Michael A. Levin Blog

A blog devoted to analytics, research, and retail

Michael A. Levin Blog - A blog devoted to analytics, research, and retail

BlackBerry Loses Sights of Its Customer

BlackBerry became the signal of status because the company targeted the enterprise market. In that market, CIO and CTO served as the decision maker. Those buyers placed standardization, and security as 1A and 1B as reasons to purchase and adopt a particular technology. BlackBerry offered both. In large part, BlackBerry’s signal dimmed with the launch of the BlackBerry Pearl in 2006. The company’s deviation in the design of its market offering

As then vice president, BlackBerry software excellence Jesse Boudreau explained to BusinessWeek:

it was the “candy bar” format, and it had a track wheel, and it had really good connectivity. It was really nice for scrolling around, and it could play video, and it had a camera. Up until that point, Mike (Lazaridis) had said, “That’s crazy, why would I ever want a camera?” All of a sudden BlackBerry becomes a consumer play.

By entering the consumer market segment, BlackBerry was expected to compete then against Apple’s, and Microsoft’s market offerings (and, later, Google’s). This market segment’s demand differed from the enterprise market segment. The consumer market segment wanted the ability to install apps and use it as an entertainment device. To meet this demand, BlackBerry would need to jettison the enterprise market segment because what one market segment valued, the other eschewed.

BlackBerry attempted to serve both markets until 2013 when the company, more or less, decided to exit the consumer market segment. New CEO John Chen announced a return to the design favored by enterprise customers as well as renewed emphasis on this market segment. Investors have responded with a 30% increase in the stock price in the last four months. However, at little more than $10 a share, the price remains far down compared to its $80 territory set five years ago.

If BlackBerry can manage its margin, and maintain a singular focus on the enterprise market, then it could change its positional advantage, and, ultimately, achieve superior financial performance.

Category: Technology

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