Rotten Fruit?

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BlackBerry have had one of the toughest few years in the history of the business. With network problems and poor sales behind them does BB10, their new software, have what it takes to save the company?

It seems as though RIM can’t stop the seemingly inevitable decline of the Blackberry. The brand once adored by the corporate world has slipped up again and again and no amount of PR spin or claims of a comeback can convince shareholders or potential investors that the good times will be back. Back in the day, RIM had a great idea to bring phone and email together launching the first Blackberry devices in 1999. Their great success came from being the first to offer a system a device and the software to back it up, which placed them in a position where they had control of their destiny whilst others struggled to marry together these three components. Nothing came close and it wasn’t long before every suit was glued to a Blackberry and the growth in market share was remarkable, yet predictable.

Over the last few years the executives at RIM have been scratching their heads trying to understand what’s gone wrong for their beloved Blackberry brand, but the answer here is not one single event, but a long line of PR blunders and misunderstanding of the device market. There’s been a disastrous level of miscommunication within the company and from the outside it appears to be a chaotic circus of panic and slapstick marketing. All this aside it’s important to remember that Blackberry is not yet out for the count although it’s going to take a seismic shift in corporate culture to bring them back to any semblance of past glories.

To fully understand just how far RIM misses the target let’s have a recap of events from the last five years. The first real wobble came when RIM dismissed Apple’s iPhone to its peril. Former CEO Jim Balsillie was quoted at the time as saying, “It’s one more entrant into an already busy space with lots of choice for consumers, but in terms of a sea-change for Blackberry I would think that’s overstating it.” Balsillie openly laughed off Apple’s attempt to enter the mobile device market saying that touchscreens would never replace the physical keyboard and this new breed of smartphone had no place in Blackberry’s core market. It’s one thing to deny the potential of touchscreen devices, but to be so complacent as to publicly denounce what was to become the world’s most popular mobile device was an expensive error in judgment.

The company rolled on with its existing device range but realising its mistake hastily released a touchscreen device, The Blackberry Storm, which was hardly a worthy competitor to the iPhone. It had no WiFi capability and poor touchscreen functionality. It sold below expectations and left loyal customers wondering what was going on. The Blackberry Torch arrived in 2010 as a hybrid touchscreen and physical keyboard device and was hailed as the answer to Blackberry’s sliding market share. The truth was that it was cumbersome and behind the times. Sales were poor with only 150,000 devices shipped in the first three days, compared to 1.7m iPhone 4 devices sold at launch.

The tide had turned and RIM had not only taken their eye off the ball, but they wouldn’t accept the fact that consumers weren’t interested. They seemed to have forgotten the end user and stuck rigidly to trying to please corporates and carriers. Other manufacturers were showing the consumer what they wanted and RIM were asking suits what they thought. We see a similar story in the tablet market with Blackberry dismissing these new devices at first and then hurriedly releasing their own Playbook, which was a vastly inferior product and had fundamental flaws, namely its lack of email support. The die was cast for RIM, Playbook sales were dismal and the lack of a plentiful app store has left RIM struggling to convince developers that they should be building Blackberry or Playbook apps. This is a problem that still exists and no amount of financial incentive seems to be enough for the app development community to be enticed.

The much-lauded new operating system, BB10, has been a long time in coming. The launch has been delayed several times and perhaps RIM have learned their lesson in this respect and have realized that it’s not a good idea to release another product before it’s fully ready and of a competitive standard. The launch is scheduled for this week (at the time of writing end of Jan 2013) and RIM are planning to launch six new mobile devices this year in a bid to recapture market share. I’m not alone in being unconvinced, but at the same time I wish them well and would like to see RIM pull itself back from the brink in true Hollywood style.

Setting aside the well-documented flaws in the Blackberry product range, its software and anticipation of market trends, we should take a look at the wider picture and PR slip ups in recent years, which read like a slapstick training manual for budding PRs. In 2007 Balsillie, then CEO, took the blame for a stock-option scan that cost the company $250m in restated earnings. The blunder cost him $5m of his own money and rocked investor confidence in his ability and integrity. Co-CEO Mike Laziridis did little to rebuild confidence and quickly earned a reputation for complaining about shareholder unrest. Senior employees within the company were losing faith in their co-CEO’s ability to steer the company and embarrassing email leaks in 2010 and 2011 showed senior executives complaining about senior mismanagement at board level and a dangerous misunderstanding of their customers. The response to this was weak and the PRs sat quietly waiting for the storm to die down.

In 2011 the network experienced a severe outage of service for days, leaving corporate users stranded. Whilst most customers will accept there will be occasional problems, the handling of communication from RIM was poor and the consequences were damaging as many corporate clients started to look elsewhere for fail safe options. A year later the problem re-occurred and this time the timing was embarrassing to say the least as Apple launched the iPhone 5 in a fanfare on the same day. Add to this the stories of drunken senior execs attacking airline staff on a flight to Beijing and a string of public gaffes and it’s easy to see why shareholders have lost their patience and why the founding CEOs needed to be replaced in early 2012. Thorsten Heins was appointed as president and CEO with a mammoth task on his hands.

Since Heins arrival there has been some degree of change in culture and more caution being taken around product development and launch. Frustratingly for Heins one of his first public interviews involved bashing touchscreen devices and this coincided with a Blackberry TV ad campaign in which Meredith Valiando extolled the virtues of keypads over touchscreens. Blackberry announced shortly afterwards that the first BB10 devices would be all touchscreen. It’s hard to imagine what RIM must be thinking and why the entire communications team has not been replaced. What’s still surprising is Blackberry’s inability to follow a suitable marketing strategy as we have seen a succession of advertising campaigns and PR stunts backfire. The Be Bold campaign was a universal flop and failed to identify with any sector of Blackberry’s customer base. The brand was fast losing corporate market share and becoming synonymous with teenagers who were unable to afford iPhones, which has lead to a dilution in the perceived value of the product. The company sent a flash mob to the Apple Store in Sydney holding banners saying ‘Wake Up’, deliberately inciting the Apple Fan Boy community. At first it was believed Samsung had organized the stunt, but when they rigorously denied involvement RIM had to step up and rather awkwardly admit blame.

All told it’s going to be a tough road back for RIM and they haven’t done enough yet to instill confidence. The future of RIM is hinged on the success of BB10 this year and it’ll take a minor miracle to bring them back into play with the likes of Samsung and Apple and with Nokia dragging themselves back into the game I can see a continued rough ride ahead for Blackberry.

For info: www.blackberry.com

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