Mark Ritson Columnist

Mark is an Associate Professor of Marketing at Melbourne Business School and is recognised as one of the world's leading experts on brand strategy. His clients have included McKinsey, PepsiCo, Donna Karan, Johnson & Johnson, Dom Perignon, Baxter, De Beers, Krug, Ericsson and WD40.

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Blood in the water: Why it all went wrong for BlackBerry

Published 19 August 2013 09:27, Updated 05 November 2013 12:33

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Blood in the water: Why it all went wrong for BlackBerry

BlackBerry has gone from being synonymous with smartphones to being a struggling company up for sale in just a few short years. Photo: AP

What an amazing year 2008 must have been for BlackBerry. Despite only introducing their first device nine years earlier, the brand – named after its signature black keys that looked similar to the skin of a blackberry – was enjoying an extraordinary run.

It had just achieved a whopping 50 per cent share of the smartphone market in the USA and, with 30 million global users, its international sales were also tracking upwards. The brand would eventually achieve an astonishing 20 per cent share of global smartphone sales. Barely 24 hours passed without one famous celebrity or another being spotted with their BlackBerry in hand. Perhaps best of all, a young Senator from Illinois named Barack Obama who carried his BlackBerry around with him wherever he went, had just announced he was running for President and the outside money was saying he had a shot.

US President Barack Obama checks his BlackBerry in 2010. Photo: The White House

Five years on and it’s a very different story. BlackBerry will end 2013 with barely 1 per cent of the American smartphone market and a similar paltry slice of the market here in Australia.

Its recent product launches, including the all-important Z10, have failed to attract consumers, and with long-term prospects fading fast, the company is now officially for sale. It’s always darkest just before it goes completely black. So where did it all go wrong?

Let’s start with strategy, or rather the lack of it. Harvard Business School professor Michael Porter has long maintained that strategy is about making choices. If you want to see what he means, take a long hard look at BlackBerry because it is a company that has ridiculously and repeatedly been unable to make any.

For many years it was run by not one but two CEOs, Jim Balsillie and Mike Lazaridis, because neither leader would step up or down in the corporate hierarchy.

The same indecision affected products. BlackBerry’s much-feted tablet, the Playbook, was a total disaster because the company could not decide whether the device was aimed at the original corporate market it had originally targeted or the recreational user that now accounted for some 75 per cent of sales.

When you don’t make the big decisions, and try and create a device for both a CEO and a 17-year-old, you end up making a product no one buys.

BlackBerry was also haunted by marketing blunders. In October 2010, the brand suffered an enormous crisis of confidence when all messaging was blacked out for several days across the globe.

The blackout itself was incredibly damaging – but the horrendously slow crisis management response by BlackBerry during the saga made a terrible situation even worse.

Equally damaging was the recruitment of Alicia Keys as the brand’s new global creative director. When the move was announced at the start of this year BlackBerry explained that Keys had been hired to “shape our brand and grow our business”. The move was greeted with general guffaws from the marketing and telcos communities and the laughter only increased when Keys was caught tweeting on her iPhone barely a month later.

Not all of BlackBerry’s problems were of its own making. It also suffered from a changing competitive landscape. BlackBerry was the marketing and technology leader when it entered the smartphone category and encountered incumbents like Sony Ericsson, Nokia and Motorola. A few years later that same approach was vastly outgunned by more aggressive and accomplished entrants like Apple, Google and Samsung, who had emerged as the new dominant brands.

As I like to tell my MBA students, I look thinner when I hang out with my fat friends. BlackBerry only looked awesome while it was standing next to its now equally defunct initial rivals.

And then there is the issue of the smartphone category itself. It’s a tough business.

The category is evolving fast, and most consumers look to replace and upgrade their handset every other year. A market metabolism that fast means that if you make slip-ups, you will pay for them quickly and dearly. For most business people their smartphone is their most identifiable physical point of difference with colleagues.

The minute there was branding blood in the water and the BlackBerry was seen as being for losers or out of date executives, the impact on market share was always going to be caustic. Rumours of the brand’s disappearance will only speed its rejection by users.

So where next for Canada’s most famous tech brand? There are no second acts in smartphones. The brand and its astonishing rise will soon be consigned to just a footnote in early 21st Century history. It will join the likes of Psion and Nokia (yes, Nokia) as a once famed, now failed, brand. All BlackBerry has left are the patents and fixed assets that are still, at least for now, worth considerable amounts of money to the right buyer. It’s time to hang up on BlackBerry.

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