want Blackberry?   Could Facebook have leveraged the technology? or eBay? or Amazon? 

 Worth thinking about. 

 Venkat
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2 comments:

  1. UnknownSeptember 25, 2013 at 12:15 AM

    Thinking about how and why Blackberry failed is an interesting and complicated issue. I remember owning a blackberry and loving everything about it. So when and how did it miss the mark? Its initial product was innovative and this article speaks about how it was the first to 'free the employee from the PC."

    http://techland.time.com/2011/07/08/the-tragic-decline-of-blackberry/

    From that point, however, I believe Blackberry's crash was more similar to Kodak. Blackberry invented the space, but failed to innovate afterwards and lost its foothold. Since Blackberry 'invented' the space they had a less drastic decline than a Nokia, who saw a dramatic drop in smartphone sales.

    I also think its more than just a simple miss of the smartphone shift. They failed to see the evolution of the mobile shift that they basically started. Maybe it was the pride of their recent innovation that blinded them too look even further into the future?

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  2. UnknownSeptember 28, 2013 at 4:00 PM

    Blackberry seems to be a loved brand by users who want a keyboard. The problem is that blackberry put way to much value on this user base. The keyboard phones will not go away entirely (as discussed in today's New York Times), but it's place in the marketplace is now as a niche market. The benefits of touch are too compelling and every year more and more keyboard users make the switch.

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