The Rise and Fall of the “Crackberry” sensation: What Went Wrong?

The tech world is constantly abuzz with news about mobile phone carriers and the newest thing. Customers of Apple and Samsung wait hours in line just to be one of the first new iPhone or Galaxy owner. While carriers such as Apple and Samsung are thriving and new companies are trying to grab some market share, why is Research in Motion struggling to stay afloat? In 2008, Research in Motion had a record high of approximately $144 per share. Today, the price of the stock is barely pushing $14. So what is the reason for this dramatic decrease and what exactly is RIM doing about this?

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In 1996, RIM had the advantage in the industry as it was the first to come out with the wireless handheld, the Inter@ctive Pager. Although RIM was extremely profitable during the early 2000’s, starting in about 2010, they began to have some major hiccups. Many of their products received less than stellar reviews and resulted in poor sales. The PlayBook, Blackberry’s attack on the iPad, did not do nearly well as expected and as a result, RIM ended up cutting about 10% of its employees. In 2011, RIM experienced a three day service interruption that left 70 million customers infuriated with the company. 

Blackberry customers had a strong loyal following that consisted of mostly businessmen and women and teens. The email service and BBM messaging attracted these customers. At the time, teens flocked to get their new blackberry in order to BBM with their friends. However, BBM wasn’t enough to keep them as customers. As Apple, Google and Samsung came out with newer more original features as well as improving their app stores and social media connections, the Blackberry failed to make the transition. The Blackberry was no longer rare or valuable which caused many people to ditch their “Crackberries” for the newer “smarter” smartphones. The Blackberry became a substitute and was no longer the top player in the smartphone race, instead their market share drastically dropped.

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Today, the mobile device market is one of the most competitive out there. Because of this, Blackberry is not giving up just yet. In the past month, they released their newest smartphone, the Z10 and plan to launch their Q10 soon. Their new strategy of bombarding the market with new gadgets may be their last chance to scoop up new customers and try and hold on to the remaining loyal fans. The case of the rise and fall of Blackberry is very similar to the demise of Blockbuster. RIM was once the “fastest growing company” according to Forbes, but just could not hold onto their market share as companies such as Apple came in with newer more innovative products. If Blackberry wants to survive they are going to have to make their products and company more valuable and non-substitutable to their customers. No one is going to keep their Blackberry to BBM their friends if all of their friends have iPhones. 

Check out this Wall Street Journal article to see what the experts think about the future of Blackberry!

 

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8 thoughts on “The Rise and Fall of the “Crackberry” sensation: What Went Wrong?

  1. Blackberry is a prime example of a firm being too complacent in the Tech industry. Because of their dominance, they were not prepared to tackle the challenges of the smartphone. Rather than innovation, Research In Motion decides initially to stay put and do what it does best. This is the problem people believe Apple might be having. With the death of the “great one”, Steve Jobs, Apple seems to be out of ideas. Their latest gadget, the Ipad mini, is merely just a smaller Ipad or a bigger Iphone. It may be interesting to see the battle between Apple, Google and RIM.

  2. Good blog post! The graph is a good added feature because it helps me visualize just how badly Blackberry is doing. I think this related to what Professor Kane discussed about Dell. Dell used to be popular in the past because it was customizable however, now, since all laptops have features far beyond basic needs there is no need for customizing. Blackberry is going through the same scenario because BBM was once a valuable tool for business people, but now all smartphones have similar applications such as iMessage, which makes Blackberries substitutable. I agree with George Yang about Blackberry being too complacent in the industry. They basically thought that business people would be loyal to Blackberries which is definitely not true. My friend actually just bought an iPhone because she couldn’t stand her “crack berry” anymore. Rather than moving with the trend towards touch screen, blackberries kept their keyboard and by keeping the keyboard, the screen size is half the size of their competition and what is trending now is bigger phones. Blackberry also cannot compete with the number of applications on the Android or IOS platform which makes it less of a well rounded phone. I think the release of the Z10 marks a new beginning for blackberry, however I wonder if it is too late. (maybe the Onion will do a parody of blackberry in the future..)

  3. I think this is a very interesting post because we were all part of the blackberry sensation and definitely had a lot of friends who used BBM before anything like iMessage came out. It really does show that blackberry was a bit complacent and perhaps thought that because they were the first creators of this type of popular phone messaging system that their success was stable. Although it was a great system for a while, people started switching which is maybe because they didnt adapt/create a difficulty to switch like netflix did. BBM and this technology was easily reconstructed and competitors quickly swooped in with better products and improvements on this technology. I really liked this post and though it was very relevant to our generation as well as what we have been covering lately in class.

  4. I found this article to be very informative and interesting. Although I have had a smart phone for a long time, I have never actually had a Blackberry however I can definitely say that I am very familiar with the Crackberry sensation. Many of my close friends have had many Blackberry’s and been thoroughly addicted. When I first heard that Blackberry was releasing the new Z10, I didn’t think that it would be very impressive or take back any of its lost market share, however I watched this youtube video https://www.youtube.com/watch?v=EMiTDrJNt6E and was very impressed. Personally, I think Blackberry’s have always been more user-friendly for business-focused people however they haven’t been as fun or interactive to use as iPhones and Galaxy’s. Despite Blackberry’s best efforts to grab back some of the market share, I don’t know if they will be able to outdo Apple and become the force that they once were.

  5. I loved reading this post and this is something I have often wondered myself. Just a few short years ago, a Blackberry was the thing to have. Now, it fairly rare to find a friend still owning a Blackberry. I liked how you tied class material into your post, mentioning that the Blackberry soon became a substitute for smart phones. Your blog mentioned that the Blackberry went out of style as new, more innovative phones were released. In my opinion, the success of a company (particularly when it comes to mobile devices) can be attributed to both technology/ product quality, as well as herd mentality. Particularly for “crackberries” I think a lot of it had to do with the fact that this was the “cool” thing to have (i.e. most of your peers had a Blackberry). I really enjoyed reading this article and I am curious to see what will be the crackberry of the future. Maybe one day a Research in Motion product will be back.

  6. Awesome post, Courtney! This is actually a topic that is thrown in all of our faces every day, but is never really discussed seeing as now it is such common ground for someone to have an iPhone nowadays. I think this post was actually very interesting. I have actually read a lot about how poorly blackberry and RIM have been doing, but had never really learned the background of the company. I find it so odd that companies that expand too quickly are always the ones to die out in the long run. Perhaps they cannot maintain the rate of growth and keep up with the trends of the market all at once, while trying to please the customer as well. The phones that blackberry has been releasing as their new models have looked inferior to the other smart phones on the market, and they seem to be way behind on the demand of the market, in terms of what the customer wants. I wonder what the companies strong suit (Gap’s brand, Zara’s business model) was and how they allowed themselves to fall so rapidly. I really do think that unless RIM can come up with some revolutionary software, or blackberry can produce the next best looking thing in the smart phone world then they are done for. Great job on the blog.

  7. Nice post! I enjoyed reading this overview of RIMM. RIMM’s rise and fall (Palm is another good example) certainly emphasizes the “sustainable” in “sustainable competitive advantage”. Innovation-centric companies cannot simply sit on their laurels and let product development react to present customer trends. Successful companies will wisely bet on future consumer trends that show promise.

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