Arthur Goldstuck

BlackBerry's long, slow suicide

IT is not often that a multinational organisation writes its own obituary. So the announcement last week that BlackBerry was appointing a committee to consider options for the sale of the business was, on the surface, startling.

But the reality underlying the consequent death notices that flooded the media is that CEO Thorsten Heins was merely formalising an option that had been on the table for some time.

BlackBerry’s balance sheet remains healthy, with close to $3-billion in the bank, but that is cold comfort for investors wanting to see a recovery in sales. The launch of the new BlackBerry 10 operating system at the end of January gave them a massive boost in confidence, but a series of missteps — masked by a string

Errors provide lessons in the technology market

of product launches — has dashed their hopes.

The biggest surprise is not that BlackBerry is now looking for a new strategy, but the sheer scale of strategic errors at the most critical time in its history. These errors, however, provide powerful lessons in the technology market.

The single biggest error came at the very moment of its apparent rebirth. On January 30 this year, when it held the world’s attention with the launch of BlackBerry 10, it all but committed suicide with one small technical detail. Or rather, lack of detail: the device would be launched in the world’s most important hitech market, the US, “sometime in March”.

That vagueness was masked, in turn, by the dramatic news that the first new phone would be available in the UK and United Arab Emirates that very week. But that news merely rubbed salt into the very deep BlackBerry wound in the US.

The obvious imperative for BlackBerry was to leverage the expected hype around the launch to the hilt. And that would have required them to have the phone available in the US at the moment of launch. The blame for that gap has been placed on negotiations with networks. However, BlackBerry had known for a long time that those negotiations would still be under way by the launch date. Delaying the launch for just six weeks would have seen a massive spike in sales.

Lesson 1, in the context of BlackBerry’s circumstances in the US: don’t launch what you haven’t got.

The first two BlackBerry 10 devices, the high-end Z10 and Q10, combined much of what had made BlackBerry great with what consumers demanded from the new world of apps and touchscreens. The Q10, in particular, immediately established itself as the best keyboard phone in the world. Sales were not stellar, but they weren’t disastrous.

In the developing world, however, the market was waiting eagerly for an entrylevel phone that would take the wildly popular Curve model into the BlackBerry 10 era.

Instead, in July, BlackBerry gave the world the Q5, a cheap version of the Q10, but at a price tag that has baffled the market: R5 000. The market is all but flooded with mid-range phones from Nokia, Huawei, Samsung and Sony that are more appealing than the Q5, at the same or better prices. The suspicion that the Z10 and Q10 were overpriced suddenly became a given.

Lesson 2, in the context of a sales crisis: If you’re going to surprise the market with the prices of new product, make it a pleasant surprise.

Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter on @art2gee