DEATH OF A COMPANY – AT 11:13 A.M. ET: We never like to report the death of a company. There are families involved. Employees. Shareholders who depend on the income.
But RIM, the makers of the legendary Blackberry, is dying very quickly, a classic example of a company that just didn't keep up with its more imaginative competitor, Apple, maker of the iPhone. The story demonstrates how quickly tech companies must react in the digital world. From the New York Post:
BlackBerry is on death watch, waiting for a visit, perhaps, from the RIM-reaper.
The Canadian company RIM, a national treasure, is losing the faith of even its home country as it bleeds BlackBerry users in North America. A once-committed business base is fraying, overcoming the “CrackBerry” habit that once gripped executives who couldn’t escape their messaging devices.
Now, the BlackBerry is looking at pager-like obsolescence, a future textbook case for business school about how far and fast a company can fall.
“Even hard-core fans of BlackBerry are starting to look away,” said Steven Brasen, a research director at Enterprise Management Associates.
Last year, 70 percent of companies with 10,000 or more employees were on BlackBerrys; this year that market share will fall to 30 percent, Brasen said.
Last week, RIM reported what was likely its last quarter of growing its user base, which stands at 78 million. Revenue is dwindling, down 43 percent year-over-year last quarter, and the next-generation BlackBerry 10 phone was delayed again.
Customers are not waiting while RIM, which cut its work force by a third, plays catch-up to Apple and Google phones already available.
Margaret Wood, a saleswoman in Canada, abandoned her home country’s iconic tech company, and after years of BlackBerry use she switched to the iPhone last week.
“I have been using an iPad for a couple of years,” Wood told The Post. “The switch to the iPhone was natural.”
She’s an example of how Apple lures customers with one product and rides the halo effect as users become attached to the ecosystem of developers who deliver apps and other content. Apple says it’s sold 250 million iPhones since it debuted in 2007.
COMMENT: It's a grim story, but it also illustrates, in a perverse way, why the free-enterprise system is best: There's usually someone out there working to provide a better product that meets market needs. No such luck in real socialist systems. Obviously, we want to work to reduce pain wherever possible, without destroying the benefits of free enterprise, which is what visionaries, both in industry and government, have sometimes tried to do, with varying degrees of success.
July 1, 2012