It looks like BlackBerry’s fall is almost complete.
A CAN$4.7 billion (£2.9 billion) takeover has fallen through after the company’s largest shareholder Fairfax failed to raise funding for the deal.
CEO Thorsten Heins, the man brought in to replace the company’s founders Mike Lazaridis and Jim Balsillie, is stepping down.
The company is looking to raise CAN$1 billion (£621 million) in financing but few analysts hold out much hope for its future.
If you wouldn’t lend money to buy Blackberry, why would you lend money to Blackberry?
— Benedict Evans (@BenedictEvans) November 4, 2013
The Blackberry platform itself is well on its way to becoming an irrelevance for publishers, but the media business can learn from its demise:
Pay attention to your infrastructure
One of the core reasons Blackberry kick-started the smartphone market, and became an invaluable tool for busy professionals, was that its data compression technology made it possible to carry out tasks such as email over slow and expensive data networks.
But as 3G and Wi-Fi hotspots became widespread and data prices fell, that USP became obsolete. As the likes of Apple and later Google took advantage of easier access to data to deliver richer, more data heavy media experiences, Blackberry’s more efficient interface design started to look archaic.
— Lesson: Firms such as Google and Apple provide publishers with their digital infrastructure. Tiny changes in Google’s search algorithms can make an article virtually invisible and tweaks to the Apple App Store can make sure your digital edition never gets in front of a consumer. Watch what they do, and what they are planning to do, carefully.
Digital consumers are fickle
In 2008, at the peak of Blackberry’s powers, Balsillie dismissed the threat of the iPhone saying: “Once you decide to become a BlackBerry user, you kind of stay there for life, and let’s not be too penny-wise, pound-foolish when we do get very good absolute margin.”
The arrogance of a company insisting that a product category invented a few years earlier was already commanding lifetime loyalty should not be understated. The “Crackberry” moniker went to Blackberry’s head, convincing the firm’s leaders that new products wouldn’t turn their customers heads.
The assumption that keyboards would trump touchscreens was based on what consumers were doing with Blackberries in 2007. Apple proved the smartphone could be much more than a mobile office, and turned the iPhone into a mainstream device that also captured Blackberry’s core customers.
— Lesson: Loyalty to your brand, however strong, can be quickly eroded when a better product comes along. Just because what you do now suits your customers perfectly now, doesn’t mean something else won’t redefine the market. In media, this is if anything a greater threat, as it’s a lot easier to switch from one digital title to another than it is to change mobile phone.
Blackberry’s woes can be traced back to the firm’s complacency and the assumption its leading position in the market was secure. That’s all it takes to take a company from dominant force to also ran in little more than half a decade.
Image via Flickr courtesy of MattHurst used under a Creative Commons licence.