BlackBerry has been all but buried by its competition. Once a company that paved the way for the smartphone industry, it now appears left behind in the technological dust. Just this week, BlackBerry--which recently changed its name from Research in Motion--revealed it is considering "strategic alternatives." That opens the door for selling itself, either as a whole or perhaps in pieces. So, how did an innovation giant turn into a dinosaur? Hot Stock Minute host Lauren Lyster and Yahoo! Finance Senior Columnist discuss BlackBerry's biggest blunders in the video above. The mistakes include the three items below.
1.) Resisted Shift to Touchscreen Devices: The company ignored the sweeping migration away from "qwerty" keyboards. "BlackBerry sort of held off," explains Santoli. He says the company thought it had a lock on corporate accounts, and figured that would be enough to keep the business churning. BlackBerry stock was just shy of $67 a share when the iPhone was introduced on June 29th, 2007. It has currently been trading under $11. Santoli says that by the time BlackBerry realized its missteps, "they did not move fast enough to have a competitive product." BlackBerry's revenue has cratered as innovation has faltered. BlackBerry's revenue for fiscal year 2012 was $11 billion, down 45% since 2010.
2.) Failed on the App Frontier: Apple and Android devices makers invited app designers to build programs for their handsets. Not so with BlackBerry. "They wanted to kind of own the whole process," explains Santoli. That has wound up costing the company dearly. A major complaint about BlackBerry devices in a lack of apps. Meanwhile, Apple's app store has become a cash cow. Last year revenues topped $9-billion. By 2016 the site could generate $22-billion annually.
3.) Took Customer Loyalty for Granted: "People wanted the better product, not just one that said BlackBerry on it," explains Santoli. He says the company erred in believing it had an unbreakable stronghold on corporate email-- one which theoretically assured the BlackBerry would remain the default device of choice. In 2008 BlackBerry owned 45% of the US smartphone market. Research firm Gartner says BlackBerry currently has only a 2.7% share down from 5.2% one year ago. Android phones are far and away the leader with a 79% share and Apple is in second with 14.2%. Blackberry was able to hold on to customers for a time even after the iPhone and Android phones debuted, but since 2011 things have fallen off a cliff. At its peak, in 2011, Blackberry shipped more than 52 million phones. In 2012, that dropped by almost 20 million units to 33 million units. Meanwhile, Apple shipped more than 135 million iPhones and Samsung and other manufacturers sold more than 452 million Android units.
BlackBerry stock has not performed all that badly in 2013 considering the prospects for the company. Shares are down 7% since the start of the year. However, they are a tiny fraction of their all-time high above $140 back in 2008. At that time the company had a stock market value above $80-billion. Today when you add up all the shares, they're worth less than $6-billion.
- Technology & Electronics
- Handheld & Connected Devices