27 March 2014 ~ 5 Comments

#5: An insider’s view to the downfall of BlackBerry

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’re already down to the top five stories and this video is about some astonishing revelations from BlackBerry employees made in 2013.

We scrutinise these reports to reveal how strategic confusion, bad executive decisions and acquisitions as well as internal delays led the company to suffer a huge dip in market share as well as massive redundancies last year.

2013 was BlackBerry’s annus horribilis and it started with a major blow as it was reported that they had failed the security requirements of the government’ Communications-Electronics Security Group. While it later turned out that the Restricted classification was merely delayed rather than denied and that BB10 had FIPS 140-2 cryptography certification from the US government, the reports were symptomatic of larger issues within the company. Later in 2013, BlackBerry insiders made the shocking claim that huge mistakes had been made at the upper echelons of management.

BlackBerry pretty much invented the smartphone market itself and in 2009, RIM (as BlackBerry was known back then) was claimed to be the world’s fastest-growing company. But £50 billion of the company’s market value has vanished in the last few years.

last year, sources claimed that after the iPhone first came out BlackBerry was in an era of strategic confusion. Inside the company, founder and ex-CEO Mike Lazaridis thought that by focusing on being the only smartphones available with a physical keyboard as opposed to touchscreens, they would carve out a strong and enduring niche for themselves.

But then they acquired the Unix-like QNX operating system in 2010 and BlackBerry staff claimed that QNX brought their own hubris and infected the product development team with and incompetent engineers. As a result the ill-fated PlayBook project failed and even caused delays to the release of BB10.

As sales dwindled, they got more and more desperate and, in what was a significant turning point, the new CEO, Thorsten Heins, decided to continue to emphasise touchscreen devices. This turned out to be a terrible mistake as is evident from the underwhelming response to the flagship Z10.

last year, from within BlackBerry, we got the shocking revelation that co-CEO Jim Balsillie had been arguing for a significant change in direction for man y years. His master plan was to capitalise on the popularity of their BBM messaging system.

His plan was to morph BlackBerry into a services provider and for them to dominate a different vertical in the mobile ecosystem. Eventually, BBM could potentially become a de-facto standard and replace SMS giving them access to an enormous source of new revenue from fees charged for each message sent.

However, it wasn’t to be. After Thorsten Heins took over as CEO, he killed Balsillie’s dream for BBM. Balsillie quit the board and cut all ties to BlackBerry in protest and soon, while Blackberry delayed, rival messaging services such as Kik Messenger and WhatsApp had cornered the market. Even though they eventually released a version of BBM for Android and iOS, the damage was already done.

BlackBerry’s market share has plummeted from over 50% three years ago to less than 5% today. In October, due to poor sales on the Z10, BlackBerry announced that, in addition to 5,000 redundancies in 2012, they would need to further cull their staff by sacking 4,500 more – that’s estimated to be half their remaining employees.

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

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04 December 2013 ~ 0 Comments

Has the iPhone 5C tanked?

iphone 5c

It’s been a few months since Apple’s release of its new mobile phones, the flagship iPhone 5S and the “budget” option, the iPhone 5C. It’s fair to say that the sales figures have been very impressive – within just days of the launch in September, Apple had shifted almost ten million iPhones making it a new sales record for the Cupertino company.

However, industry analysts have not failed to notice that Apple did not reveal the split in sales between the two devices. And, in actual fact, it turns out that there’s a fairly significant difference. The actual disparity is far bigger than most people were previously predicting.

We’ve seen the latest report from Kantar Worldpanel ComTech which suggests that the more expensive iPhone 5S is outselling the 5C by a threefold factor. Kantar Worldpanel is a well-established market research company that has been headquartered in London since 1997. Their latest research report looked at data from UK sales up until the end of October.

Following the initial announcement announcement of the phone, the lacklustre specs of the 5C combined with the relatively high price led many to predict it would suffer from poor sales. However, almost no one expected the discrepancy to be quite so significant.

It is tempting to see the relatively poor sales of the iPhone 5C to be a failure. After all, Apple has been dogged by reports that have been artificially-constricting the supply of the 5S in order to try and shift more units of the less desirable 5C. Factually, it is certainly the case that the 5S has been barely able to keep up with demand. And it has also been reported that Apple’s Chinese factories are shifting production away from the 5C to produce five best handsets at a faster rate.

However, despite having a much higher price then almost any other handset on the market, evidence does suggest that the iPhone 5C is making some inroads into its target market of poorer households, especially in richer Western nations. Twice the proportion of iPhone 5C owners have lower incomes when compared to owners of the iPhone 5S.

