BlackBerry has decided to shut its hardware division. The Canadian company will no longer build its signature smartphones.
Blackberry was considered among the elite in the devices business in the mid-2000s. In fact, BlackBerry has been a classic example of how a company that once dominated the smartphone world, spiralled down to a downfall. The company has had a loyal following and so when the news about BlackBerry pulling the plug on its hardware business surfaced, it feels like an era has come to an end.
What led to the downfall ?
- Just like Microsoft and Nokia – Research in Motion – as the company was known earlier, underestimated the iPhone and the growing Android market. Instead of evolving and adapting to changes, it did too little too late. The failed BB7 or BB10 weren’t bad, but they weren’t good enough for what the market was offering. The devices always fell short at competing with the iPhone or high-end Galaxy lineup from Samsung.
- The company spent a lot of time playing catch up. For instance, the company believed that BB10 would help it bounce back and recover its eroded market share. However, by the time BB10 devices hit the market, most of its loyal following had either switched to iOS or Android. The company still has a segment that’s loyal, but most of these people I know, use a BlackBerry alongside either an iPhone or Android smartphone. I have seen friends pull out the Priv and proudly talk about the capabilities of the BlackBerry Hub, whilst making a call from an iPhone.
- However, it wasn’t just about the touchscreen experience. The lack of apps played a huge role in its demise. Even its star performer BBM couldn’t really keep users hooked, who were soon attracted to other messaging services like WhatsApp, Facebook Messenger and so on. BlackBerry once enjoyed its position in the enterprise world, and among young users with its BBM. It’s the advent of apps, and BlackBerry’s inability to keep up with the pace that led to its rather slow death.
- The outrageous price tags that came with some its latest devices only made it worse. For instance, the Priv was a great device, but with app happy users and what the market has on offer, the company’s hardware was almost dead when the price was announced.
- Nokia and BlackBerry were both guilty of selling very good hardware. This meant refresh cycles were long and it took years for loyal customers to comeback for a new device. Yes, making good devices is no longer good business. Apple tries to woo you with a better phone every two years or so, making it a compelling upgrade. Others simply make phones that won’t offer the same user experience after a year or so, forcing an upgrade. Either way, the idea is not to let customers get too comfortable with a device.
As a brand, Blackberry phones are long dead. BlackBerry CEO John Chen, who is hailed for keeping the company alive even after it was considered almost dead back in 2013, made a new announcement.
Chen talked about a new strategy, wherein the company will focus on software. “Under this strategy, we are focusing on software development, including security and applications. The company plans to end all internal hardware development and will outsource that function to partners. This allows us to reduce capital requirements and enhance return on invested capital,” Chen said.