It’s striking how a company like Research in Motion (RIM) went under the radar so fast, considering it used to completely dominate the smartphone market only a couple of years ago. After all, Blackberry almost used to be synonymous with a smartphone, although competition wasn’t so fierce back then. Then the iPhone came out in 2007. Spoosh! In just one year, the $67 billion company came tumbling down. How in the world does something like that happen? Well, as fast as companies rise in tech, they fall just as hard. Basically, a mixture of hubris, sluggishness and misplaced efforts brought RIM down fast and hard, but it’s not dead yet.
CEO John Chen says that we haven’t heard the last from RIM, or its flagship series – the Blackberry. Should we trust him though? Blackberry has a marketshare of about 0.3%, down from 2.9% since Chen first took the helm of the company. In his defense, it was going downhill long before he appeared in the picture. Last quarter, the company sold 1.6 million smartphones, which is a far cry from Apple’s 61.2 million iPhones sold in the same time frame. In an interview with Business Insider, however, Chen revealed that he wants to make Blackberry’s smartphone business profitable again. Really? What CEO doesn’t want to?
Anyway, since he’s been CEO these past 18 months, he has significantly changed the company’s direction. Realizing that there’s little they can do in the face of the iPhone and cheap Android-based competitors, Chen re-oriented the company away from B2C to enterprise. The focus is governments, the military and a few corporate clients who need the only thing the Blackberry is still good for: security.
“I can only make iPhone so much more secure, but I can’t make it as secure as a BlackBerry device,” Chen said. “If you look at the US Army, they’re still rolling out all BlackBerry. If I tell them there are no more phones, I lose that account. The question is how do you make phones profitable at the volume those people represent?”
But how many phones can you sell to the military and a few corporate privacy freaks? There’s only so much you can charge for “premium security.” Obviously, Chen seems to have some ace up his sleeve (I hope, for his sake), but he’s hasn’t shared many. According to Business Insider, his bid is to upgrade the security side of the business by making it more visually attractive. Great design was never one of Blackberry’s caveats, though some users genuinely like the way it looks and feels. One bet seems to be on the BlackBerry Passport, which doesn’t look half as uninteresting.
“It’s a combination of everything,” Chen said. “First of all you really do have to have a focus on design. At the end of the day, a big part of this is about the product.”
But again, Blackberry stopped chasing the smartphone client business long ago. We can only infer that Blackberry will be heavily stepping-up its enterprise game by expanding its business, either buying out or partnering with growing companies that are doing good locally with enterprise voice and data. So far, things don’t look particularly bright for Blackberry.
This is just one piece of the puzzle, design is the other, but what about the rest? Hopefully something innovative. That’s their only hope.
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