Blackberry the death knell

No surprise, the latest news from Canada is that the once mighty smart phone manufacturer is exploring strategic “options.” Not really a surprise. Since the rise of Android as well as IOS, Blackberry has seen its market share take a nose dive. Add to the mix Microsoft who has resurrected its own mobile business and you have the perfect storm to seeing Blackberry taking a nose dive.

Another major shift that has taken over the smart phone market is the move away from email. Blackberry made hay with the best email platform, really the first provider who came out with email. For some time there were others in the space like Palm with their Treo (I had one before I migrated to the Blackberry). But Blackberry cornered the market by providing a secure and powerful email platform combined with handhelds geared specifically to email. Yet with the rise of SMS and social media (twitter, facebook, instagram…) we have more communication vehicles outside of plain old email. Combine this with our smart phones becoming our hub for banking, entertainment, gaming, travel, news etc etc and you have the perfect storm for a handheld designed for email but not for much more.

BB10…the last stand

So now we have reached what feels like a final chapter in the history of Blackberry. It felt like the release of

the Blackberry 10 was a last gasp effort to try and right the ship. While it showed some early mild success, that path was short lived. So who would want to acquire the Pontiac of the smartphone?

I do not think any company will look to acquire Blackberry as a complete entity. Here is a list of the assets available – click here to read WSJ piece. I think that a private equity firm will swoop in and acquire the firm.

• Leverage all that cash to pay themselves a nice dividend as well as leverage the company to fund the acquisition.
• I could see BBM set free, allow them to try and compete with the other IM platforms. They already have a decent following and by all reports have a good system – we know it is secure!
• The Blackberry 10 platform is not going to be acquired by MSFT or Nokia or Samsung…but why not Oracle or…gasp SAP? Why? These two technology giants could leverage the mobile platform to tie into their supply chain solutions, ERP, CRM or various other applications. One thing that no one would question about Blackberry is their security. Seriously, when secret service agencies such as the Saudis cannot hack your system…you have a good security system.
• The hardware might be sold to the lowest bidder…may
  

  Biding their time…

  be someone who is looking for ready made hardware to get into 3rd world markets. But that will not be a cash deluge by any means.

• The patents might be hidden assets that companies could be interested inpicking off.

Unfortunately for Blackberry the vultures are circling. It is a matter of who purchases the carcass and strips down the assets and sells the parts. Feels like what happens with stolen cars and chop shops.

How the mighty have fallen.

Blackberry thinks what??? Tablets aren’t worth it?

Wow. In a recent interview, Blackberry CEO Thorsten Heins, claims that there is a limited future for the tablet. Really? He makes this statement as Apple generates more revenue from their tablets than Blackberry did from their entire business ($8.7b v $2.7b). This smells like a statement made in light of a

We hardly knew ya!

failed foray into the tablet market. This is just reflective of Blackberry’s demise – being a dollar late and a day late. Blackberry, like many of us, were caught off guard by the rise of the iPhone. Yes I will admit that I was a loyal Blackberry user and now I have no idea what I was thinking (I am on my second iPhone). However this is no excuse for Blackberry. Lots of companies were caught off guard, and many have been able to react and get back into the game – Samsung being a perfect example. Yet Blackberry appears to have their collective heads in the sand for example:

• Secure email was no longer the #1 selling reason for a smartphone – apps were. But for the business world having secure communications remains important. Double down on the corporate play, rather than trying to half appeal to developers to create apps for phones that aren’t designed well for apps (late to touch screen).
• Speaking of touch screens – stop trying to appeal to those who still wanted a tactile keyboard…with a phone that offered both tactile and touch. I will admit, again, that I resisted the notion of a touch screen keyboard. But I also was not going to try and use a device that had both. The Blackberry 10 finally has gone all in with the full touch screen…only a few years late.
• We need a tablet…oh wait there is no future. Blackberry did come out with a, from an engineering stand point, was a good device the Playbook. Yet once again it was late and marketed as an iPad competitor. Maybe it should have been targeted to the corporate world as a laptop replacement. Get ahead of the BYOD wave. Get these into the hands of IT departments and offer them as an alternative to laptops. Blackberry remains one of the most secure systems…lean on that advantage.

I guess the latest from Blackberry is another example of “if I say it…it will be true.” Unfortunately Blackberry is giving us a wonderful example of a great brand and product that has been caught behind the curve. Rather than recognizing this they are trying to convince themselves this is June 28, 2007 and the term iPhone has yet to enter our lexicon.

Blackberry – get back to your core business…businesses!!

I had a good lunch today with a former colleague today and our discussion at one point turned to the world of mobile devices. One company that came up was RIM and the Blackberry…mind you we both worked with RIM via our former employer so we  had been exposed to the Canadian company at a deeper level than simply as users of their hand held devices.

We both lamented at how far RIM has fallen in the world of smart phones. Remember when the Blackberry was the “coolest” device one could own? It was the one device that we could get our emails on, make calls, had a fully qwerty keyboard and eventually do some web browsing. Wow. It was great! Then other players came on the market to compete such as Palm’s Treo. All this changed beginning of 2007, with the announcement of the Apply iPhone. Of course some scoffed at the  new kid on the block, you could not remote scrub the phones if lost, you did have the speed of a Blackberry server to deliver your email and sync you calendar and overall the new iPhone was a cute toy but would not get into corporate America. Throw into the mix the fact that Steve Jobs always seemed to be allergic to the corporate business and RIM thought their world was safe. Ooops.

Today, we also have the Android from Google that has come out with a vast amount of devices running the operating system coupled with the newly released iPhone 4 and are breaking down the barrier between consumer and professional smartphones.

This past weekend, RIM released their new hand held, the new Blackberry that would once again seize what is rightfully RIM’s a leadership role in the smartphone space. Unfortunately the sales from the first weekend were nothing short of a disappointment  – 150,000 units sold. Compare this with iPhone 4 that sold 1.7m units during its first weekend. I realize we can argue that we are comparing apples and oranges, but the perception is that RIM has completely lost its fast ball. Some would even argue that RIM is on the verge of…saying bye bye.

Now the reality is that RIM still holds a solid market share 43% vs Apples 25% an enviable position, except when you realize that Apple grew that share from nothing to where it is today in 3 years. Couple this with the rapid growth of Android from Google and you have a situation where RIM is fighting a defensive battle against 2 formidable opponents. However there is a silver lining in all this…something Jay brought up today at lunch. The other news about RIM has surrounded their problems with the government in Saudi Arabia and the fact their encryption is too strong to be snooped on. Now RIM has had to allow governments to have some visibility into the communication. If the governments of Saudi Arabia, China, Russia to name a few cannot break your encryption what does that say about  your security? It is pretty darn solid.

Rather than competing with Apple and Google on the “coolness” factor – go back to your core business – the business world! I realize that the iPhone is creeping into that space, but rather than trying to compete on the battlefields dominated by Apply and Google position your devices as rock solid, robust, safe and can be trusted to protect your corporate information. Hey if the Saudi government cannot hack it, how could your competitors? I am sure that most IT departments and companies would much rather know their corporate smart-phones have this level of security.

It might not be sexy, it might not have a coolness to it but companies are not all Nike, Adidas, Disney, Apple, Google, Facebook…but there are many businesses that grind away without the “coolness” glow and do very well at it. It might be time for RIM to recognize this and focus on this strategy, otherwise, as George Colony wrote, it might be goodbye RIM.