Is the Crackberry now toast?

Reports of the death of the Blackberry and its producer, Research in Motion (RIM) may be premature, but it’s hard to argue that the vultures seem to be circling. After controlling nearly half of the market share as recently as 2009, they accounted for only 10% of sales in 2011. Their stock is down to one quarter of the value it once held and they’ve had to make big changes in upper management. So what happened which led the company’s premiere product to transform from a mystically addictive must-have (we all called it the “crackberry”) to an also ran? At the New Yorker’s financial pages, James Surowiecki thinks it’s a fairly simple explanation. RIM was run over by Apple’s superior understanding of the market.

The easy explanation for what happened to R.I.M. is that, like so many other companies, it got run over by Apple. But the real problem is that the technology world changed, and R.I.M. didn’t. The BlackBerry was designed for businesses. Its true customers weren’t its users but the people who run corporate information-technology departments. The BlackBerry gave them what they wanted most: reliability and security. It was a closed system, running on its own network. The phone’s settings couldn’t easily be tinkered with by ordinary users. So businesses loved it, and R.I.M.’s assumption was that, once companies embraced the technology, consumers would, too…

In this new era, technological diffusion started to flow the other way—from consumers to businesses. Social media went from being an annoying fad to an unavoidable part of the way many businesses work. Tablets, which many initially thought were just underpowered laptops, soon became common among salesmen, hospital staffs, and retailers. So, too, with the iPhone and Androids. They’ve always been targeted at consumers, and tend to come with stuff that I.T. departments hate, like all those extraneous apps. Yet, because employees love them, businesses have adapted (and the iPhone and Androids have upgraded security to make themselves more business-friendly). As a result, the iPhone and Androids now control more than half the corporate mobile market.

This story is very similar to the computer market and the long time battle of IBM vs. the world. Of course, they did much better in that battle over the long run and held on a lot longer. The common theme was, “do you want a toy or do you want to be able to do business?” And until computers came down in price to the point where they were truly ubiquitous among young, newer users, the business market carried IBM along nicely. Unfortunately, everyone was already used to the idea of having a phone and, as the author notes, Apple was just better at anticipating and delivering what the user on the street wanted. RIM took forever to come out with a touch screen after the iPhone did, and when they finally released one it was a pale comparison to the competition. That didn’t provide much incentive for people to come back.

I loved my Blackberry during the last congressional campaign, with more than one person telling me that I was locked into it far too often. I haven’t gone to a Droid or an iPhone yet, but if I do upgrade this year or next, I’m sorry to say there’s a good chance I’ll be following the herd. I just hope you can still get a physical keyboard. I don’t like tapping on a screen.

Oh… and get off my lawn.

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