BlackBerry hoped its BlackBerry 10 operating system would make its next generation of devices a must-have, revitalizing the company’s fortunes in the process.
Instead, sales of BlackBerry 10 smartphones are so anemic that BlackBerry is preparing to take a $960 million write-down on unsold inventory. That failure could help end BlackBerry’s existence as a publicly traded company. According to research firm Gartner, BlackBerry’s share of the global smartphone market stood at 2.7 percent in the second quarter of 2013—down from 5.2 percent in the same quarter last year, and a steep tumble from the 55.3 percent it commanded in Ye Olden Days of 2009 (when BlackBerry was still known as Research in Motion).
But why did BlackBerry 10 fail so spectacularly? The interface was polished, the features were next-generation, and BlackBerry managed to convince third-party developers to fill its app storefront with a respectable amount of software. Nor was it a stopgap measure slapped together at the last minute by inexperienced engineers; BlackBerry had spent years acquiring and fostering the software (particularly QNX) that would eventually constitute BlackBerry 10’s base.
Whatever its merits, BlackBerry 10 was a case of too little, too late. Sure, BlackBerry 10 was polished—but so were Google Android and Apple’s iOS. And while some BlackBerry 10 features (such as video-calling in BlackBerry Messenger) brought the BlackBerry ecosystem to parity with Android and iOS, no exclusive feature was enough to persuade users of alternate smartphone ecosystems to jump over to BlackBerry in droves. Meanwhile, BlackBerry could no longer rely on its shrinking core audience to make the phones a hit.
BYOD (Bring Your Own Device) was the final nail in the coffin. In previous years, BlackBerry could depend on IT administrators and corporate procurement specialists to purchase hundreds or even thousands of BlackBerry devices at a time. But when the bottom fell out of the economy in late 2008, those same executives embraced BYOD as a way to save money: why spend hundreds of thousands of dollars on BlackBerry devices when, with a little bit of modification, IT networks could be adapted to support employees’ personal iPhones and Android devices? From that point on, BlackBerry’s core strength—its corporate users—was undermined; it was only a matter of time before Apple and the various Android manufacturers began layering their own products with business-centric features designed to solidify their presence in boardrooms and cubicle-farms.
If BlackBerry had begun its course correction in 2008 or 2009, it might have released a new smartphone portfolio in enough time to stop the worst of its audience erosion. Instead, the company’s executives seemed more interested in iterative upgrades than updating its software and hardware to appeal to consumers’ new desires in an iPhone-driven world. By the time work began in earnest on BlackBerry 10, it was already too late.