Unit 3 Micro: Will Blackberry Survive?

The global smartphone market is brutally competitive as the executives at struggling phone company Blackberry are finding out. Sales of their phones have been hugely disappointing for some time and the re-launch of their devices seems to have done little for Blackberry as they compete against Apple and Samsung, the dominant players in the industry.

It is tempting to think of Blackberry users in the same way we did of people who drove Skoda cars in the 1980s or who kept faith with Betamax video recorders long after the VHS format became the industry-standard. Although there are still over 70 million Blackberry users, as you can see from the chart below, Blackberry's market share of the global smartphone industry has declined rapidly in the last couple of years. It is hard to think of a way back for the brand. It's not really that Blackberry has outdated product features or a poorly-stocked app store. The issue, I think, is that Blackberry is no longer cool.

One statistic sums up the problems Blackberry is facing. In the first three months of 2013, Blackberry shipped 2.7 million handsets using their new operating system. Compare this the 37.4 million iPhones shipped by Apple over the same period.

Source: Financial Times

Against a backdrop of falling market share and widening losses, Blackberry has announced it is considering de-listing their shares on the stock market and instead going private. It will also look at other options to revive its fortunes, including potential joint ventures, alliances and strategic partnerships.

Blackberry does have some favourable factors - not least a $3 billion cash pile and - for the moment - nearly seventy million registered users.

There is also space in the mobile market for a third operating system to rival Apple’s iOS and Google’s Android which together account for more than 90 per cent of the global smartphone market. If Blackberry does effectively leave the market for consumer-focused hardware devices this creates a fresh opportunity for Nokia and their software partner Microsoft. Will Blackberry return to being largely the preserve of security conscious large businesses and institutions?

And one from the comedy archives!

Blog update:

BlackBerry is selling itself to investor group led by Fairfax Financial (September 2013) - shareholders will receive $9 in cash for each share

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