24 April 2014 ~ 0 Comments

#1: Microsoft buys Nokia

We’ve been working on a recap of the biggest stories in mobile and tech from last year. With our good friend Scottie Ladeaux we’re going to bring you a new post looking back on our picks from 2013 every Thursday.

We got there! This is the final instalment of a ten part video series looking back at the year 2013 in mobile and tech. And the long-awaited #1 biggest story in tech from the whole of last year is the news of Microsoft completely buying out struggling Nokia’s Mobile Phones Division.

We talk about the history of Nokia and what this acquisition means for them as well as the whole future of the battle between various smartphone operating systems. We also question the role of Stephen Elop in the relationship between Microsoft and Nokia.

It wasn’t a complete surprise to everyone, but this news shook up the entire business world and is sure to play a huge role in shaping the future of smartphones and mobile tech in general.

Nokia may have been in the business since the ’70s and produced the first handheld mobile ever but soon after the first smartphones came out they’ve been in decline. The Finnish company were the world’s biggest handset manufacturer for fourteen years but in 2012 Samsung emphatically replaced them.

Despite a massive marketing budget and lucrative royalty-sharing deals, their Windows Phone mobiles make up fewer than 5% of smartphones sold and Nokia have forced through a massive savings strategy. But even with 15,000 redundancies, they have been haemorrhaging cash and their revenues crashed from over €7 billion to just under €3 billion in the second quarter of 2013.

Nokia had been all but written off until September last year when Microsoft announced they’d be acquiring the whole company in a massive £4.6 billion (or $7.2 billion) deal. Microsoft also agreed to invest an additional €1.5 billion in financing to help with the Finnish company’s cash flow woes and debt issues.

It’s an industry open secret that, unlike other rival manufacturers, Nokia chose not to partner with Android when it first came out as they feared they would not survive the competition of Google’s market. Instead their plan was to join Microsoft and aim to control a whole vertical with their phones being manufactured from Nokia components rather than off-the-shelf parts. But nobody predicted they’d end up being owned by them.

This shakes up the entire smart phone market. Now, there really are only three big players left – Apple’s iOS, Google’s Android and Microsoft’s with Windows Phone. Previously, BlackBerry had also been in the running but with Microsoft choosing Nokia over them, it’s hard to see a place for BlackBerry in the future of smart phones. Especially since their revenues have also plummeted in recent years and due to their internal issues which we discussed in video #5 in this countdown.

However, some saw a conspiracy in the demise of Nokia. Stephen Elop was the head of Microsoft’s Business Division for two and a half years before he took over as Nokia’s CEO in September 2010. This was the first time that Nokia had a non-Finnish director and he received a $6 million golden handshake.

Elop’s reign at Nokia was fraught with controversy. It was under his leadership that Nokia’s internally-developed operating systems – Symbian and Meego – were in favour of Microsoft’s OS. He also deriding the company in public statements and some suspected him to be a Trojan horse-style saboteur destroying them from the inside.

The fact that Nokia’s market cap has plummeted over the last few years. has meant that it’s ripe for the picking and Microsoft were able to snatch up a bargain compared to a few years ago. There were rumours that Microsoft would try to buy Nokia ever since he was appointed and as part of the deal Elop will now return to Microsoft as head of their Devices team. But

Regardless, this acquisition will be remembered a major event in the history of mobile phones. Microsoft has been struggling to keep up as a technology company in the age of mobile and if they want to salvage any of the success they’ve retained since the ’90s it’s in many ways an entirely necessary gamble.

Still, the duopoly of Android and iOS seems incredibly solid at the moment and it’s hard to see how they can chip away at their market share. However, it is clear that they are willing to spend and do whatever it takes to have a chance to be one of the major players in this business. The strategy has been failing so far, so it’s hard to see how ploughing even more money in can make a drastic difference. But it certainly makes things much more interesting for the next few years and it can only be good for consumers to have more competition and innovation.

What did you think of this series? Do you reckon we covered all the major stories in tech and mobile from last year or we there some that we omitted? And what’s your take on the Microsoft-Nokia deal? Could Elop really have been a plant devised to produce a preferential price?

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30 October 2013 ~ 0 Comments

The end of BlackBerry (part 2)


Continuing on from our previous article, we take an insider’s look at the strategic decisions inside BlackBerry that have ultimately led to its downfall over the last few years. Last time, we wrote about how, soon after the iPhone came out, there was a lot of confusion in the company about how their hardware design should proceed and many advocated producing touchscreen smartphones. Meanwhile, others were obsessed with sticking to BlackBerry’s formula of phones with physical-ketybaords that had served them so well in the beginning.

A major decision BlackBerry made around this time was to acquire the Canadian company Quantum Software Systems in 2010. They wanted to use their Unix-like QNX operating system in the playbook and later in the BlackBerry 10 software. However, many now see this as a major mistake:

Claiming QNX is a “cutting edge” software company is ridiculous. They brought their own set of hubris, their own attitudes and (severely antiquated) practices. QNX infected BlackBerry at many levels

It has been said that the QNX developers lacked the technical know-how to do was required at BlackBerry. Ex-employees at the company even claim that because of this acquisition, the product elegant team was infested with sub-par talent and incompetent engineers.

By 2013, it was soon clear that the QNX experiment and BlackBerry 10 as a project had been a major disappointment if not an outright failure.

