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orgtheory question of the day: why is blackberry not dead yet?

People keep predicting the death of BlackBerry. And it’s obvious they lost the mobile battle, though the recent phones do have fans and work well. Just too little, too late. So what’s the deal? Is it just the pile of cash? How are they alive after revenue dropped by $1  BILLION?

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Written by fabiorojas

March 14, 2014 at 12:01 am

9 Responses

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  1. Good question. I’d hazard a guess that the key reason is … large corporations, and more specifically the structural inertia built into corporate IT procurement policies and cultural norms, which combines to underpin Blackberry’s sales prospects – at least over the medium-term.

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    RichardB

    March 14, 2014 at 9:40 am

  2. Revenue can drop by quite a lot assuming they are making a profit on each individual phone. They’ve got to pay for infrastructure costs and the like, but as long as they aren’t too extravagant, they can survive.
    A few folks have suggested that they refused to play ball with the NSA. So, instead of the mainstream assumption that they just fell behind in terms of innovation, there is a suggestion that the NSA can really screw up your business when you don’t play along.
    If I were them, regardless of whether or not the NSA thing is true, I would act as if it was- i.e. introduce products and services that are encrypted and hardened against NSA intrusion. There is an entire globe of people who are really unhappy about this spying- and plenty of businessmen who could easily assume the NSA isn’t just spying but engaging in industrial espionage.

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    August

    March 14, 2014 at 1:42 pm

  3. August: you are right about that. The question is then whether the BlackBerry brand can be reformulated so that it can widely appeal to larger markets that care about security.

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    fabiorojas

    March 14, 2014 at 6:20 pm

  4. Hi Fabio, You may not have realized this, but when you got lost near CCNY, a Blackberry was telling you to “walk AWAY from, not towards, the red sculpture,” etc. Anyhows…a clue might be in the number of BBM users (think snapchat and what’s up? acquisitions by FB to expand their market) plus the aforementioned security features. See http://crackberry.com/german-government-blackberry-z10 and http://bgr.com/2014/03/07/blackberry-z10-secusmart-voice-encryption/ regarding security.

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    katherinechen

    March 14, 2014 at 7:51 pm

  5. First of all “too little, too late” should just be too late because there is nothing too little about the Z30. Best Superphone on the market. They are still selling phones but make money off S/W (BES) and services. They have adjusted their cost structure to work within the current business model. They are the best in what they do at the core of the business so there is absolutely no reason to disappear as a company with a great core business

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    ronplaybook

    March 15, 2014 at 12:04 pm

  6. In the niche-market brand loyalty corner, please add in a healthy portion of Canadian nationalism. It won’t make the difference to the company’s ultimate survival, but there is a solid base of support locally.

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    tina

    March 15, 2014 at 1:25 pm

  7. Niche market: smartphones with real keyboards.

    Like

    Mikaila

    March 16, 2014 at 9:47 pm

  8. Mikaila,

    There are plenty of Android sliders (most of them under $150). I have one and I can type pretty fast on its 3″ QWERTY keyboard, a lot faster than I can on the virtual keypad of a 10″ tablet though not as fast as on a laptop.

    I’m thinking the real niche is certain IT environments. This will start to erode as workers demand to use phones similar to those they are used to and companies like Samsung offer enterprise phones that directly go after Blackberry’s core market.

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    gabrielrossman

    March 16, 2014 at 10:41 pm

  9. My understanding is that the only reason they are not dead is because of the security features on the phones that smartphones just do not have. I have a number of friends that work at say national research labs who are required to use blackberry phones for this very reason. Even Obama had to give up his I’phone for a Blackberry for this reason. Currently, I hang out with a lot of Samsung Electronics people because I teach gaggles of them in my various level of MBA classes here in Korea. They have had a horrible time making inroads into B2B market because of the lack of security features on the phones and have had trouble developing the right phones for the market. They also lack a knowledgeable and sophisticated enterprise sales/marketing team Turns out selling consumer electronics and enterprise solutions to big corporate customers is quite different – especially solutions that require integration with big, sophisticated IT systems. Remember Samsung is still primarily a hardware company. That have very little proven skill at software at any level. Apple also seemed content to ignore the security-sensitive corporate market until recently – entering only in mid-2012 (http://www.apple.com/iphone/business/it/security.html). Per Gabriel, it is an area both Apple and Samsung are ramping up to tackle but it turns out building those capabilities takes not only throwing money at the problem but time as well. From an org theory perspective, there seems to be something to the whole capabilities as hard to imitate competitive advantage thing. This has kept Blackberry solvent and on life support, but they are running out of time. I would speculate Apple is a bigger threat than Samsung precisely because they have software capabilities baked deep within the company and you need both in the enterprise security market.

    Like

    ryanhammond

    March 17, 2014 at 12:47 am


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