Last night BlackBerry announced grim news about the possibility of posting a $1 billion loss in the last quarter and plans to lay off 40 percent of its global employees. Most of the losses emerged from writing off almost $960 million worth of Z10 inventory, which incidentally was BlackBerry’s first smartphone running on BB10 – the platform that was supposed to save the company from its demise. BlackBerry noted that most of the 5.9 million phones sold through to end consumers in the quarter were running on older BlackBerry OS 7 and not BB10. This does not look like a platform that would save the company. But how did it get to this?
Apart from competition from Android and iOS and BlackBerry losing its popularity in key markets, I am of the opinion that BlackBerry killed itself. BB10 could still have saved the company, but in the end it was too little and far too late. The project itself was more than a year late with multiple delays that left the company with no significant new product for a year. With no compelling products to take on Samsung’s Galaxy smartphones and Apple’s iPhones, BlackBerry not only lost significant time but even market share in major markets. What was once a productivity device that people were proud to buy had become an underground cult of a few faithful that continued to live in the dark ages.
BlackBerry’s new CEO, Thorsten Heins, delayed BB10 last summer saying he won’t let an unfinished product out of the door. Sensible decision but what eventually got released wasn’t anywhere close to finished either. BB10 on the Z10 was bug ridden, had UI quirks and overall was not the product that everyone expected after having to wait for nearly two years. The flagship phone pricing ensured that only the few faithful that remained bought it while the rest moved on to better products.
If I were to name one thing where BlackBerry faltered, I would point out quality control. It seems BlackBerry cut costs on quality control across divisions – software, hardware and apps.
BB10 was a great concept but the execution wasn’t up to the mark. The ‘Hub’ that was supposed to make lives easier, actually made it difficult to use with users having to cope through multiple layers to reach to the stuff they wanted. The predictive keyboard was among the very best I have ever used but when it worked. BB10 always felt like using a platform running in beta, a work in progress and the user was a tester who was being paid (not the case) to report bugs. The whole project seems to have been mismanaged and BlackBerry just did not have what it would have taken to ship a decent, usable operating system. The company was running out of time and Heins probably had to give up and ship it without finishing it.
Now coming to hardware. On paper, the Z10 had formidable specifications but it just could not compete with any of its rivals. Users complained of battery drain, frequent reboots and hardware failure. A quick check at BlackBerry service centres revealed that failure rate of BB10 smartphones are much higher than that of competing devices. It seems there was no one manning the quality control station when these phones were being shipped out.
With virtually no quality checks in place on the operating system and hardware fronts, it is hardly surprising that there were none when it came to apps either. While the company trumpeted having over 120,000 apps in its store, users had a tough time finding apps that they could really use. Then it turned out that a single developer was responsible for almost a third of all apps and was essentially spamming the store. There is no way BlackBerry did not know about it and it chose to look away and let it continue. After all, it needed numbers when everyone else was talking about numbers in their stores. It is not as if Apple or Google’s stores did not have a spam problem, but this was unprecedented. For BlackBerry, it was more important to have those numbers than think about its users.
Only if BlackBerry had better quality checks across the board, the story could have been a little different today. With the news of shipping just 3.7 million units in the quarter and BB10 smartphones not selling in the market, it will become all the more difficult for BlackBerry to find a buyer. In all probability spinning off BBM into another company and selling the remaining in bits and pieces would be its best bet.