Background of Data Communication Business of BlackBerry:
Mobile Data Communication was an excellent business idea. BlackBerry started in 1999 as two way paging device. It looked more like a pictorial portmanteau between a calculator and a keyboard. Capability to exchange text messages soon ripen into other things.
Problems of BlackBerry
At that time Data Services for phone were a rare treat. Many other smartphones like Nokia Communicator had to engage third party applications like RoadRunner to provide mail but blackberry had complete integrated solution syncing everything to its server. In fact its phones were also sleek and easy to handle with one hand.
Enter the New Millennium and things started to change.
Blackberry continued to engage into revenue sharing agreements with virtually all the network providers all over the world. Now nobody could avail data services on Blackberry phone without paying monthly booty. It made windfall profits. Rumour has it that top executives squandered it upon itself instead of investing it in Research. But that is rumour. The fact is that some of Directors did ante-date some documents to appropriate shares of the company below market price and were caught. They ended up paying millions in penalty to the Government.
The wind of change started to blow in year 2005 when several companies started to offer data sync services. The big blow was when Google offered IMAP mail synch and calender/phone book synch for free for Gmail account holders. Initially it was for Iphone. Soon yahoo and hotmail followed.
Now Blackberry was to compete with free service but it was so confident with its corporate clientage that it did nothing except offering some freebies.
The final jolt was from android.
Blackberry now realised that the space where it may expand was already filled. Most of it’s Corporate Clients still intact, it misunderstood the problem as that of growth. BB brought out cheaper devices and shifted focus to third world. It joined hands with its deadly enemy Google to provide apps to work without BIS. It worked in short time. Revenue decline was arrested but profits fell. Now it is targeting housewives to buy BB.
To borrow a swedish saying from a Nokia Executive (said in different context) ‘BB chose to pea in pant to keep it warm but it did not work in long term.
Now upto 50 GB free cloud space is offered to consumers. Android offers free synch for everything. Why would an individual pay for service which is for free? Worst of all, three days disruption of BB services, last year, took away its last bolt i.e. reliability.
As a phone it is OK but it is not a multimedia device like Iphone or a mini computer like Android.
It must understand that if it intends to expand rather retain its market share it must acknowledge that it can not extract money by hood winking consumer. It must acknowledge that it is marketing distinct services besides its hardware and it is no more in monopolistic position to force everything upon a consumer.
At times past success is a big burden. Now BB is completely an in-house solution company except for apps, where lies its worst failure. It must realise that its strength lies in the fact that it is capable of expanding in more ways then selling phones like other hardware manufacturers.
Bald criticism smacks arrogance, therefore a positive step by step
Therefore it would be prudent for it to segregate its business in following compartments/departments with individual marketing study for each:
2. Enterprise Server (BES)
3. Internet Services (BIS)
4. Messaging service (BBM)
Same software for different hardware is no good. It’s ill effect can be seen on playbook which had a similar software. Multiple OS is a good strategy. No harm in having an android blackberry if it can sell. Businesses are run on numbers not ego.
Enterprise Server (BES)
It is a good Model but it is overloaded due to BBM. It must be revamped to gain confidence of corporate consumers. Scope exist to target SOHO sector.
Internet Services (BIS)
The Internet Services (BIS) should be discontinued as it is a piggy back ride on network provider or it should be free or at a nominal cost i.e. Half the price of minimum data plan. A consumer buying $200 phone would not spend $20 a month on phone bill, regularly. It is an eternal truth.
Messaging service (BBM)
Presently it is packaged alongwith BES and BIS. It should be separated and offered as a separate service. It is possible that it may be bundled as free with BES, at concessional price with BIS and separately for others. It can also be sold separately as an app for other handsets as well. A separate series of PIN can be generated for it.
In smartphone industry there is a vacuum of good OS. See the Nokia disseminated from market and Samsung almost married to Android. BB may start selling its OS to such manufacturers. After all it shall be more profitable than selling cheap phones.
Apps is the most important aspect. While app market of android and iphone are filled with Millions of apps, OS-7 would have hardly more than ten thousand. People need more apps so that they may wander or pass time. So give it to them.
Apart from the apps for BB OS, efforts must be made to make apps for other phones to integrate BB services on other phones.
To carry out above changes the company would be required to be administratively segregated into atleast three divisions which would create power struggle hence would not be implemented.
Last but not the least, a letter of thanks to this humble blogger, though there is no such tradition in Corporate World.
Ships do not sink just because of weather. Similarly firing a Captain of sinking ship does not brighten chances of its survival.
© Sandeep Bhalla