Most encouraging for Apple is the fact that the 5C is drawing customers away from their big rivals; Samsung in particular. While the vast majority of iPhone 5S owners were already Apple converts and had upgraded from a previous iteration of the iOS smartphone, the iPhone 5C seems to be winning over new customers with about 50% of the buyers coming from competing brands. Certainly its lower price point has a huge part to play in that.

One mustn’t be too hasty to declare the 5C success, though. Arguably the cost is out of reach of the majority of consumers and, despite an aggressive marketing campaign, only older and cheaper models of the iPhone have any chance of making substantial inroads into emerging markets around the world.

Indeed, Apple’s market share overall is still in decline. So while the iPhone is shifting boxes at a frenetic pace, Android and Windows Phone are taking ever-increasing bites out of Apple’s share of the smartphone market. In fact, the latest figures show that Google’s Android is by far the most popular mobile platform in Britain largely due to the widescale availability of lower-priced handsets running the operating system.

With the entrance of cut-price Chinese manufacturers such as Lenovo, Zopo and Star into European markets, we predict that this trend will only continue into 2014. It’s likely that android we running on more and more people’s phones over the coming few years especially if Apple refuses to be competitive in the lower income price ranges.

Smartphones are now truly mass-market devices – almost every new mobile phone sold nowadays in Britain is a touchscreen smartphone. Already, Android is on more than seven out of every ten mobile phones in Europe and dominates more than half the market in the UK. Meanwhile, Apple’s lingering behind but less than 30% of the market and BlackBerry has been almost entirely squeezed out with less than 3% according to the latest figures and this year.

So, what you make of these figures and the report that the iPhone 5S is outselling the iPhone 5C by three to one? Does this latest new surprise you at all or is it what you’ve come to expect from the latest iPhone launch? And how do you see the battle between Google’s Android and Apple’s iOS continuing over the course of next year? Please let us know your thoughts and opinions in the comments below.

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26 November 2013 ~ 0 Comments

BlackBerry’s new UK MD


Alexandra Zagury has been named as the new managing director of the UK and Ireland branch of BlackBerry, formerly known as Research In Motion (RIM). Struggling smartphone manufacturer is made the move following Rob Orr’s defection to up-and-coming rival Samsung back in June.

In the meantime, the MD or the whole Europe, the Middle East and Africa (EMEA) region, Robert Bose, had been taking on the job an interim basis. There has been a lot of speculation that Zagury would takeover but it has only recently been confirmed that she will step into the position. Replacing Zagury in her previous post will be former Yudi Moodley who was previously the business management director for the Middle East and Africa.

Alexandra Zagury is a graduate of the London School of Economics in London and has been with the company for several years now. Ahe spent much of that time – total of about 18 months – working as a director for the South Africa, Southern Africa of BlackBerry.

During this period, she relocated to BlackBerry’s offices in Johannesburg. She is also hold a position as the MD of the Turkey branch in Istanbul as well as working in many senior roles for BlackBerry in the UK.

Despite her wealth of experience, there is no doubt at all at that her job will be a very tough one as she desperately aims to alter the fortunes of struggling BlackBerry. In recent years, and especially following the tough competition from Apple and Google, profits are income have been falling at BlackBerry and there’s little doubt in industry that the BlackBerry 10 platform has been all but a failure according to adoption figures.

Dispute this, Alexandra Zagury has strongly suggested that the BlackBerry 10 platform – running on QNX – is obsolete positions allow BlackBerry to lead the way mobile phones to mobile computers. She has claimed that the experience offered by this operating system means that user experience will not be, might as phones become more and more powerful.

Alexandra Zagury will also be aware that the UK market is much more competitive and a tougher nut to crack than Africa. She recently tweeted that BlackBerry drives 14% of Internet traffic in Africa but this is mainly due to the fact that older BlackBerry devices are available for much lower cost and the latest android and Apple smart phones. It’s also not certain whether they’ll be to keep up this trend as smart phone manufacturers target developing regions with cut-price android offerings.

It is also telling that, despite BlackBerry accounting for 14% of aggregate Internet traffic in Africa, major competitors to is BBM messaging platform such as what’s up and Skype are fast rising rivals. Dated protocol WAP is also third in the list behind BlackBerry suggesting that when high-speed mobile Internet becomes more common, the more traditional offerings allowing smart phones to connect a regular mobile networks will become more popular as they have done in more established markets. Mobile Internet access is still rather in its infancy in Africa and as it matures, BlackBerry will have a tough time trying to hold onto its portion.

What you make of this news? Does Alexandra Zagury have what it takes to turn around BlackBerry’s fortunes in the UK market? Or is it simply too late for the struggling company already? Please let us know your thoughts and opinions.

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