Few companies have ceded as much ground as BlackBerry, the beleaguered smartphone maker that reported an operating loss of nearly $1 billion on Friday. Its products used to be the best smartphones on the market. Then the iPhone came and changed the way people interact with their smartphones — and, through them, their lives — by introducing touchscreens and an apps marketplace that would eventually claim hundreds of thousands of applications.
BlackBerry, as we’ve written before, failed to promptly respond to the iPhone. (It’s not alone: Nokia did, too, and ended up selling to Microsoft for $7.2 billion — a fraction of the $250 billion it was worth just a few years ago.) But the company doesn’t simply suffer from perennial bad timing. It’s become an anachronism, a relic of a previous era whose attempts to modernize are met with as much resistance as its seeming willingness to pretend that nothing has changed.
Consider the BlackBerry Z10, the company’s flagship smartphone. The device is the first BlackBerry product to ship without a keyboard since the widely derided Storm product line and its hard-to-use touchscreens. BlackBerry was finally joining the rest of the industry by releasing a product that makes sense for a smartphone market characterized by touchscreens. Now it’s expected to take a $960 million writedown for unsold inventory of the device.
BlackBerry founder Mike Lazaridis anticipated a lukewarm reaction to the device, according to an investigative report from the Globe and Mail. The Z10 was essentially the same as every other touchscreen device on the market, and Lazaridis said that he understood a keyboard-equipped BlackBerry smartphone — but he didn’t understand the Z10 and where it was supposed to fit on the market. BlackBerry the company had come up against the legacy of BlackBerry the product, which built its empire on top of its signature keyboard.
Then there’s the relative dearth of quality apps available in the BlackBerry’s app store. This is a well-documented issue that affects every mobile operating system not named iOS or Android. Smartphone owners want to have access to the same applications their friends and family are using, and BlackBerry simply can’t deliver. Its attempts to bolster its offerings by emulating the Android operating system and allowing BlackBerry owners to use Android apps on their devices have also failed, largely because the experience is buggy, frustrating, and obviated by the fact that people could just go ahead and purchase an Android device.
Many people are choosing to do just that. This fiscal quarter saw the company’s rapid expansion in emerging markets reverse itself, and it’s because consumers in those nascent markets have more options than ever before. As the company says in a filing with the SEC:
The increase in competition encountered by [BlackBerry] in international markets is due to the recent entry into those markets of global competitors offering high end devices that compete with [our] BlackBerry 10 devices, as well as other competitors targeting those markets with lower end Android-based devices that compete with [our] lower cost devices. The decline can also be attributed to consumer preferences for devices with access to the broadest number of applications, such as those available in the iOS and Android environments.
This report comes almost eight months after the New York Times asked if smartphone owners were suffering from mobile app burnout. The iPhone — and, to a lesser extent, Android devices — now offers access to so many applications that the newspaper of record thought that consumers must be growing weary of it all. (The Times was wrong, but it’s the asking that matters.) Meanwhile, nearly eight months later, CNN Money claims that a lack of good apps would kill BlackBerry. One of these things is not like the other.
BlackBerry is caught in the past. It reigned over the smartphone market when the only things that mattered were a good keyboard and an email client, and its products always offered the best of both. Now that the market has expanded to include people who aren’t simply shopping for a “status-marker of both importance and exhaustion,” as the Guardian put it, BlackBerry has fallen behind.
The problem is that some people like the anachronism. Not everyone wants to use their smartphone as a glorified “Candy Crush Saga” machine. Some people dislike typing on touchscreens and prefer real, tactile keyboards. BlackBerry can’t simply abandon those customers, as it did with the Z10; it can’t remain in the past, either.
For as long as the company remains in operation, BlackBerry will be caught between two eras.
[Image courtesy Official BlackBerry Images]