In the previous years, within the company, co-CEO Jim Balsillie had been arguing for significant change in direction to try and rescue BlackBerry from the ever-nearer precipice they were approaching. His master plan was to capitalise on the popularity of their proprietary messaging system, BBM. Massively popular with teenagers and people in developing countries, BBM was used by millions of users every day and was completely controlled by BlackBerry.

His plan, was to morph BlackBerry into a services provider and for them to dominate a different vertical in the mobile ecosystem. If they could persuade mobile networks to use BBM as the new de facto standard for instant messaging, BlackBerry would have a role to play on every smart phone in the world. He envisaged that eventually, BBM could potentially replace SMS text messages.

If somehow BlackBerry could get their messaging service onto all sorts of non-BlackBerry smart phones, they would have access to an enormous source of new revenue from fees charged for each message sent. It was Balsillie’s big idea.

However, it wasn’t to be. Soon rival messaging services such as Kik Messenger and WhatsApp were cornering the market. In January 2012, Mike Lazaridis and Jim Balsillie resigned as the joint CEOs of BlackBerry and Thorsten Heins took over. Not long after, Heins and Lazaridis agreed to kill Balsillie’s dream for BBM.

Now BlackBerry are releasing a version of BBM for android and iOS smart phones but the damage has probably already been done. Most industry analysts think it’s too little too late.

Just a few days ago BlackBerry published an open letter in The Times. It’s also reproduced on their website and the message is clear. BlackBerry are desperate and they need to persuade consumers that they are still a meaningful force and a viable option. They want to say loud and clear “You can continue to count on BlackBerry”.

The letter itself if worth a read. It’s a defiant call and a strong attempt to show why BlackBerry is still relevant. Only time will tell whether this is the end of BlackBerry or merely a new beginning.

What’s your take? Should BlackBerry have tried to roll-out BBM to other platforms much sooner? Were they wrong to embrace touchscreens over concentrating on devices with physical keyboards? And was using QNX as the basis for the BlackBerry 10 operating system a major mistake? Let us know below.

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25 October 2013 ~ 0 Comments

Is this the end of BlackBerry?

blackberry hq

Troubled BlackBerry recently announced that the company was up for sale and actively looking for a buyer. The company, famous for its business-friendly pioneering smartphones, was once a dominant player but has recently seen its market share crash from almost 50% three years ago to less than 5% today.

There was recently a fascinating article in Canada’s Globe and Mail which offers an insightful inside-view about the downfall of Blackberry. It also elucidates a different perspective behind BlackBerry’s recent announcement that they will be releasing their BBM messaging service to other platforms this year.

The piece of investigative journalism is drawn from interviews with several of the most senior key players within the company has seen its fortunes wane over the past few years. For many fans of BlackBerry who’ve watched over £50 billion on the company’s market value be wiped off in just five years, it’s a mystery as to how things could have gone so wrong so quickly. After all, BlackBerry pretty much invented the smartphone market itself.

However, inside the company, founder and ex-CEO Mike Lazaridis had been warning against their strategic decisions for some time. BlackBerry had always done well courting corporate customers – even Barack Obama admitted to being addicted to his BlackBerry – but with the release of BlackBerry 10, they aimed after the general smart phone market by releasing yet another touchscreen handsets to compete against the iPhone and the plethora of Android devices.

Let’s turn the clock back a little… Four years ago, in 2009, RIM (as BlackBerry was known back then) Was undergoing a massive global expansion. Fortune had declared that it was the world’s fastest-growing company. And market research demonstrated that 80% of people wanting to buy a smart phone were going to get a BlackBerry.

However, just a couple of years later in December 2010, BlackBerry was already showing signs of struggling. According to ComScore, RIM’s market share has been slashed from over 40% to just 36.1%. by the next year, it had fallen even further to just over 15%. Much of this was due to competition from Google’s competing Android platform which had seen its market share rise to almost a quarter at the end of 2010 and then almost doubled over the following year.

In general, after the iPhone first came out and Android began to get a foothold in the smartphone market, BlackBerry was in an era of strategic confusion. They were lost in the marketplace that has rapidly developed and weren’t sure how to differentiate themselves in light of all the incoming threats. In particular, they forgot what made them popular in the first place.

Many within the company thought that by focusing on being the only smartphones available with a physical keyboard as opposed to touchscreen, they would carve out a strong and enduring niche for themselves.

Others thought that this was missing the point and the diehard fans and traditional customers didn’t especially love the concept of the physical keyboard and its physical manifestation – rather, I like blackberries because the physical keyboard represented its business-focused and professional ethos that differentiated blackberries handsets from Apple’s and Google’s.

By focusing purely on physical keyboards, and failing to react in other ways, BlackBerry failed to maintain a grasp on its core market. And as sales dwindled, they got more and more desperate and started to reconsider touchscreen devices again.

One early example was their abortive attempt at producing a tablet to compete with Apple’s iPad. It was a failure, and BlackBerry were forced to slash the price almost immediately in order to shift unsold stocks. the Playbook was also in many ways a turning point for the company. In the financial markets, it was becoming obvious that BlackBerry were struggling. The stock lost over three quarters of its value and by getting distracted with the Playbook project, the new version of the operating system – BlackBerry 10 – suffered from substantial delays.

Check out part 2 of this article about BlackBerry’s decline over the last few years…

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