Skip to main content

Past its sell-by date: BlackBerry’s rotten 2013

BlackBerry has had a terrible year. The company seems to have packed a decade of bad news into 2013, and it's still only November. Its complete and utter demise has been painfully well-documented, with precious few clanger-free weeks passing by over recent times. Worse still for the company, arch rivals Apple, Samsung and Google have gone from strength to strength, gobbling up any remaining die-hard BlackBerry fans in the process.

The sheer amount of negative press surrounding the company is almost overwhelming and, to be honest, just staying up-to-date with BlackBerry news has been a little bit difficult. So below is a condensed account of BlackBerry's year, from financial figures to BYOD to collapsed buyouts. Be warned though - this is no bedtime reading for the faint of heart.

The mini renaissance

January was an important month for BlackBerry, which identified it as the perfect starting point for a deperately-needed recovery. And things started off pretty well. Then CEO Thorsten Heins sent share prices flying after confirming that the company would consider selling off its hardware unit and licensing out its software to aid growth. The following week, amid a great deal of fanfare, it launched brand new operating system BB10 alongside the Z10 and Q10, and announced it would replace Research In Motion (RIM) with BlackBerry.

The plans had been laid out for all to see, but the company placed a lot of faith in BB10. A strong statement of intent had been delivered but pressing questions still remained. Would consumers embrace such a business-focused platform? Would the the Z10 prove itself as a worthy iPhone adversary? Was BYOD more than a mere trend?

BlackBerry 10

With March came BlackBerry's fourth quarter financials, and the company revealed its user base had fallen from 79 million to 76 million. The news wasn't all bad though. Profits were up and it managed to flog 6 million devices over the three month period, but only a third of these were the much-heralded flagship Z10. No matter though, for the potentially game-changing Q10 would soon be on its way.

Unfortunately for BlackBerry, its eagerly-anticipated first quarter was also dismal. Analysts in particular had been looking forward to these figures, mainly because they corresponded with the Z10's first full quarter on the shelves in the US, and they certainly had plenty to talk about. BlackBerry sold 6.8 million mobiles but refused to reveal the number of BB10 smartphones it shipped during the period, simultaneously announcing losses of $84 million (£55 million). Heins' response? "We are still in the early stages of this launch, but already, the BlackBerry 10 platform and BlackBerry enterprise Service 10 are proving themselves to customers to be very secure, flexible and dynamic mobile solutions."

In contrast, Samsung managed to shift over 10 million Galaxy S4s in less than a month and Apple sold a staggering 9 million units of the iPhone 5S and 5C in one weekend. These may be extreme cases, but not too long ago, BlackBerry was bigger in the smartphone game than both of these heavyweights. As recently as 2009, the Canadian firm boasted over 50 per cent of the US smartphone market.

BlackBerry finally admitted the Z10 was a stinker in late September, but the damage had already been done. Due to dreadful uptake of the flagship – 3.7 million devices sold in three months – the firm reported losses of $935 million (£580 million). If so much wasn't riding on the phone's success, the news would have almost been funny. In case rivals weren't entertained enough. it emerged that BlackBerry had to shell out significant sums of money on inventory charges as a direct result of barely-existent Z10 interest. Still, Heins insisted, "We remain a financially strong company."

Cuts, cuts, cuts

Job losses and big name departures are standard procedure when it comes to goings-on in the world of technology. But when so much of this type of news comes out of one company, alarm bells ring. Loudly.

Around the same time BlackBerry's name change was approved, it was confirmed that a lot of people had been forced out of the company. Between June and July, at least 250 employees at BlackBerry's Waterloo headquarters were cut loose, joined by US sales chief Richard Piasentin and executive VP of mobile computing David J. Smith. August would signal the end of BlackBerry time for three more senior vice presidents.

True, job losses, especially during difficult patches, are part and parcel of company life. But for BlackBerry, when things go badly they go spectacularly badly. In the wake of revelations that the firm would have to get rid of 40 per cent of its workers - that's a massive 4,500 people - Apple, Intel, Google and Square immediately homed in on Waterloo, setting up shop in hotels and nearby places in hope of picking off tasty chunks of unwanted talent.

Unfit for competition

As unlucky as BlackBerry may have been this year, it has suffered at least one fatal, at-least-partially-self-inflicted problem. The company has simply not been able to keep up with the competition, allowing the likes of Apple and Samsung to leave it trailing in the dust.

At its peak, BlackBerry was the number one choice for young people everywhere. Even during my school and university days, I spent many an hour getting ignored by people frantically BBM-ing each other. But BlackBerry made the ill-fated decision to abandon this base and to solely pursue the enterprise market instead. This was arguably a tipping point – the end of the good times.

I attended the BYOX World Forum in London in June, and took one clear message away with me: bring your own device (BYOD) is no mere fashion of the day. As Ovum's Richard Absalom put it, "Trying to stand in the way of consumerised mobility is likely to be a damaging and futile exercise. We believe businesses are better served by exploiting this behaviour to increase employee engagement and productivity, and promote the benefits of enterprise mobility."

The warning shot was aimed at the enterprise space, but the meaning should not have been lost on BlackBerry. As impressive as its security credentials were, and as office-friendly as its mobile phones were designed to be, business policies had evolved and people had gone beyond the point of caring. Why purchase a BlackBerry if employers make special dispensations for more mainstream devices, like the iPhone?

