The Failure of BlackBerryBy Tom Dougherty
BlackBerry Failed. Marketing lessons to be learned.
The world truly changed in 1999. We saw Europe introduce the Euro. Then, the tragedy at Columbine, the world was dealing with Kosovo and SpongeBob SquarePants debuted. But the world also saw a revolution in communication for better or for worse. And it changed everything. As a result, BlackBerry failed.
Research In Motion introduced the BlackBerry
The first BlackBerry was the 850 and it was little more than a two-way pager with email and some limited HTML functionality. However, it could not be used as a phone. It did, however, give users something they had never had before: an “always-on” connection that allowed users to sync with Microsoft Outlook.
In the early days, the 850 was not even yet called a BlackBerry (long before Blackberry failed) and it was only available to enterprises. Neither of those factors detracted from its desirability. Quite the opposite, in fact. It was a status symbol. The person using it felt like they had made it. The 850 was the epitome of a brand reflection.
We say that because the brand is really the reflection customers see when they use your product or service. It is the emotional connection people have with things. RIM owned a product that elicited such an emotional response that people became addicted to the device.
RIM owned some very valuable emotional territory. It owned innovation/technology. It owned status. It owned first. It owned prized emotional ground that should be held on to as vigorously as possible.
And for nearly a decade, RIM appeared to do just that. RIM grew significantly. From 1999 to 2007, RIM/BlackBerry’s stock price went from about $1.50 to a little north of $230 at its peak, a 15,233% increase. It was the darling of Wall Street and the envy of businesses the world over.
The 850 turned into the 950 and the 950 turned into the 957, which stood for 15 years as the iconic BlackBerry design – a large screen with the unique keyboard below. They were defining devices in mobile technology. But there was still no BlackBerry that you could use as a phone. In order to make a phone call, you still needed a different mobile phone with a separate agreement.
In 2002, BlackBerry gave us the ability to use data and voice on the same device. The BlackBerry 5810 was born, complete with an earbud for making a call. BlackBerry 6810 and 6820 came not long after that, the earbud was removed and allowed the user to make normal calls. Keep in mind that BlackBerry is still really only for enterprise use at this point.
In the next few years, BlackBerry models showed up with color screens and RIM even created a new form factor. One geared towards the consumer market with a new keyboard system called SureType.
SureType combined two letters to a single key. Eventually, the Pearl, perhaps BlackBerry’s second most influential device after the 957, was loaded with a camera, color screen, and even a trackball. This was the height of BlackBerry and also marked the beginning of its death spiral.
The Mobile Category
Mobile devices were in a rapid stage of evolution. Features were being added and removed on the whims of consumer taste. And RIM found a set of features that really met the needs of the emerging consumer mobile phone market at the time. Additionally, RIM had strong brand equity in the BlackBerry name, and people, both consumers, and businesses coveted its aspirational brand.
But here lies the problem. In a changing market, stasis often means death. That’s why BlackBerry failed. Things are only aspirational as long as people see them that way. In BlackBerry’s case, there was a duty to protect that emotional high ground that it didn’t fulfill.
As BlackBerry failed, it saw itself only as a producer of mobile phones. It forgot to protect that high emotional ground with a brand that said why their mobile phones were important.
Its success was due only to being first to market with a highly innovative product. The 2006 launch of the Pearl, which allowed the brand to be enjoyed by everyone, was really the last innovation for BlackBerry in mobile devices.
The beginnings of why BlackBerry failed
From that point on, BlackBerry played defense. And it rested too heavily on what it thought was its impenetrable enterprise business. BlackBerry thought it was untouchable.
Even in 2003, as other device companies were entering a rapid stage of innovation, BlackBerry’s co-CEO Mike Lazaridis quipped, “Camera phones will be rejected by corporate users.” It was not until 2006 that a camera was added to a BlackBerry.
Companies whittled away at BlackBerry’s market share, sowing the seeds for the reasons why BlackBerry failed. Nokia and the Palm Treo brought us the first color displays (before the Pearl) and firms like Motorola and LG began to change the mobile phone into a stylish accessory.
Carl von Clausewitz wrote in On War, “If we are really waging war, we must return the enemy’s blows. The defensive form of war is not a simple shield, but a shield made up of well-directed blows.”
