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?
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.
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!