BlackBerry did not believe that Apple and Google were powerful enough to bully the enterprise into submission, but that is exactly what happened. Even research organisation Gartner urged its clients to stop buying BlackBerry products and to look elsewhere for enterprise business solutions: "Gartner recommends that our clients take no more than six months to consider and implement alternatives to BlackBerry." Not great press, I'm sure you'll agree.

The company's products have long been renowned for their security merits, with BlackBerry's platforms consistently proving themselves more trustworthy than any of the Android or iOS offerings. This year, that changed.

BlackBerry suffered a cruel summer at the hands of its most bitter rivals. Between the months of May and July, Apple's iPhone and iPad, as well as Samsung's Galaxy devices, were cleared for use in the US military by the Department of Defense. Before this happened, 470,000 of the government group's 600,000 mobile handsets were manufactured by BlackBerry - a stronghold if ever there was one.

Also, while much was made of the PRISM spying saga and the damage caused to the reputations of Google, Yahoo and Microsoft, no company was hit harder by the revelations than BlackBerry. With the Snowden saga at its peak and BlackBerry still struggling to come to terms with its dreadful first quarter figures, it emerged that GCHQ penetrated "the security on delegates' BlackBerrys to monitor their email messages and phone calls" at the 2009 G20 summits.

To put this simply, the firm that was completely relying on its apparently super-secure software to stay afloat had its safety net mercilessly ripped apart. A company spokeswoman said, "Our customers can rest assured that BlackBerry mobile security remains the best available solution to protect their mobile applications." But considerable damage had already been inflicted.

The nature of the Edward Snowden documents meant that, whatever the reality, people were always going to place faith in the whistleblower's leaks. The fact that BlackBerry was the victim in this scenario provided scant consolation to the struggling organisation – the government had left its reputation, as well as its software, in tatters.


Who could forget the BBM for iOS and Android fiasco? This little business venture has actually turned out to be one of the high points of BlackBerry's year, but it was still plagued by blunder after blunder.

First came the disastrous launch, which was delayed because a fake version of the Android app made the rounds and caused BlackBerry's team some real trouble. It was actually a compliment to BlackBerry that this issue came to pass, because the rogue software was proving extremely popular, attracting around a million downloads.

When the BBM apps finally did go live in late October – one month later than planned - BlackBerry reported even more interest. The software picked up a stonking 10 million downloads in just 24 hours, spectacularly smashing all expectations. However, BlackBerry obviously wanted to milk this rare bit of good press for all it was worth, and the company ended up going a little too far.

A couple of days after lift-off, the Canadian smartphone maker stood accused of 'astroturfing' – artificially inflating its reputation by posting fake reviews of its products online. Google Play was bombarded with identical, poorly-written comments, which all praised the new BBM app. "Thank you so much Blackberry team. I was waiting this app. It is really great user friendly and smooth," was plastered all over the place.

I hasten to add that BlackBerry firmly denied that this was any of its doing, and there were plenty of genuinely positive BBM reviews on Google Play. Perhaps 'review-gate' was the work of an overly-zealous marketing firm. Whatever the case, the company somehow managed to emerge from a completely positive scenario with lots of egg on its face.

Autumn Hell

The inevitable happened in August. BlackBerry put itself up for sale and one hell of a firestorm erupted.

For weeks, everyone who was anyone in the technology world was linked with an acquisition, but Lenovo and SAP looked the likeliest candidates. However, when the Canadian government expressed its hope that the firm would continue operating in its native country, most of the contenders seemed to fall by the wayside. This week, it came out that Lenovo's attempts to snap up the struggler were blocked by the government, citing national security concerns.

In late September a new body came calling. A consortium led by Canadian firm Fairfax Financial signed a $4.7 billion (£2.9 billion) takeover deal with BlackBerry, which would see shareholders pocket $9 per share. Nothing about this situation was ideal, as far as BlackBerry was concerned, but it looked like a total disaster had been averted. "We wouldn't put our name to such a high-profile deal if we didn't feel confident that at the end of the day that our due diligence would be fine and we'd be able to finance it," said Prem Watsa, the chief executive of Fairfax. "We thought long and hard before we offered $9 a share and we're not in the business of offering a number and at the last minute changing the figure. Over 28 years our reputation is stellar on that front. We just don't do that."

That's all well and good, but it appears that Watsa has no problem with cancelling a deal outright and leaving another company up the proverbial creek without a paddle.

This brings us to November and the present day. This week has been an explosive one in the life of BlackBerry, and it's difficult to watch a company that used to be so mighty having to endure devastating blow after devastating blow. The Fairfax deal that Watsa insisted would definitely, definitely go through collapsed and Thorsten Heins was forced out of the company he's led since January 2012.

"You trust your BlackBerry to deliver your most important messages, so trust us when we deliver one of own: You can continue to count on us," read an open letter penned by the company last month. This simply isn't the case anymore. Everything to do with BlackBerry is crumbling: from GCHQ allegedly circumventing its security measures, to BB10 falling flat on its face, to the immense success of Apple, Samsung and Google.

Gartner's March prediction that BlackBerry would struggle to maintain a five per cent share of the global smartphone market almost looks complimentary now.

As far as BlackBerry is concerned, the future looks grim. I hope the company survives, but its fate is no longer in its own hands. It looks increasingly likely that one (or more) of the bigger entities will swoop in on the fallen giant and dissect it into potentially profitable chunks.

Image credit: Flickr (Official BlackBerry Images; bluemarla; Ben Carleton)

Aatif is a freelance copywriter and journalist based in the UK. He’s written about technology, science and politics for publications including Gizmodo, The Independent, Trusted Reviews, Newsweek, and ITProPortal.