BlackBerry 10 can't prevent RIM's Waterloo
PRESIDENT Barack Obama couldn't bear to part with his BlackBerry. Oprah Winfrey declared it one of her "favourite things".
It can be so addictive that it has been nicknamed "the CrackBerry".
Then came a new generation of competing smartphones and suddenly the BlackBerry, that game-changing breakthrough in personal connectedness, looked ancient.
There is even talk that the fate of Research In Motion (RIM), the company that fathered the BlackBerry in 1999, is no longer certain as its flagship property rapidly loses market share to flashier phones such as Apple's iPhone and Google's Android-driven models.
With more than $2-billion in cash, bankruptcy for RIM seems highly unlikely in the near term, but these are troubling times for Waterloo, Ontario, the town of 100000 that was transformed by the BlackBerry into Canada's Silicon Valley.
RIM was once Canada's most valuable company, with a market value of $83-billion in June 2008, but the stock has plummeted, from over $140 a share to around $10.
And its US share of the smartphone market belly-flopped from 44% in 2009 to 10% in 2011, according to market researcher NPD Group.
The company still has 78 million active subscribers across the globe but last month it warned that it will lose money for the second consecutive quarter, will lay off workers this year - 2000 were laid off last year - and has hired a team of bankers to help it weigh up its options.
Of RIM's 16500 remaining employees, 7500 live in Waterloo, a university town 90 minutes' drive from Toronto, where everyone seems to know someone who works for RIM.
The decline of the BlackBerry has come shockingly fast. Just five years ago, when the first iPhone came out, few thought it could threaten the BlackBerry. Now chief executive Thorsten Heins says his employees "are getting asked all the time, 'What's going on with you guys? What happened? I mean RIM is the star of Canada and what happened to you guys? And how bad is it going to get?'"
RIM's software is still focused on e-mail and is less user-friendly and agile than the iPhone's or Android devices. Its attempt at touch screens was a flop and it lacks the apps that power other smartphones. Its tablet, the PlayBook, registered only 500000 sales to Apple's 11.8million in the last quarter despite a price cut from $500 to $200, well below cost.
RIM's hopes now hang on BlackBerry10, a new operating system that will debut later this year. It's thoroughly redesigned for the new multimedia, internet browsing and apps experience that customers are now demanding.
Heins, formerly RIM's chief operating officer, who took over as CEO in January, says he can turn things around.
But Tad Homer-Dixon, chairman of the Centre for International Governance and Innovation, a Waterloo-based think tank, speaking of the effect the company has had on other businesses, said: "Ten years from now, BlackBerry will be in the Smithsonian but these [other businesses] will, I hope, still be thriving."
Homer-Dixon said it's amazing that RIM got this far, considering it has had to compete with Silicon Valley, "the most powerful engine of innovation that humankind has ever created".