Innovation Issue: Blackberry’s Lost Empire
RIM, renamed Blackberry, was once the market leader in smartphones. By 2014, it was on the verge of collapse. They had reported a staggering U.S. $965 million loss. This was largely due to its Z10 smartphone being a massive failure. The company was now poised to trim 4,500 jobs, equating to around 40 percent of its workforce.
To the beleaguered shareholders of Blackberry this was just another failure to build on the failures of the past. Since 2008, they had seen over U.S. $75 billion wiped off the value of the company. This was a business that had been at the forefront of smartphone technology, design, and innovation, now reduced to a company desperately fighting a losing battle against Apple and its other competitors.
Time after time, Blackberry had the chance to continue to dominate the smartphone market. Time after time, the board of directors had either terminated innovative projects or had disagreed with one another to such an extent that nothing happened. Back in 2007, just after the launch of the first iPhone,
Blackberry had been approached to create a touch screen smartphone. Their research and development had failed them. Verizon turned to Google and the Android was born.
In 2012, the board had clashed over Jim Balsillie’s (then co-CEO) plans to focus on instant messaging software. The scheme was violently opposed by Blackberry’s founder, Mike Lazaridis. The plan was terminated by the new CEO Thorsten Heins. In turn, Heins disagreed with Lazaridis about the continued focus on the keyboard rather than the smart screen. Heins opted for touch screen technology for the Z10.
Blackberry had earned its reputation and fortune by creating a smartphone for corporate clients. What the board failed to notice was that the real growth and innovation was in the consumer market. It was here that Apple was scoring with each successive development of the iPhone. It was also the consumer that was buying Android devices in steadily increasing numbers.
A potentially lucrative venture in the Chinese market was also shelved in 2013 because the Blackberry board had taken too long to make decisions. They had also left its Asian partners out of the loop.