Sat 05 Oct 2013 17:03
What's wrong with Blackberry? (and some ideas about how to fix it)
Blackberry is in the news a fair bit these days, and the news seems to be all bad.
As
the firm reports close to a billion dollars in quarterly losses, a Gartner
analyst recommends that enterprise customers find alternatives to Blackberry
over the next six months. What's the problem?
Basically, fewer and fewer people want to buy Blackberry phones. The problem isn't so much that Blackberries don't do what they're supposed to, it's that people now perceive iPhones and various Android phones as much better choices, and are buying those instead. Why? The reason is that an iPhone or an Android phone isn't the same sort of phone as a traditional Blackberry. An iPhone or an Android phone is a true smartphone, i.e. an "app" phone, a platform that runs a whole "ecosystem" of third party software. A traditional Blackberry is a "messaging" phone, a device that specializes in effective messaging, such as email. Yes, it can run applications too, but that's not its primary function, and it shows.
To illustrate, consider email. Sending email requires the ability to type quickly. A physical keyboard works best for this, one that stretches across the short side of the phone. The screen, located above the keyboard, then becomes roughly square: it can't be very wide, because the phone will then become too wide to hold easily or to fit in one's pocket, and it can't be very tall or the phone will become too long. A square screen is fine for messaging, but for other things that a smartphone might like to do, such as displaying video, one wants a screen that is significantly wider than it is tall. A smartphone handles this by having a rectangular screen: when doing messaging, one holds the phone vertical: the bottom half of the screen then turns into a keyboard, and the top half turns into a roughly square messaging display. When watching media, such as videos, the phone is held horizontal, allowing a screen that is wider than it is tall. Hence the smartphone is useful in a broader set of ways: it is not just a messaging device. Smartphones have become good enough at messaging that many people do not feel they need a dedicated messaging device. Once the smartphone is the only device that people feel they need to carry, there's much less demand for a messaging phone.
Blackberry realized the problem, and tried to create a smartphone of its own. For instance, in 2008, it released the Blackberry Storm. But it became clear that Blackberry's phone OS was not as well suited for general smartphone use as iOS and Android. The Storm was not a commercial success because it did not work as well as competing phones. In response, in 2010 Blackberry bought a company called QNX that had a powerful OS, and started building devices to use it: first the Playbook, released in spring 2011, and then the Z10 phone in early 2013, followed a few months later by the Q10 and other phone models.
The new Blackberry OS works better than the old in delivering smartphone apps, but it was not very mature in 2011, and was available only on a tablet (the Blackberry Playbook). Unfortunately, the Playbook did not sell particularly well because Blackberry badly misrepresented it, calling it the "best professional-grade table in the industry" though it lacked many features of the market-leading iPad, including key messaging features such as a standalone email client. While it could have been a market success if it were marketed as a Blackberry phone accessory, a role it could effectively play, at release it was clearly not a true general-purpose tablet like the iPad. So it accumulated few apps, while Apple's iOS and Google's Android accumulated many. Blackberry realized this fairly quickly, and released an Android application emulation environment for their OS in early 2012, which allowed many Android apps to be easily moved over to the new OS. But few Android developers bothered to make Blackberry versions of their Android apps, given the relatively few Playbooks sold.
In the meanwhile, Blackberry did itself no favours by making it clear that there was no future for its existing phones, while failing to deliver a phone running its new OS for more than a year. This merely encouraged Blackberry users and app developers alike to switch to another platform. When the Z10 phone finally came out in 2013, the bulk of its apps were those that had been written for or ported to the Playbook, a far less rich set of applications than any Android or iOS phone. And while the Z10 is a decent phone that comes with some very nice messaging features, Blackberry did not do an effective job of touting the unique features of the Z10 that iPhones and Android phones do not have. Moreover, the price was set high (about the same as an iPhone or high end Android phone) and Blackberry produced a huge number, expecting to sell a great many. Some sold, but many didn't, and Blackberry's recent $1B loss was due primarily to writing down the value of unsold Z10s.
Blackberry sits today in a difficult position. No, it is not about to go out of business: the company is debt-free and has a couple of billion dollars in the bank. But its smartphone is not selling. What should it do now?
Blackberry's best chance at this point to make its smartphone platform viable is to take its large inventories of written-down Z10 phones and sell them cheaply, using a renewed marketing campaign that focuses on the unique features of the phone's software. The Z10 hardware is really no different than the various Android and iPhone models out there: if the phone is to sell, it has to be on the basis of what makes it unique, and that's the Blackberry OS software. For instance, Blackberry should show everyone the clever virtual keyboard that supports fast one-handed typing, the unique messaging hub, and the "Blackberry Balance" software that lets you separate work items from personal items on the phone. Blackberry needs to hire the best marketing people in the world to help get the message out. This is a "make or break" situation for the platform.
Secondly, Blackberry should modify the OS to run Android apps natively, without repackaging. Android app developers are not going to repackage their apps for Blackberry. Blackberry needs to recognize this and make sure that Android apps will appear automatically on Blackberry devices. Blackberry will need to find a way to get Google Play (the Android app store) ported to the platform. It is too late to build a separate app ecosystem around the Blackberry OS: it has to leverage an existing ecosystem, or die. Android is really the only viable option for Blackberry right now.
Finally, Blackberry needs to recognize that a niche market for dedicated messaging devices exists, and continue making devices that are the best messaging phones available, while tapping into an existing app ecosystem. Blackberry needs to be careful not to compromise the devices' effectiveness for messaging: it should pay attention to how people use the devices in the real world, and address quickly whatever issues they have. If Blackberry can't find a way of building such messaging devices using its own OS, it should switch to Android. Blackberry knows how to make superb messaging phones, and it should find a way to continue to do what it does best.