Research in Motion and the BlackBerry : The New Yorker

An interesting piece tracking down the failures of RIM to change in new era. History is a guide but barely repeats itself exactly.

Five years ago, Research in Motion, maker of the BlackBerry, was one of the most acclaimed technology companies in the world. The BlackBerry dominated the smartphone market, was a staple of the business world, and had helped make texting a mainstream practice.

These days, it seems more like the SlackBerry. Thanks to the iPhone and Android devices, R.I.M.’s smartphone market share has plummeted; in the U.S., according to one estimate, it fell from forty-four per cent in 2009 to just ten per cent last year. The BlackBerry’s reputed addictiveness now looks like a myth; a recent study found that only a third of users planned to stick with it the next time they upgraded. R.I.M.’s stock price is down seventy-five per cent in the past year, and two weeks ago the company was forced to bring in a new C.E.O.

The easy explanation for what happened to R.I.M. is that, like so many other companies, it got run over by Apple. But the real problem is that the technology world changed, and R.I.M. didn’t. The BlackBerry was designed for businesses. Its true customers weren’t its users but the people who run corporate information-technology departments. The BlackBerry gave them what they wanted most: reliability and security. It was a closed system, running on its own network. The phone’s settings couldn’t easily be tinkered with by ordinary users. So businesses loved it, and R.I.M.’s assumption was that, once companies embraced the technology, consumers would, too.

This pattern—of winning over business and government markets and then reaching consumers—is a time-honored one. The telegraph was initially taken up mainly by railroads, financial institutions, and big companies. The telephone, though it became popular with consumers relatively quickly, was first used principally as a business tool.

Historically, new technologies have been very expensive—when phone service was introduced in New York, it cost the equivalent of two thousand dollars a month—and so early adopters have generally been companies that could make (or save) money by using them.

It didn’t. In fact, even as the BlackBerry was at the height of its popularity, we were entering the age of what’s inelegantly called the consumerization of I.T., or simply Bring Your Own Device.

In this new era, technological diffusion started to flow the other way—from consumers to businesses.

R.I.M. didn’t bring out a touch-screen phone until long after Apple, and the device that it eventually launched was a pale imitation of the iPhone.

R.I.M.’s product line became bewilderingly large, with inscrutable model names. If you’re a consumer, do you want the 8300 or the seemingly identical 8330? And the BlackBerry’s closed system has left R.I.M. ill equipped for a world in which phones and tablets are platforms for the whole app ecosystem.

via Research in Motion and the BlackBerry : The New Yorker.

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