WHO CHOPPED DOWN THE BLACKBERRY TREE?

By:   |   June 27th, 2012   |   Business
RIM

It’s become abundantly clear that the descent of Research in Motion from a leader of technology to a stagnant lead weight began when the iPhone was introduced into the market back in 2007.  Executives of RIM didn’t fully grasp at that time that the infamous BlackBerry could be undermined and essentially replaced by a phone which retailed at a whopping $500.  In addition, the iPhone had built no reputation with the general population, nor did it offer a keyboard.  Apple then proceeded to knock the BlackBerry out of the ballpark by selling in excess of 100 million of these iPhones, which blasted the company into the next galaxy in terms of value.

 

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WERE THE SEEDS ROTTEN?

In the meantime, a fool was made out of the formerly proud Research in Motion.  Market capitalization decreased by three-fourths in the last annual term.  Mike Lazaridis and Jim Balsillie, long-standing leaders for RIM, relinquished their authority leaving the public to question whether there was still a chance that the new CEO could salvage what was left.

 

The exact timeline of the rise and fall of RIM is complicated to say the least.  Lazardis reportedly established RIM while he was attending the University of Waterloo as a student in engineering.  From then to the most recent BBC interview is an utter rollercoaster ride.

 

The history of missteps by the company is a series of red flags for technology buffs.  Any company can get easily caught up on the back side of the curve, therefore facing the same demise.  An estimated 2,000 workers within the company have been dismissed and those who are still employed have limited work.

 

Just 5 years before, RIM was known as the highest ranked technology maker on the globe.  Their BlackBerry release was a dominator in the market of smartphones; it was a leader in the world of business; and was one of the first companies responsible for thrusting texting into the mainstream.  Profitability was incredible and the BlackBerry became a touchstone in every culture.  Webster’s dictionary even coined the word “CrackBerry” in the year 2006.

 

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LOOK OUT BELOW!

A few years later and it seems as though Webster’s needs to add the word “slackberry” to its list.  Android and iPhone devices have contributed to the rapid decrease in RIM’s market share.  Reportedly, in the year 2009 the market share for RIM plummeted by an estimated 34%.  Addictions to the BlackBerry now seem to be part of an urban legend.  Reports are indicating that only 30% of users intend to keep their BlackBerry when it comes time for upgrade.  Stocks are down 75% in the previous year and a new CEO has been brought to the table in the last few weeks.

 

It seems that RIM can be added to the list of companies who have fallen off the Apple cart.  However, the real issue is the change in the world of technology – which RIM seems to have missed.  RIM designed the BlackBerry for use by businesses.  The real customer base wasn’t users in general, but individuals who own and operate corporate IT departments.  These individuals got what they most desired from the BlackBerry: security and reliability.  This was a system which ran on a personal network and offered a system which was closed.  Everyday users couldn’t easily adjust the settings on the BlackBerry.  The general assumption from RIM was that because the device was loved by businesses, it would be embraced by consumers as well.

 

This assumption has been the source of disaster for RIM.  A successful business cannot remain clueless concerning the demands of the consumer.  The brand name (BlackBerry) was initially seen as successful and revolutionary; however, the bewildering vastness of RIM’s line of products has resulted in a company who is poorly equipped for the population which demands platforms without limits.

 

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