BlackBerry makes all the right moves at all the wrong times

By Fritz Nelson , written on August 13, 2013

From The News Desk

If you're BlackBerry, you know you've hit rock bottom when people are rooting for Microsoft Windows Phone to take you down. The company has tried everything short of getting Jeff Bezos to acquire it, and now it appears that even that is on the table.

After owning more than 40 percent of the US smartphone market as late as 2010, it is now clutching desperately to 5 percent share by almost every analyst measure. The latest data shows that Windows Phone OS has overtaken the BlackBerry mobile OS, although if we’re completely honest, these are scraps that Microsoft and BlackBerry are fighting over.

Scratch that: You know you've hit rock bottom when even Symbian can see you in its crosshairs.

In 2007, Research In Motion’s stock almost reached $230 per share. Today it hovers between $10 and $11. Five years ago, the company’s market cap was at $72 billion. Today, it’s $5.65 billion. The only way things could be worse is if Anthony Weiner had been using a BlackBerry.

At every point in the past two years, BlackBerry has been at least a year behind where it should have been, and that’s probably being kind.

It needed a new CEO in early 2011, when it became apparent that the BlackBerry Playbook would flop. To get email on the Playbook, you had to run BlackBerry Bridge on a BlackBerry smartphone, which was a bit like saying that in order to get water in your shower, you had to first be running the water in your sink.

BlackBerry tried to sell BlackBerry Bridge as a security "feature" of the product. The company was full of such self-delusion. I'll never forget asking a RIM executive years ago about the company's plans for a touch experience, and then watching as he demonstrated how the BlackBerry trackpad was sort of like touch interface, at which point I ended the meeting; I should have ordered him a straitjacket.

RIM needed a new CEO in late 2011, when it suffered a three-day global outage of its supposedly impenetrable service. The company hasn't suffered a similar outage since, for all the wrong reasons. It became a convenient excuse for many of its long time customers to flee.

The company waited until January 2012 to insert Thorsten Heins, its product chief and COO, as the new CEO. But even then the company let Mike Laziridis and Jim Balsillie run the halls at Waterloo, staying on as directors until Balsillie had the decency to leave two months later; Laziridis, God bless him, stayed until this past May.

History will show that RIM made all of the hard choices, revamping its entire product line around QNX, an embedded OS known for powering automotive control systems, acquired from Harman International in 2010 for $200 million. BlackBerry 10 was a more stable, modern, touch-based mobile platform, with a better Web browser and functionality reminiscent of some of the best features of Palm OS, and with a few added navigational flairs to boot (Peek and Flow, and a fully integrated inbox).

Unfortunately, the first devices to run BlackBerry 10 (the Z10 and Q10) arrived only this Spring. They are excellent compared with what came before, even holding their own against other modern smart phones, save for one tedious little fact: They were probably two years too late.

RIM didn't give up. It changed the company name to BlackBerry, announced BlackBerry Messenger (BBM) will run on the iPhone and on Android, figured out a way to run Android apps on BlackBerry 10, and hired Alicia Keys as a spokesperson, an apt choice given that Beyonce was the more modern option.

Even though the addictive BlackBerry keyboard was considered by users to be the original device's winning function, BlackBerry's crown jewel was always BlackBerry Enterprise Server (BES), the mobile management system to end all mobile management discussions. For corporations, and especially highly regulated organizations, BES was the shit: secure, fast, and compliant (put together any three letters of the alphabet and you can be reasonably sure they are among the BES checklist items).

BES includes some 500 or so policies that managers can set to control every last little detail on every last little phone, like when and where the phone’s camera can be used. That's what IT loved about the BlackBerry, and still does. Even today, it's the gold standard.

This worked well when corporations were all-BlackBerry all the time, back when that BlackBerry market cap was hovering in the $70 billion range. But for much too long RIM buried its head in the sand and pretended the iPhones and Android phones didn't exist.

Yet even here BlackBerrry eventually evolved, acquiring Ubitexx in 2011 to help manage those Android and iOS devices. In the newest version of BES, enterprise IT can manage BlackBerry 10, older BlackBerry phones, and iOS and Android phones, all from the BES console. But out of the gate, BlackBerry 10 devices can only be managed from a BES 10 server. (BES is free; BlackBerry only charges for each phone connected, so each of those iPhones that companies connect to BES 10 rings a toll in BlackBerry’s favor.)

BlackBerry Balance, a nifty feature that lets BlackBerry users keep personal apps and data segregated from work apps and data was redesigned in BlackBerry 10. With a swipe, users can switch between those work and personal modes. Unfortunately Balance doesn’t yet apply to iOS and Android. That will come, as always, too late to matter much.

And now, in spite of these efforts, the company has reached the conclusion it should have come to more than a year ago: BlackBerry needs a rescue. It has apparently considered going private, it has said it was open to licensing its technology, and now BlackBerry's board of directors has launched a "special committee" to make the necessary arrangements, or, in kinder words, explore the company's strategic options. A tragic ending to a colossal downfall that surely will be studied in business schools for decades.

BlackBerry should consider selling its assets to a single buyer. The technology (the phones, the OS, BES) will be difficult to split up and sell off. Everything is so inextricably linked (something BlackBerry management boasted of) it doesn’t make much sense to unravel it all. There's very little magic still left in mobile hardware anyway. Instead, the mobile battle will be won by those who own the mobile personal cloud, and all of the services tied to it (for Apple, iOS, iCloud, iTunes, Siri, Passbook, Maps; for Google, Android, Google Now, Google Maps, Go). BlackBerry simply doesn't have an ecosystem to speak of, no matter how good its phones are, or how innovative its OS is.

But there are companies that could make something of what BlackBerry offers, chief among them Amazon, which has its own media, cloud and commerce engines, and is just missing a smartphone. Or Dell, which could ostensibly take two wounded companies private at one time. Or HP, but it’s questionable whether that company could survive another risky mobile run, and besides, Leo Apotheker isn’t around to overpay for it. How about VMware, which just hired SAP’s mobile chief Sanjay Poonen, and seems very interested in managing mobile user experience. For VMware, perhaps only BES would be attractive.

Perhaps the most promising asset in BlackBerry’s arsenal is QNX, the embedded real time OS, which powers not just BlackBerry phones, or cars, but also medical devices, like the ones that monitor your health. In a world that will soon be filled with billions of sensors, something must empower them, and something must manage the secure flow of data. Sounds like something in BlackBerry’s wheelhouse. Maybe companies like Cisco or IBM, both of whom are betting substantial capital on an Internet of Things, would see the value BlackBerry brings with QNX.

Look for it... in 2015.

[Image Credit: Sushicam on Flickr]