Globe & Mail:Inside the fall of BlackBerry- How the smartphone inventor failed to adapt

“Inside RIM, the brash Mr. Balsillie had championed a bold strategy to re-establish the company’s place at the forefront of mobile communications. The plan was to push wireless carriers to adopt RIM’s popular BlackBerry Messenger (BBM) instant messaging service as a replacement for their short text messaging system (SMS) applications – no matter what kind of phone their customers used.”

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“My reason for leaving the RIM board in March, 2012, was due to the company’s decision to cancel the BBM cross-platform strategy,” Mr. Balsillie said in a brief statement to The Globe and Mail, his first public comments on his departure. He declined a request for an interview.

Mr. Lazaridis, who declined to speak about board matters, resigned as a director this past March after delaying his retirement by a year at the board’s request.

Now, BlackBerry’s future is in doubt. This week, Fairfax Financial Holdings Ltd., a Toronto-based investment company, announced a plan to lead a $4.7-billion takeover of the company. The offer is conditional, and requires a group of so-far uncommitted institutional investors to back Fairfax and provide financing.

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The company’s near-collapse is a painful situation for Mr. Lazaridis, a gifted engineer who co-founded RIM in a tiny Waterloo office above a bagel shop in 1984.

“It’s really hurting me,” he said in an interview. “I can’t imagine what the employees must be thinking. Everyone is talking about the most likely scenario being that it will be broken up and sold off for parts. What will happen to the Waterloo region, or Canada? What company will take its place?”

The QNX team’s first assignment was to work on an operating system for the PlayBook, RIM’s answer to Apple’s successful iPad tablet. Mr. Lazaridis saw the work as a precursor to the BlackBerry 10 line of smartphones and was impressed by what the team brought to the product. “It helped our developers experience the power and elegance of QNX,” he said.

But the QNX team was overwhelmed and needed to draw heavily on the company’s other resources to complete the PlayBook. Similar issues arose later on the BlackBerry 10. The tablet, originally slated to come out in the fall of 2010, didn’t appear until April, 2011, and it failed to sell. It was an awkward accessory to RIM’s smartphones, and lacked e-mail, contacts and apps. Once again, RIM had missed the mark: Tablets that sold well worked as standalone devices, which the PlayBook wasn’t.

Some questioned the wisdom of launching the PlayBook in the first place, feeling it was a needless and costly distraction. And the decision to isolate QNX also created tensions and morale problems: Those who weren’t on the team worried about their future.

‘To me, the most logical thing would have been to integrate the operating system organizations into one,’ said one senior executive who was caught up in the fray. ‘Then you’d have a whole team, not 150 people sitting around saying, ‘I don’t know what I’m going to do next,’ and another 150 people saying ‘I’m over my head.’ ”

“Meanwhile, RIM’s lack of an advanced smartphone meant that it continued to bleed market share to Apple and Android, especially in the United States. In December, 2010, Verizon Wireless announced it would invest in fourth generation (4G) LTE technology to accommodate the growing demands of customers who wanted to surf the Internet on their phones. It signalled to device makers that it would look to feature 4G smartphones in its marketing.”

“As it turns out, both Mr. Balsillie and Mr. Lazaridis were proven right. It was hard enough to compete in a commoditizing smartphone market. Leading with the wrong product on top of that only made BlackBerry’s task more hopeless. Mr. Heins’s strategic errors only compounded the challenging situation he had inherited.”

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“The product was difficult to sell for other reasons. One company insider said it could take close to an hour for young sales staff to demonstrate the product in dealer stores.

And many long-time BlackBerry users found that the new system was too different from the classic BlackBerry experience for their liking. Many of the little “moments of delight,” as they are called in the company, were forgotten or overlooked by the QNX developers who lacked ties to the company’s past. For example, users can’t hit “u” and look at the last unread message in their inbox, nor can they easily shift to the next or previous e-mail, as they could on older BlackBerrys. Pocket-dialling is a constant hazard.

Meanwhile, the company was slow to provide service to business users – such as helping them to transfer applications they had written for the old BlackBerry system. Software developers were left with dead-end investments after learning they would have to rewrite their apps for the new system if they wanted to remain part of the BlackBerry world. Many simply didn’t bother.”

“’The decisions we made over the last two years were made within the context of a volatile, competitive and ever-changing marketplace – and always with the goal of delivering the vital technology that our customers need,’ Mr. Heins said in a written response to questions about the success of the BlackBerry 10 launch. While he called the launch ‘a significant accomplishment and one that involved the reinvention of our company,’ he acknowledged it “did not meet our expectations.”

Check out the full article here:

http://m.theglobeandmail.com/report-on-business/the-inside-story-of-why-blackberry-is-failing/article14563602/?service=mobile#!/