BlackBerry goes private, but what next?

BlackBerry goes private, but what next?: Page 2 of 2

By Edwin Yapp October 1, 2013

Problems years in the making

The troubles facing Canada’s once-most iconic mobile player are going to get a lot worse before they get any better.

According to an extensive investigative report by Canada’s Globe and Mail newspaper, the company’s fall from grace did not happen overnight and is made up of a huge confluence of complex factors.

Some of these key factors, according to a 6,300-word article on the news daily, include the company’s complicated corporate structure of having two co-chief executives, which led to strategic decisions being delayed; a failure to respond to the rising tide of competition, namely Apple and Google; and missteps in choosing compatible engineering platforms (both hardware and software).

Other issues include the over-reliance on its BBM messaging services; failure to introduce the right products at the right time; and in the past year, disagreements between Blackberry founder Mike Lazaridis, and chief executive officer Thorsten Heins and his lieutenants.

According to one anecdote, Lazaridis was said to have derided the newer BlackBerry touchscreen smartphones, saying, “I get this. It’s clearly differentiated,” referring to the traditional, keyboard-based BlackBerry. Pointing to a [BlackBerry’s] latest touchscreen phone [Z10], he said, “I don’t get this.”

Lazaridis warned his fellow directors that to turn away from a product that had always done well with corporate customers, and focus on selling yet another all-touch smartphone in a market crowded with them, was a huge mistake, the story noted.

Meanwhile, other analysts and former employees interviewed in the report – some on record, others not – noted that BlackBerry had missed its chances to catch up with the competition very early on and had taken too long to react to market development vis-a-vis Apple, Samsung and others, in the smartphone arena.

“RIM found it difficult to make the transition," said Neeraj Monga, director of research with Veritas Investment Research Corp, referring to the name the company was originally known by, Research In Motion. “The company’s engineering culture had served it well when it delivered efficient, low-power devices to enterprise customers. But features that suited corporate chief information officers weren’t what appealed to the general public.”

Said one unnamed former insider, “The problem wasn’t that we stopped listening to customers. We believed we knew better what customers needed long-term than they did. Consumers would say, ‘I want a faster browser.’

He continued, “We might say, ‘You might think you want a faster browser, but you don’t want to pay overage on your bill.’ ‘Well, I want a super big very responsive touchscreen.’ ‘Well, you might think you want that, but you don’t want your phone to die at 2pm.’ “We would say, ‘We know better, and they’ll eventually figure it out’.”

BlackBerry goes private, but what next?: Page 2 of 2 Still, the combative Lazaridis (pic) wasn’t about to be beaten down and told the Globe and Mail he has not given up on the enterprise he founded 29 years ago.

A minority shareholder in the company, there is speculation and rumours that the 52-year-old, widely regarded as a true technical innovator in his day, may join a group to buy out his former company as he believes the BlackBerry story is not over, the newspaper added.

“Many companies go through cycles. Intel experienced it, IBM experienced it, Apple experienced it. Our job was to reinvent ourselves, which we all believed BB10 would do,” he told the newspaper.

“The fact that a Canadian company was able to compete in that space with two of the largest tech companies in the world is a big deal. People counted IBM, Apple and other companies out only to be proven wrong. I am rooting that they are wrong on BlackBerry as well.”

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