Summits Yellow

Viewpoint: Zero Per Cent and Falling - The Decline of BlackBerry

Tim Maytom

As the most senior member of the editorial team here at Mobile Marketing (by some distance), I can’t help a little feeling of nostalgia from time to time. I still have fond memories of the Nokia Communicator, the Finnish company’s ahead-of-its-time idea of a smartphone, about the size and shape of a 6-inch Subway sandwich but much cooler to be seen with. I never actually owned one, but did manage blag one to review for a couple of weeks. Bit big and a bit heavy I thought, but a clever piece of kit nonetheless.

Back when the Communicator was released in 1996, another handset maker, BlackBerry, was launching its first device, the [email protected] Pager 900, a 2-way paging device. (Younger readers, talk to your parents. I meant about pagers, but thinking about it, you may never have seen a BlackBerry of any description, so rare a sight are they these days.)

Secure email
The first BlackBerry smartphone of the type the company is better known, the 957 arrived in 2000, followed three years later by the 7230, which added a colour screen and a web browser. By this point, BlackBerry had already established itself as the device of choice for business executives, almost entirely due to its ability to send and receive email securely.

So by Q3 2007, just after the iPhone was launched, BlackBerry (or RIM, short for Research in Motion as it was then known), held a 9.7 per cent share of the global smartphone OS market, according to figures from Statista. And despite the instant popularity of the iPhone – a device that BlackBerry’s senior executives took great pleasure in dismissing, publicly at least – BlackBerry’s market share continued to rise over the next couple of years. In fact, apart from a blip in Q3 2008, the company increased its market share every quarter following the launch of the iPhone in June 2007, until Q1 2009, when it peaked at 20.1 per cent.

Never again would it reach those dizzy heights, however, as Apple, in concert with the major Android handset makers, chipped away at BlackBerry and the company failed to respond with anything anywhere near cool enough or smart enough to fight back. In fact, were it not for the fact that BlackBerry became the device of choice for teenagers to communicate with each other on the firm’s BBM chat platform in the days before WhatsApp and SnapChat, things could have been even worse.

Since 2009, the company has steadily seen its market share eroded. In fact, it lost share in 17 straight quarters between Q4 2009, when it stood at 19.9 per cent, and Q1 2014, by which point it had fallen to just 0.5 per cent. Last week, BlackBerry’s market share officially hit zero, thanks to rounding, when a Gartner report into Q4 smartphone sales revealed that BlackBerry’s market share for the quarter was 0.0481 per cent of the overall market, off the back of sales of 207,900 BlackBerrys over the three-month period. iOS devices had a 17.9 per cent share for the quarter, while phones running the Android OS accounted for 81.7 per cent of sales.

BlackBerry 10 flop
BlackBerry has been in a bad place for some time of course. A relaunch of the OS as BlackBerry 10 in 2013 flopped, as did the phones that came with it, the Z10 and Q10. It has recently tried to reinvent itself as an enterprise solutions provider, and in September last year, with handset sales in terminal decline, it announced that it would no longer design or make its own phones.

With hindsight, it’s easy to see that BlackBerry’s demise owes much to its failure to take seriously the threat posed first by the iPhone and then by the legion of other touch-screen phones it inspired. First the firm was in denial. When the iPhone had secured a 20 per cent share of the US smartphone market, RIM co-chief executive Mike Lazaridis told the New York Times: “I couldn’t type on it and I still can’t type on it, and a lot of my friends can’t type on it. It’s hard to type on a piece of glass.”

Then when it saw how popular touch-screen phones were, it launched one of its own, the BlackBerry Storm, which has achieved fame, or rather notoriety, as one of the worst smartphones ever launched.
What next for BlackBerry? Who knows, but it looks like Laziridis knew what he was doing when he left the company in January 2012. Before the year was out, he had dumped his entire 5.1 per cent stake in the firm, some 26.8m shares, which were worth roughly twice as much on 10th December 2012 ($14.04) as they were last night ($7.36), even if that was only a fraction of BlackBerry's peak share price of $138.87 in April 2008.