Are You a Blackberry?

In 2012 Research in Motion’s (RIM aka Blackberry) revenues declined for the first time ever, down about $1.4 million from 2011. See RIM Consolidated Statement of Operations, March 3, 2012. RIM’s decline was the product of overconfidence, a failure to develop a clear strategy in response to a changing market, and a failure to invest in new technologies at the right time. RIM introduced the Blackberry wireless email solution in 1999, a product which revolutionized wireless messaging. See RIM 2009 Financial Disclosure. Two years later, it introduced its first Blackberry with a built-in phone. Id. It continued issue ground-breaking new products each year which enhanced customers’ access to superior enterprise integrated wireless messaging solutions.

However, in 2007, Apple’s release of the iPhone halted RIM’s progress. Rather than immediately responding to the threat of the iPhone, RIM rested on its laurels, assuming that it would be able to maintain its market share by virtue of its strong enterprise integration. See RIM 2009 Financial Disclosure. RIM’s response to the iPhone did not come until its market share began to steadily decline in 2009. See http://mashable.com/2012/06/25/rim-decline-chart/.

RIM’s late response to the iPhone lacked focus. In 2009, instead of trying to design the kind of innovative messaging solutions that once made RIM an industry leader, RIM released a host of inferior products, namely, the Blackberry Pearl, Blackberry Storm, Curve etc. in an effort to claw back market share.  However, all failed to compete with the iPhone. See RIM 2009 Financial Disclosure. Moreover, RIM’s lack of direction left it overly confident that its relationships with carriers and its enterprise integration would allow it to thrive. See RIM 2009 Financial Disclosure.

It was not until 2010 that RIM began more aggressively investing in technologies that might allow it to enhance its user interface to levels which might compete with the iPhone. RIM’s 2011 financial disclosures reveal that it acquired QNX Software Systems in July 2010, the company behind the user interface that eventually appeared in the Blackberry Playbook, RIM’s tablet answer to the iPad, which was not released until April 2011. Similarly, although RIM acquired Torch Mobile in 2009 to enhance its web browser based technology, the benefits of any enhancements did not appear in RIM products until the iPhone had already undergone several enhancements and increased market share.

RIM’s 2012 financial statements reveal a sharp decline in revenue and net income, down 15% and 66%, respectively, from 2011. These rapidly declining sales were most likley the product of indecision several years earlier. Specifically, its failure to react to the iPhone’s launch in 2007 and the lack of any clear strategy to remain relevant as late as 2009.

With the release of Blackberry 10, RIM hopes to compete in a smartphone market dominated by Apple and Samsung. However, its announcement that it may begin licensing the Blackberry 10 operating system indicates that the company still lacks focus and has failed to develop a long-term plan. See http://bgr.com/2012/06/28/rim-q1-2013-earnings-report-blackberry-revenue-profit-sales/. Indeed, the recent 17% decline in its stock value indicates that investors lack confidence that RIM has any clear direction.

At its inception RIM’s success derived from a well-engineered hardware designed to accommodate a simple messaging platform. As the market changed, RIM panicked and lost focus. Rather than continue to play “catch-up” with Apple, RIM would be better suited focusing on the kind of hardware enhancements that made its products successful.

Are you a Blackberry? Do you find your company straying from its strategic focus, lacks leadership or the agility to respond to the market?  If so, learn from Blackberry and reinvent yourself. Now.