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Blackberry is dead, long live Blackberry

Blackberry has been an iconic brand in many ways, and its passing as a handset manufacturer has attracted a lot of attention. Reaction has been pretty negative: Blackberry phones are NO MORE, screams the Daily Express. A quick Google will tell you there are a lot more like that. In many ways it’s unsurprising.

Blackberry had become a brand that was emblematic of a particular generation. It ushered in the always-on generation. Before social media became widespread, a particular type of professional would check their Blackberry constantly, convincing everybody else that they were clinically workaholics . That generation, however, is arguably associated with the Blair years in the UK. It’s no surprise, therefore, that a totem of a somewhat tarnished age is coming down.

Except it isn’t.

Blackberry as a software company

The company began not as a handset company but as a software business called Research In Motion (RIM). Or more accurately, as it didn’t have apps, an environment company. Its always-on network, it’s easy to forget, predated universal broadband (where “universal” means “we hope you don’t work in a rural area”). The notion that you could or should pick up emails wherever you were was unique.

The security behind it was also impressive. I once media trained a company whose proud boast was that they could do Blackberry type security without buying the technology. They may have abandoned this as a selling point as BB’s star has fallen, but it was an aspirational statement at the time.

The cloud wasn’t particularly big as RIM grew. People were starting to use Gmail and other services but the notion of tapping into a network that was hosted by someone else wasn’t popular in the corporate world until it noticed the huge security advantages.

It made point of sale systems and it made pagers. It was a natural step in the late 1990s to start designing the handsets that made this mobility possible. For a while the company looked unstoppable. It had its niche, it had a virtually impregnable network, then the mis-steps started: some from within the company and some were blows from outside.

Teenage rampage

What do you do if your business is the definitive corporate networking tool for the mobile professional, and just about every network support operative can work with it? The answer for RIM was to start addressing the consumer market. It did this in two ways other than old-fashioned marketing. It started to add music capabilities to its phones and camera functions as well. It also made its messaging app, Blackberry Messenger (BBM), a key selling point.

There were certainly short term gains but the cracks started to show relatively quickly. The first serious mistake was to follow Apple’s example and release a tablet computer to accompany the phones; called the Playbook (not a great brand for a business audience). It launched in 2011 and in spite of aggressive price cutting sold only 2.5m units by 2013. As the stocks ran down, no new model was forthcoming.

By this time the company had also suffered its four-day outage in 2011. The share price was affected and crucially, pundits and customers blamed poor support and badly managed expansion. The technology might have been great but the business was pulling itself in too many different directions.

Its answer was to refocus on the corporate market with its new device, the Blackberry 10 and the jettisoning of the RIM name in early 2013. The company would simply be known as Blackberry. Its focus would be on corporate networking with the handsets a useful commercial add-on.

Back to basics

Upset though the teenagers were, they could console themselves with increasingly smart-looking phones from Apple, Samsung and the rest. The problem was that the corporates, by now, could do the same. The technorati and government might prefer Blackberry – in his new memoir, former deputy prime minister Nick Clegg bemoans having to surrender his personal phone and use a secure Blackberry instead – but the end users couldn’t see the point. Android and iOS looked secure enough and there was by now a Blackberry messenger app.

The Blackberry 10 didn’t perform as hoped in terms of sales and the app developers didn’t flock to it. You could speculate that the management knew it would be a loser: the tension in RIM’s European MD Stephen Bates’ voice and his reluctance to stray from a script is audible in this BBC interview. The focus continued away from Blackberry phones and the company even launched an Android-based phone, the Priv, which has also not set the world alight.

Farewell to the deadwood

It’s easy to see why people are painting this as a negative story but it may not be. Pulling back from the hardware and focusing on the infrastructure is arguably a return to, or rather refocus on, the organisation’s roots and strengths. It can’t afford another outage like the one in 2011 so it’s throwing everything at the secure network and environment rather than playing to the crowd.

Initially this might mean some disaffected customers who were looking forward to their next upgrade and now won’t get it (the company is talking about outsourcing handset design and manufacture but whereas this might have been viable in 2009 when it had 20.1% of the market share for operating systems, it’s more difficult to see it as appealing now when it has 0.1% according to this snapshot from Statista).

It was always a short-term, bad idea to go into the teenage market and to attack Apple and others in the tablet arena without the app developers or, let’s be honest, the marketing clout. At a point at which handsets are effectively commoditised and sold only on price, it’s easy to see that there won’t be much profit in those for the foreseeable future either. Blackberry has chosen to focus on its original, core business. This isn’t a negative story but a tale of common sense.

How the market responds to it in the longer term will be telling, but Blackberry isn’t finished yet.