Blackberry is set to outsource its phone business – a move that demonstrates perfectly how technology can disrupt and even tear apart, the once mighty.
Apple made lots of errors with the launch of its iPhone. For one thing, it ignored all the research saying users wanted a keyboard, as a result it missed the vital business market. The product also demanded an awful lot of usage of bandwidth, the telco companies were not able to cope, available bandwidth was just insufficient. As a result, the product died, and Blackberry (RIM) went on to become the world’s biggest company. At least that is what might have happened in a parallel universe.
But ‘if you ask people what they want, they say faster horses’ as Henry Ford didn’t say. It is one of those misquotes, but Ford did say something similar, and Steve Jobs used to say that is what Ford said. Maybe it matters not whether he said it, the meaning is apt.
So Ford ignored research to say people wanted faster horses and gave them the Model T. The BBC ignored research to say no one wanted to see the return of an outdated science fiction series famous for its wooden sets and brought back Doctor Who anyway, and to much success worldwide. Apple ignored advice that no one wanted a touchscreen phone and launched anyway. And in this universe went on to become the world’s biggest company.
The belief that the iPhone would never appeal to business users, turned out to be as inaccurate as the view ten years or so earlier, that EasyJet would never be used by business travellers.
As for the view that there was not enough bandwidth out there, maybe Blackberry overlooked the exclusive deal Apple did with AT&T, who were given this massive incentive to ramp up their service. Maybe Blackberry overlooked Butters Law of Photonics, that says the amount of data coming out of a fibre optic cable doubles ever nine months. Sure, the iPhone did not pull data from fibre optics directly, but it did indirectly.
And now Blackberry, or crackberry as it was once called, the one-time phone of choice for Barack Obama, is no longer making phones. It is going to outsource that task to others, who will pay it a licensing fee – for example in Indonesia.
Instead, Blackberry is to focus on software and business services “We are at an inflection point,” said its CEO John Chen.
He then talked about how the company’s pivot to software is strong.
And so it is, software sales have been rising fast, the decision makes a lot of sense, and new shareholders in the company may have a reason to celebrate. But this is a company that has seen its share price fall from a peak of almost $140 in 2008 to just $8.33 today. This is a company haunted by past success.
Still, considering what happened to it, the very act of surviving was itself pretty impressive.