20 Part 1: Strategic Management Inputs
© Bloomua/Shutterstock.com
Both the iPhone and Android systems have more fully
developed app ecosystems than Blackberry, which
has limited Blackberry’s success.Strategic Focus
The Failure of BlackBerry to Develop an Ecosystem of Stakeholders
In 2007 the Apple iPhone was introduced as a consumer
product which became known as the smartphone. At the
time, the dominant player in this category was Research in
Motion (RIM) and later known as BlackBerry. As late as 2010,
BlackBerry held 43 percent of the commercial and govern-
ment communication sectors. As consumers, including the
business and government segments, found the smartphone
to be superior as far as utility, BlackBerry’s market share began
to decrease precipitously. Although BlackBerry’s technology
allowed it to be a superior communication device for email
and phone, the iPhone was superior as a handheld computer
device, including communication and messaging, with much
more versatility.
BlackBerry’s demise provides an informed example of
how the competitive landscape has changed in regard to
successful business model implementation. Previously,
having a good product or service and well run cost-effective
company with sound capital structure was sufficient. With
newer business models, having an effective strategy to man-
age the ecosystem or network of suppliers and customers
has become more salient. Because BlackBerry had remark-
ably loyal customers and a strong product it failed to recog-
nize the importance of Apple’s ecosystem innovation, which
allowed it to expand and diversify its range of applications
for its handheld computer (smartphone). In particular, com-
plementors to the industry (a concept explored in Chapter 2)
were key; the innovation for Apple was its ecosystem of app
developers. Apple not only focused on the value chain of
making the iPhone and iPad, but it also focused on manag-
ing the ecosystem of creating valuable apps. As a result, an
army of software developers were committed to produc-
ing iPhone applications, was behind the development of
Apple’s device for the general consumer and for business
professionals. They created a network of stakeholders and
facilitated a way to make it easy to install apps on the phone.
App developers responded in huge numbers. When the app
store launched in 2008, there were 500 apps. Within a year
there were 55,000 apps and over a billion downloads. This
was the significant difference between the small develop-
ment community focused on BlackBerry and the massive
development community that arose around applications for
the iPhone. The “open” system strategy approach used by
Google in fostering the Android system allowed a compet-
itive ecosystem to develop that rivaled that of the iPhone.
Even now BlackBerry has not been able to create the type
of stakeholder ecosystem comparable to those of Apple and
Google.
Since 2010 BlackBerry has had two new CEOs and,
although there are improvements, the firm has never recov-
ered. Although BlackBerry has tried to focus on the business
and government sectors using its classic look with phys-
ical keyboard, it still had a 34 percent drop in revenue in
fourth quarter of 2014. The reviews of its latest product, the
BlackBerry Classic, note that although consumers are likely
to appreciate the retro feel of the device because of the per-
fected physical keyboard and mouse-like track pad, preloaded
apps are slow and poorly designed. The app situation is prob-
lematic because BlackBerry doesn’t have the number of app
developers of the Apple or Google ecosystems. Many of the
apps that you do find are difficult to download and often do
not resize to fit the Classics’ square screen well. As such you
get a real physical keyboard to help with emails, manage your
calendar, and browse the web, but few other good softwareapplications. Although this is the Classic is the best model ever
released, it is expected that BlackBerry will continue to decline
due to the lack of quality apps such as the ones found in its
competitors’ ecosystems.
Apple was able to outsource innovation to more
developers than it could afford to employ thereby ensuring
a steady stream of desirable new applications and content.