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8/16/2013
10:53 AM
Eric Zeman
Eric Zeman
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BlackBerry's Collapse: 5 Key Mistakes

BlackBerry, once king of the smartphone market, now finds itself considering 'strategic options.' Here's how it all came apart.

Watching BlackBerry stumble and fall during the last few years has not been pleasant. The company once stood at the top of the smartphone market. Its smartphones were carried by mobile professionals in the tens of millions. These devices were the envy of the office, and the company helped push mobility in new and exciting directions.

And then everything went wrong.

The company made a number of mistakes along the way that led to its current position at the bottom of the smartphone market. It's still losing share. BlackBerry this week announced that it is exploring strategic options, including an outright sale of the company to investors or other third parties. BlackBerry is close to the end of the road and desperately seeking an escape route.

Here's how BlackBerry found itself trapped with nowhere to go.

1. It Wrote Off The iPhone

Former BlackBerry co-CEO Mike Lazaridis scoffed at the original iPhone. He thought it was a toy. He derided its poor battery life and balked at the idea that anyone would want to type on glass when BlackBerrys offered full QWERTY keyboards.

The original iPhone may not be impressive by today's standards, but there's no denying that it forever altered the smartphone paradigm. It offered a big screen, a capable browser and the best music/video experiences available from a mobile device, something that BlackBerrys (and most other smartphones at the time) did not.

As the saying goes, BlackBerry didn't adapt -- at least, not fast enough -- to the changes in the market. Classic Darwinism in action. (Nokia is guilty of this too.)

[ What's next for BlackBerry? Read Will BlackBerry 's Future Be A Piecemeal Sale? ]

2. It Wasted Resources On The PlayBook

The BlackBerry PlayBook tablet is one of the biggest tech industry failures in in recent memory. The company introduced the tablet during the fall of 2010 (following the debut of the original Apple iPad tablet earlier that year), and brought the PlayBook to market in April 2011.

BlackBerry's leadership probably thought it was responding to the Apple iPad in a timely manner, getting a competitive product to market as quickly as it could. It did this at the expense of its smartphones. BlackBerry pulled resources away from its smartphone development teams in the months leading up to the PlayBook's debut. Instead, it should have skipped the tablet altogether and focused on its core smartphone business, which was already in trouble. (Handset sales historically are responsible for 80% of BlackBerry's revenue.)

The one thing BlackBerry did right with the PlayBook was to base the operating system on QNX, which it had purchased earlier. QNX and PlayBook OS eventually led to the foundation of today's BlackBerry 10 operating system. If BlackBerry had only skipped the PlayBook and begun work on BlackBerry 10 right away, it might have had a better chance.

3. BlackBerry Didn't Fire Lazaridis And Balsillie Soon Enough

BlackBerry's former CEOs, Mike Lazaridis and Jim Balsillie, are far more responsible for the company's position today than is current CEO Thorsten Heins. Lazaridis and Balsillie were bullheaded and unwilling to change with the market. They ignored competitive threats from Apple and Google, they frittered away time and money pursuing the PlayBook, and by the time they realized their mistakes it was too late.

BlackBerry's board of directors should have recognized this sooner and done something about it. It was obvious to everyone else that Lazaridis and Balsillie didn't know how to handle the changing market.

Why did the board not see it? Had BlackBerry's board noticed the writing on the wall 12 months earlier, the company might be in a much better place right now. Was the board scared of what would happen if it fired the two founders of the company?

Lazaridis and Balsille stepped down from their co-CEO roles in December 2011, ceding control to Heins, who officially became CEO in January 2012. Heins hit the ground running, but BlackBerry was already too far behind to catch up.

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Frank Castle
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Frank Castle,
User Rank: Apprentice
8/23/2013 | 10:32:49 AM
re: BlackBerry's Collapse: 5 Key Mistakes
Did you last use a Blackberry in 2006? Outside of App gap Blackberry 10 provides a better mobile experience than iOS. The innovation in their touch keyboard, their best in class webkit browser etc.

