The only thing tougher than building a successful business from scratch is turning around a big company that has lost its mojo. Research In Motion launched the smartphone market by producing mobile phones that email addicts loved. But when Apple and Google came out with smartphones for consumers, and developers created hundreds of thousands of apps for the devices, they started a “bring your own device” craze that took a big bite out of RIM’s sales.
That should have been Research In Motion’s cue to reinvent itself. Changing its name to BlackBerry was beside the point. BlackBerry needs to identify the next big opportunity for mobile phones and seize that opportunity by developing innovative solutions.
After all, that’s how Apple and Google blew past BlackBerry. The original iPhone was an instant hit thanks to two innovations. First, it was an iPod with a phone and digital camera—all built to Steve Jobs’ demanding specifications. Second, it featured the first touchscreen that ordinary humans could actually use. Android did even better because it gave the other phone makers a free operating system that they could use to compete with the iPhone and it leveraged Google’s industry-leading Internet technology. And both products were exquisitely timed: iPhone and Android offered multimedia capabilities just as mobile operators began upgrading their networks in earnest to faster 3G wireless technology.
There are three things that BlackBerry can do to reclaim its magic. First, BlackBerry should drive the use of near field communications (NFC) technology to replace traditional credit cards, keys, and tickets. One of the major reasons that people buy smartphones is that smartphones serve multiple functions. We also know that most people carry around too many credit cards, keys, and pieces of paper. There is an obvious problem here that smartphones can solve. And it’s a good fit for BlackBerry, too: The Company has supported NFC since 2011 and has learned how to make exchanging data between phones and between phones and tags simple and convenient.
Second, BlackBerry should help enterprises use their mobile devices to conduct business. Up to now, BlackBerry has helped enterprises manage their devices, but this is no longer a growth opportunity. Most enterprises now support devices made by different manufacturers, and few are going to entrust the management of those devices to a single manufacturer. (Imagine Apple offering to help enterprises manage their Android devices!) Plus, the market is about to become more competitive, because many device management functions can now be handled by apps and cloud-based services. BlackBerry can make better use of its enterprise know-how by helping enterprises devise and execute mobile commerce strategies.
Third, BlackBerry must give consumers specific capabilities that they want but can’t get from other smartphone makers. Trying to match the sheer volume of content and apps available from Apple, Google, and Microsoft is a futile endeavor. BlackBerry recently announced relationships with music and video content providers including Walt Disney Studios, Sony Pictures, Universal Music Group and Warner Music Group. While it’s easy to establish such relationships when you have tens of millions of users, leveraging them to drive growth is not so easy. BlackBerry is trying to woo consumers at precisely the same time that Microsoft and Nokia are making a big push for Windows 8. Though BlackBerry has done a commendable job attracting developers to its new BB 10 operating system, it is unlikely to finish above fourth place. BlackBerry’s top priority should be to empower consumers by moving the functionality of their credit cards and keys into their smartphones.
Apple and Google are vulnerable precisely because they are the market leaders. While both want the market to continue growing, neither wants to jeopardize its current business. Apple and Google act as if they have forever to develop mobile commerce. The iPhone doesn’t yet support NFC. That’s probably because Apple is concerned about NFC’s impact on form factor and cost. And while some Android phones do support NFC, Google is pushing for NFC to be more “open” to ensure there is always a place for Google Wallet. With Apple hesitating and Google mired in politics, now is the time for a hungrier and more nimble player to jump start the mobile commerce market.
BlackBerry has strayed from what made it a success. Trying to resuscitate a fading device management business, hiring music superstar Alicia Keys as Global Creative Director, and adopting a new name—these actions do not address the real problem. BlackBerry needs to revive the spirit that enabled it to design the first truly popular smartphones.