I had a Crackberry Torch. I really liked it. It felt solid. Substantial.
BlackBerry surprised investors on Wednesday (6/28/2023), announcing significantly reduced losses in its latest quarter.
But it wasn’t because of a sudden surge of phone sales inspired by the recent movie about the company. Instead, it was because of a complex sale of non-core patents, which netted the company some $218m, adding to its cash reserves.
A company that once sold $20 billion a year surprised investors by having revenues of $208 million.
How did this happen?
- Arrogance – Blackberry was convinced that it had a stranglehold on the corporate market based on 2 huge advantages: security and the ability to function everywhere in the world. The counterpart to that was that Blackberry also thought it could impose that thinking on every businessman in the world. And, of course, this is a segway into the second factor.
- Ignorance – Blackberry totally misread that corporate user. At some point, I, and everyone in FCB’s C-Suite switched from Blackberry, first, into Motorola (we all a Motorola Tri-band) and then to Nokia. We all wanted apps, maps, games, text and more on our phones. Blackberry was arrogantly convinced that “real businesspeople did not play on their phones” and, of course, we did.
- The real world caught up – If your only advantage is product-based (solid feel, email that works everywhere in the world and security) you can be sure others will catch up. Motorola caught up with the famous Tri-Band. Nokia caught up. And, soon, all of us “corporates” had plenty of choices that offered security and the ability to work everywhere.
The security switch
As businesses and governments favored BlackBerry phones for their security features, the company realized that selling this underlying software, instead of the hardware, could be a viable parachute strategy for the ailing company.
The shift clearly didn’t restore revenue to its peak, its most recent sales amounted to just 3% of that high, but it did ensure the survival of the company.
Today, Blackberry's IoT (Internet of Things) business provides software into over 235 million vehicles for various functions, ranging from driver assistance to infotainment systems, while the company’s cybersecurity solutions are used by numerous mobile banking websites.
So, yes, it pivoted but, you know what, arrogance and ignorance took Blackberry from $20 billion to $208 million.
