Monday 16 October 2017

How once dominant BlackBerry withered so rapidly on the vine

Canadian firm agreed this week to be sold for $4.7bn, just five years after being valued at $82bn

High flyer: A Canadian flag waves in front of a Blackberry logo at the Blackberry campus in Waterloo
High flyer: A Canadian flag waves in front of a Blackberry logo at the Blackberry campus in Waterloo
BlackBerry user President Obama

Adrian Weckler Technology Editor

THIS week, BlackBerry was sold for a sum equivalent to a week and a half of Apple sales. The €3.8bn purchase price recorded was the latest chapter in the long, slow death of the Canadian firm that once dominated business communications.

In just five years, BlackBerry has lost 95pc of its value as millions of users turned away from its old-fashioned way of presenting smartphones.

This latest development – a €700m loss because of unsold stock and 4,500 job losses – are likely to herald the final blow to the once-great technology company.

How did BlackBerry – the brand once dubbed the 'Crackberry' because its followers found it so addictive – wither so completely on its vine?

Many analysts attribute a mixture of arrogance and conservatism, with the company ignoring consumer devices in favour of security-conscious business devices that ignored web and media.

By the time it finally got around to launching a modern smartphone in January of this year, its opportunity had all but gone. Even its celebrity 'brand ambassador', singer Alicia Keys, was caught secretly tweeting from an iPhone– an incident she later blamed on hackers.

A February roadshow by BlackBerry in Ireland summed up the company's doomed efforts. The firm's managing director for Ireland and the UK, Robert Orr, was dispatched to try and convince businesses and industry that BlackBerry was back. Mr Orr told journalists that the company was being enthusiastically received by big business and was converting users from Android devices and iPhones.

"This is just the beginning," he said. "A lot of people didn't think we could do what we have done."

Within three months, Mr Orr resigned from the company after a minimal uplift in sales.

BlackBerry is not entirely without remaining devotees. The British Prime Minister, David Cameron, was spotted using one last week at the wedding of his sister-in-law.

US politicians also use it because of security protocols – although US President Barack Obama, for long BlackBerry's most high-profile fan, seems to have cooled on the company.

The Blackberry is still said to be Mr Obama's phone of choice. He was using one during his inauguration in January. However, even the US president is understood to prefers using an iPad for security briefings.

In Ireland, the newly-appointed chief information officer, Bill McCluggage, told this newspaper that he would not rule out deploying the smartphone in government departments.

"I'm not ruling any system out," he said last month. "We need to see what the individual requirements are in each case. Quite significant organisations I come across are still using BlackBerrys. So from my perspective, I can't rule it out. Even though I haven't used a BlackBerry myself for over a year."

However, the figures show that business users are abandoning BlackBerry handsets in favour of iPhones, Samsungs, HTCs and other smartphone systems. Recent global figures from research analysts IDC put the number of BlackBerry devices in use at around 3pc, a fraction of the number sold by market leaders Apple or Samsung.

Five years ago, the same firm reported BlackBerry had 45pc of the market.

The company will now struggle to rebuild any significant user base, with apps developers having largely abandoned BlackBerry's app infrastructure (although the company has made it easier to port apps from the rival Android operating system).

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