Goodbye, Consumers: BlackBerry’s Latest Death Spiral Spin

| Analysis

BlackBerry lost an ally in the United States on Thursday when T-Mobile revealed it won't sell the company's smartphones any more. The news follows BlackBerry's own announcement that it plans to stop offering consumer-oriented products to focus instead on the business market -- and it underscores the company's inability to compete in a market dominated by Apple's iPhone and Google Android-based smartphones.

BlackBerry bows out of consumer smartphone sales, holds on for enterprise marketBlackBerry bows out of consumer smartphone sales, holds on for enterprise market

T-Mobile's decision to back out of the BlackBerry space isn't a huge surprise, although it does come as a blow to the smartphone maker. T-Mobile's target market is primarily consumers, and without products from BlackBerry to fill that space it doesn't make sense stock devices that don't fit its customer's needs.

The news may also be a sign that carriers are losing faith in BlackBerry. The company, formerly known as RIM, was once the driving force in the smartphone market, but has bled away its dominance to Apple and Android while dealing with its own executive management issues.

BlackBerry also went on the hunt for a buyer in August and just this week received a potential US$4.7 billion deal from Fairfax Financial Holdings, which also happens to be the company's single largest share holder. So far, investors don't seem overly optimistic that BlackBerry will be able to make the deal come together, according to Reuters.

The once great BlackBerry is trying to find a new relevance for itself in the fast changing smartphone market, although so far it hasn't been overly successful. It's Playbook tablet fell flat, and its latest smartphones aren't gaining traction, leaving its services and patents as fallbacks.

Whether or not those are enough to keep the company alive is still up in the air. BlackBerry continues to post quarterly losses, can't seem to rebound from its marketshare loss, and continues to release products that fail to take off and sell in significant numbers.

BlackBerry's leadership was caught off guard when the iPhone came onto the scene. None of the big names at the time expected Apple to successfully break into a market they felt was already set, and they certainly weren't prepared to compete with the iPhone. Palm fell under the pressure of competition and its own mismanagement, later to become part of HP and ultimately fade away completely.

Nokia is selling its mobile business to Microsoft -- another big name in the cell phone business that hasn't been able to compete as successfully as it wanted. Microsoft plans to use Nokia as its own Windows smartphone platform, but there isn't any guarantee of success. That's a reality HP is well aware of since it wasn't able to gain a foothold in the smartphone and tablet market even with all of Palm's experience at its disposal.

With BlackBerry following in Palm and Nokia's footsteps, its future doesn't look very bright. If other cell service providers follow T-Mobile's lead, the company's future looks down right dismal. Without anyone to sell its products, it wouldn't matter how many smartphones BlackBerry makes.

The smartphone market, once dominated by BlackBerry and Palm, is a different world that belongs to Apple's iPhone and Google's Android OS. BlackBerry's glory days are behind it and should serve as a lesson to both Apple and Google: Never assume you're current success assures future success. There's always some company working to make the next market changing product.

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5 Comments Leave Your Own

vpndev

Also interesting in this space is the discussion about T-Mobile and Sprint combining.

It’s unclear whether this will come to pass, or when, but what is clear is that the mobile carrier market is still evolving, a lot. About the only thing that won’t happen is Verizon or AT&T acquiring either of them. Most everything else is on the table.

Of course, the GSM/CDMA split has reduced the amount of switching and competition but it seems that LTE may solve that. The next couple of years should be very interesting.

geoduck

I gotta wonder how they can compete in Enterprise Space when so many organizations are going to BYOD.

mrmwebmax

+

geoduck, agreed. Where I work there are nothing but iPhones and Androids, the latter mostly Samsung. I haven’t seen a BlackBerry in the wild in years.

adamC

The problem with Blackberry and Nokia is they are one trick pony that is they are only selling handsets and nothing else so when the bottom falls out they have nothing to fall back on.

I don’t know about google but as far as Apple is concerned they are ore than iPhones.

What else Apple will be doing your guess is as good as mine.

mrmwebmax

+

adamC:

I don’t know about google but as far as Apple is concerned they are (m)ore than iPhones.

While what you say about Apple is true, their iPhone sales alone top all other Apple products lumped together: iPad, Macs, you name it, iPhone eclipses then all. In fact, from a Businessweek article out today, this is how big iPhone is: Bigger than Microsoft, bigger than Amazon, bigger than most companies, period:

If this single product were its own company in the Standard & Poor’s 500-stock index, IPhone Inc. would outsell 474 of those companies—ranking between Wells Fargo (WFC) ($90.5 billion) and Marathon Petroleum (MPC) ($84.9 billion). The iPhone’s $88.4 billion in annualized revenue tops 21 of the 30 component companies in the Dow Jones industrial average—it would be the ninth-biggest stock in the Dow 30….

You can read the article here:

www.businessweek.com/articles/2013-09-25/listen-up-apple-haters-iphone-sales-eclipse-microsoft-and-amazon

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