I blame their awful marketing to not get this message out. Most consumers / enterprise users share your same view and have no idea the amount of change Blackberry 10 provides.
Frank Castle
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Frank Castle,
User Rank: Apprentice
8/23/2013 | 10:30:36 AM
re: BlackBerry's Collapse: 5 Key Mistakes
And yet we see the same happening to Apple. Just wait the gold (Champagne) iPhone is the ticket to offset the pounding Android is giving them. (sic)

Microsoft had a much bigger failure (and write off) for the Surface tablet yet we seem to push that under the carpet. Let's not mention they've pushed Windows Phone for almost two years and are only now seeing growth due to low cost models in Europe. How's the new Nokia's selling? I've yet to meet one Windows Phone user.

We all know the missteps Blackberry took. We seem to have a hard time recognizing the positive moves they have made the last year. Everyone is in such a rush to remove them for the market, agenda? personal interest? I guess a whole lot of people have an intense hatred for their time using a Blackberry. Yet I have a long list of things that annoy me about Android and iPhone. Are we so blinded by the consumer focus we downplay the enterprise weaknesses?

I wish Blackberry luck, go private and focus on making Blackberry 10 even better.
Cara Latham
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Cara Latham,
User Rank: Apprentice
8/20/2013 | 2:38:11 PM
re: BlackBerry's Collapse: 5 Key Mistakes
I agree with your assessment. True leaders pay attention to what their competitors are doing and focus on fostering innovation from within. Writing off others' innovations and having a strong aversion to change is deadly for any organization.
gev
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gev,
User Rank: Apprentice
8/19/2013 | 7:37:09 PM
re: BlackBerry's Collapse: 5 Key Mistakes
Reminds me of Sun with its Sparcs
Number 6
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Number 6,
User Rank: Strategist
8/19/2013 | 6:23:03 PM
re: BlackBerry's Collapse: 5 Key Mistakes
Classic disruptive innovation, which starts out as an inferior product that appeals to an overlooked market segment, eventually overtaking the incumbent, which can't abandon it's current bread-and-butter and instead opts for incremental enhancements. And strategic persistence/threat rigidity by the CEOs and board.
hstiles
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hstiles,
User Rank: Apprentice
8/19/2013 | 3:59:43 PM
re: BlackBerry's Collapse: 5 Key Mistakes
Blackberry would never have captured the top end market. They simply didn't have the R&D to compete with Apple or Samsung. So, abandoning the mid-range market in favour of high end devices was a big mistake. BB should have come to market with at least 3 BB10 handsets from the offset.

BB was and always would be primarily a messaging platform. It didn't have the developer ecosystem to complete with iOS or Android. It was never a battle for first or second place. The battle is for third place and the threat is Microsoft/Nokia, which has a comprehensive handset range that satisfies the corporate market.
RobPreston
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RobPreston,
User Rank: Author
8/19/2013 | 2:42:41 PM
re: BlackBerry's Collapse: 5 Key Mistakes
I also loved the BlackBerry keyboard--but it couldn't compensate for the terrible Web experience on that device. The iPhone's touchscreen keyboard is still inferior (though usable), but its Web experience is so far superior to the BlackBerry's. At least it was when my company gave up on the BlackBerry.
David F. Carr
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David F. Carr,
User Rank: Author
8/19/2013 | 12:39:19 PM
re: BlackBerry's Collapse: 5 Key Mistakes
I remember when I couldn't imagine giving up the physical keyboard, having been trained by the BlackBerry to expect that. My first Android phone had a slide out keyboard, but I eventually realized I rarely used it.
Guest
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Guest,
User Rank: Apprentice
8/18/2013 | 2:43:43 PM
re: BlackBerry's Collapse: 5 Key Mistakes
Let
me add the SIXTH MISTAKE: RIM did not focus on Indonesian customers and
too arrogant to built a server plant in Indonesia while it was a
booming trend to use blackberry. Indonesia is a market for more than 200
million people. Now android and iphones is plundering its market and
customers. They need to THINK: if a "THIRD WORLD COUNTRY" can buy any
items that cost 3x as much as it is in USA, they must really be a great
source of income. And when I mean they are able to buy, they really buy
it like it was just cheap. The cheapest BB here costs US$90 not
including the plan. Even some maids have blackberry. That's something
that certainly need to be accounted for.
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