Blackberry: What went wrong?
Canadian company Blackberry is to stop making phones after 14 years in the business. Blackberry used to be the first choice for business executives (it provided access to emails) but has lost out to competition from touch screen rivals Apple and Samsung.
John Chen, the company’s executive chairman and chief executive, said: “We are focusing on software development, including security and applications. The company plans to end all internal hardware development and will outsource that function to partners. This allows us to reduce capital requirements and enhance return on invested capital.”
The company now controls just 0.1 percent of the global smartphone market, after being extremely popular ten years ago. We chart their journey from rise to fall.
- A decade ago, Blackberrys were used heavily by corporate executives all over the world. Why? The company had developed encryption technology which made emails sent from a Blackberry completely secure
- They then hit the mass consumer market, and enjoyed success. Until…
- The launch of Apple iPhone and Android devices began to threaten Blackberry’s technological lead
- Blackberry made a loss of $372 million this year
- As a result of this loss, it is no longer profitable for Blackberry to develop its handsets in-house.
- Blackberry may go back to making new phones in the future, but if so, they will be designed by other companies
- The companies’ CFO, James Yersh, will be replaced by Steven Capelli, former Sybase executive
Read the September 2016 issue of Business Review USA & Canada magazine