Why BlackBerry’s Failing

The BlackBerry smartphone by Research in Motion (RIM) has long been a staple of government employees. Yet RIM’s recent quarterly earnings report suggests that the company is in financial trouble. The company just announced 5,000 layoffs and net sales that have fallen 42 percent over the year to $2.81 billion.

According to the Wall Street Journal’s Will Connor, the company’s failure to retain a respectable portion of the market has a lot to do with getting everything wrong about the future of phones. When faced with the decision to make an iPhone competitor, for example, RIM didn’t see that kind of smartphone as a real threat, predicting businesses and individuals would stick with the e-mail-centric device BlackBerry. Most telling of RIM’s inability to see in the future, the Canadian company kept this mentality even when multiple wireless carriers came to the hardware maker for an iPhone alternative. As Connor writes:

“In 2010, AT&T Inc., then Apple’s exclusive carrier partner, approached RIM about a plan to develop a touch-screen rival to the iPhone, said two former RIM executives. The chief of AT&T’s mobile division visited RIM’s research and development team in Waterloo to stress how important it was for AT&T to have a successful BlackBerry product to sell, according to people familiar with the visit. RIM said the objective of the visit was to develop ‘a differentiated, unique BlackBerry experience for AT&T customers.’”

RIM’s unpopular Torch was developed after AT&T, Verizon and Vodafone all came to RIM asking for a competitor. Beyond this misstep, RIM also ignored reports that said people were trending away from tactile keyboards and underestimated the trend of people bringing their own devices to work.

“I am not satisfied with these results and continue to work aggressively with all areas of the organization and the board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the Company on areas that have the greatest opportunities,” CEO Thorsten Heins has commented.

The BlackBerry smartphone by Research in Motion (RIM) has long been a staple of government employees. Yet RIM’s recent quarterly earnings report suggests that the company is in financial trouble. The company just announced 5,000 layoffs and net sales that have fallen 42 percent over the year to $2.81 billion.

According to the Wall Street Journal’s Will Connor, the company’s failure to retain a respectable portion of the market has a lot to do with getting everything wrong about the future of phones. When faced with the decision to make an iPhone competitor, for example, RIM didn’t see that kind of smartphone as a real threat, predicting businesses and individuals would stick with the e-mail-centric device BlackBerry. Most telling of RIM’s inability to see in the future, the Canadian company kept this mentality even when multiple wireless carriers came to the hardware maker for an iPhone alternative. As Connor writes:

“In 2010, AT&T Inc., then Apple’s exclusive carrier partner, approached RIM about a plan to develop a touch-screen rival to the iPhone, said two former RIM executives. The chief of AT&T’s mobile division visited RIM’s research and development team in Waterloo to stress how important it was for AT&T to have a successful BlackBerry product to sell, according to people familiar with the visit. RIM said the objective of the visit was to develop ‘a differentiated, unique BlackBerry experience for AT&T customers.’”

RIM’s unpopular Torch was developed after AT&T, Verizon and Vodafone all came to RIM asking for a competitor. Beyond this misstep, RIM also ignored reports that said people were trending away from tactile keyboards and underestimated the trend of people bringing their own devices to work.

“I am not satisfied with these results and continue to work aggressively with all areas of the organization and the board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the Company on areas that have the greatest opportunities,” CEO Thorsten Heins has commented.

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