Starting as far back as 2011, both IT and financial experts have been predicting the end of BlackBerry. That’s when RIM (Research in Motion), the maker of the BlackBerry, saw its share prices bottom out. It was also the first time that buyout rumors started to surface. But those rumors remained as only that until the fall of 2013. The road to that point was slow and painful. During that period, both iPhone and Android devices grew in popularity at BlackBerry’s expense. In January of 2012, founders and CEOs, Mike Lazaridis and Jim Balsillie, both resigned. This was two months before the company reported its first big loss. This plus other problems caused a further delay in the release of the new, BlackBerry 10 smartphone until January, 2013. When it was finally released, BlackBerry announced that it would change its brand name from RIM to BlackBerry. Unfortunately, neither the name change nor BlackBerry 10 could save the company, and in August of that year, BlackBerry announced that it was up for sale. It appeared that Fairfax Financial Holdings would buy the company. However, by November, it became clear that this was not to be the case. Fairfax would only be investing in the company. That same month, CEO Thorsten Heins abandoned what appeared to everyone as a sinking ship. The stock price had fallen 91% from its peak in 2009. Many were continuing to predict the end of BlackBerry, and you could not really blame them for doing so. Then, John Chen took over.
John Chen has an optimistic (some say overly optimistic) and aggressive style that may irk competitors but certainly has gone a long way towards putting the BlackBerry name back in the public eye. If nothing else, his style has been a marketing success. It alone may have kept BlackBerry afloat long enough for other factors to kick in. One of those factors is the continuing view that BlackBerry offers the most secure mobile devices. A recent survey by 451 Research found that “45% of enterprise respondents give BlackBerry a ‘very secure’ rating”. This compares to a 26% rating for Apple’s IOS, an 11% rating for Android, and a 9% rating for Windows Phone 8. This clearly shows that the base BlackBerry must build on is that of having the highest level of security available. This alone could enable it to be competitive, if not dominant, in enterprises interested in establishing a BYOD environment.
This security advantage may be one reason why other major mobile device manufacturers have tried to kill BlackBerry. Microsoft bypassed purchasing BlackBerry in 2013 in favor of Nokia, which some analysts thought was a huge blunder. This may have been done to acquire a known hardware producer but it was clear that they had previously considered buying BlackBerry. In fact, Microsoft, Apple, Google, Cisco, and Lenovo expressed interest in buying some of BlackBerry’s patents, but BlackBerry’s board refused to break up the company. However, it may have been that Microsoft believed BlackBerry to be in a death spiral. In this case, there would have been no reason to worry about BlackBerry’s enterprise security rivaling its own, new, security, which has just appeared in the latest Windows Phone 8.1. Unfortunately for Microsoft, BlackBerry didn’t die and Microsoft will still have to compete against it in the BYOD arena.
That brings us to contender number 2, Apple. During BlackBerry’s low point, last fall, Apple expressed interest in buying BlackBerry and some said it would be a good move in positioning itself against long term Android rivals Google and Samsung. Apple later decided to save money and take a shot at some of BlackBerry’s patents, but they were rebuked and, eventually, BlackBerry decided not to sell its company. However, Apple figured out another way to kill BlackBerry. They would partner with IBM to offer better enterprise devices and, hopefully, deal a deathblow to BlackBerry by taking over its enterprise customers. After all, Apple had a much larger percentage of the smartphone market which could, logically, lead to a larger percentage of the enterprise BYOD market. All they needed was to prove that they were as good at security as BlackBerry and the case was closed. BlackBerry would then be marginalized and sink into oblivion. Initially, the market seemed to agree with this scenario. However, as of this writing, and after a brief fall, BlackBerry’s share price seems to have stabilized. It is still too early to tell how much this merger will hurt BlackBerry but, if past performance is any indication, it is likely that BlackBerry will survive it.
Not to be outdone by its archrival, Apple, Samsung teamed up with Google to strengthen Google’s Android security and, in effect, knock BlackBerry out of enterprise contention. Chen had already taken a swipe at Samsung when he remarked, with some justification, that “KNOX tries to build a fortress upon an insecure foundation”. After the partnership was announced, he went on to say that “while we applaud Google and Samsung for their plans, we don’t think it’s enough for security-minded enterprises. Instead, look to the companies that have literally invested three decades into advancing the twin causes of security and productivity. In other words, don’t be dazzled by those who can talk the security talk. Instead, look to the company that has proven repeatedly that it can walk the walk.” When subsequent rumors spread that Samsung might be abandoning Knox to work with Good Technology on security for its new Tizen operating system, BlackBerry’s stock price rose. Then, BlackBerry was blindsided once again, this time by the Department of Defense. The U.S. government, which had previously refused to approve Android devices for use because they were not secure enough, surprisingly approved Samsung mobile devices. This let Samsung into a region formerly dominated by BlackBerry. Once again, experts were predicting BlackBerry’s certain collapse.
But it doesn’t end there. Now, the same experts are predicting that BlackBerry’s new, square smartphone, the Passport, will fail, even before it has come out. (A leaked, apparently valid, video of the Passport can be found here.) Others are predicting the company will die in 2015. However, just to be contrary, let’s suppose that it doesn’t die. Why might BlackBerry survive? What is it about BlackBerry users that make them so loyal? In three words, these people value security, privacy, and a keyboard. Everyone agrees that BlackBerry is secure, even its competitors, otherwise, why did they try so hard to buy its patents and why did they try so hard to marginalize the company? A recent article pointed out that the drive towards BYOD has made a lot of employees angry over their loss of privacy. Workers simply don’t like the idea that the company can look through their smartphones whenever they want. Employees simply don’t realize that mobile device management (MDM) means that they have to give up some of their user rights. The article quoted one IT executive remarking that “Maybe 60 percent of the people requested to go back to a BlackBerry and carry two devices. We were shocked, blown away, by the privacy reaction.”
Finally, the keyboard. Now, I should note that I have no connection to BlackBerry. I was just curious about how the company was managing to survive the onslaught it was up against. I don’t own a BlackBerry myself, but, as I do a lot of text messaging, I opted for a phone with a physical keyboard. I just don’t like a digital keyboard when I’m writing long messages. Apparently, BlackBerry loyalists feel much the same. They aren’t all that interested in new apps, games, or even taking pictures. They’re interested in basic communication. This was why BlackBerry developed a larger keyboard to use with its Passport. But will this phone appeal to enough people to help the company survive? I don’t know. I have a feeling that the new look might, of itself, appeal to people who want to show they have something different. I think most people would have to work with the phone a while before they could tell if it has what they want, and they’ll have to wait until September to do this. (If you’re out there, John Chen, just send me a Passport, I’ll let everyone know what I think its chances are.)
So what’s the bottom line? Will BlackBerry survive? No one can answer this question. If you think you can predict the future in the technology field, you are deluding yourself. Who would have thought BlackBerry would fall from grace so quickly? Who would have thought, a year ago, that the high-flying Samsung would see its smartphone sales plunge or that the smartphone market in general would begin to show signs of playing out? There does not seem to be any exciting new technology on the mobile device horizon. Most big companies are investing in wearable technology, but those who’ve tried it say that, after the initial novelty wears off, the main use of this technology is to tell time. Such technology will likely fill a market niche and I suspect the same will be true of BlackBerry. As long as security remains a priority and COPE gains ascendance over BYOD, BlackBerry should appeal to enterprises that require high levels of security. One thing is for sure. Over the next year the major mobile players will reposition themselves. We’ll have to wait to see if BlackBerry is still among them.
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