Business is very much like warfare. If an enemy continues to come after you, they will eventually wear you down.
At this point, BlackBerry’s responses were always just that. BlackBerry simply responded to new features by competitors by simply aping them. It was at this point when BlackBerry lost its emotional high ground of innovation because it became known as a fast follower.
Then came the iPhone
Overnight, the hero of innovation was ripped away by the iPhone. More importantly, Apple uncovered an emotional intensity that trumped them all, simplicity. Given the rather complex nature of smartphones at the time, simplicity was not only welcomed, it was embraced. So much so that people waited in lines for the iPhone.
The brand promise of simplicity for the iPhone was further solidified by its stunning innovation.
Jim Balsillie, the other co-CEO of BlackBerry, said of the iPhone in 2007, “in terms of a sort of a sea-change for BlackBerry, I would think that’s overstating it.” All emotional intensities that made BlackBerry popular over the course of the past eight years (with the possible exception of the keyboard) were voided by a single product launch that did not take eight years to blossom.
Reeling from the impact of the iPhone, BlackBerry again tried to “add that feature” in the form of the BlackBerry Storm. But instead of a volley across the bow to Apple, it was really a flag of surrender.
So what are the lessons here? What can we learn from the fact that BlackBerry failed?
First off, BlackBerry was and always will be the founding father of the modern mobile phone. Some may argue that the addition of an operating system and the full panel touch screen with the iPhone is the true ancestor. But RIM, now BlackBerry, started mobile device companies on their current course. But here lies the first lesson:
In innovative industries, staying the course is a dangerous proposition.
Consistency and stick-to-it-ness are great attributes of a brand. Often, these attributes make the difference between a brand that succeeds and a brand that fails.
When your brand is based on innovation, you are always chasing the newest innovation and are doomed to fail. BlackBerry needed a brand promise that was emotional in nature and not dependent on features.
If you have the luxury of being first to a market, you must defend that position with all of the resources at your disposal.
This is related to the first point but not a restatement of it. Being innovative does not mean you have to be revolutionary at each step. As a market leader, you have brand equity that allows target audiences to believe in your own innovation. (Read how being first in a market is not a guarantee of success.)
This is the crux, however: a company that does not possess the expertise to continually innovate must either find it or buy it. The best news is that most people have no idea if innovation is purchased or developed internally. BlackBerry had access to sufficient cash and resources to purchase forward-thinking talent and companies.
Again, however, a brand that was focused on emotion would have allowed customers to remain loyal despite other innovations. When your brand is about innovation, you have taught customers to always seek out the newest innovation.
CEOs must hold pragmatic views of the business environment and articulate that view to the public, shareholders, and employees.
Hindsight is always 20/20. But Balsillie and Lazaridis, the co-CEOs, had substantial influence in the organization and made it seem, at least publicly, they did not believe they ever had a problem. The impending signs, however, that Blackberry failed were front and center. Even ex-CEO Thorsten Heins believed that tablet computers would not last.
A company that claims to be innovative should have leadership with vision. Good employees absorb vision and want to execute it. Part of it is a cult of personality (see: Steve Jobs) but most of it is sweat. The power of any brand, BlackBerry included, gives the organization reason for being. If the leadership does not convey it at every step and in each interaction, it is really meaningless and fodder for any company in a position to take it.
Brand arrogance is one of the worst things that can happen to any brand.
All of the above-mentioned lessons result from this one: all brands, no matter how big, iconic, or influential, can fail. When a brand thinks it is above the fray, it will almost always land below it. BlackBerry thought it could simply copy features of other providers, keep its keyboard and everything would be fine. It thought its customers would still aspire to use the BlackBerry. Everyone wants a BlackBerry, right?
At this point, it is doubtful that the BlackBerry device business lasts much longer. It stood for innovation, taught audiences to seek innovation, and when BlackBerry became a follower, BlackBerry failed.
The company began to shift toward services such as the popular BlackBerry Messenger on all mobile operating systems, allowing users of its BlackBerry Enterprise Services to manage both BlackBerry and non-BlackBerry devices within an organization’s network. But they are too little too late.
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