For the past two years my daughter has been asking me for a new phone. “Dad, Dad I need a Blackberry.” Of course she needs one – we live in an age where having the right brand makes the difference between being in the cool gang or not and drives the younger generation to confuse the words “need” and “want” (or even “like”). Her new Sony Ericsson handset with all of the bells and whistles simply doesn’t cut the mustard in her new school with her new friends. To youngsters today a phone is not something they use to make calls. It’s either messaging or nothing.
Last week statistics revealed by Ofcom shows that we now text each other rather than talking face to face. The average British adult sends over 200 text messages a month (based on my daughter’s phone bill I would say the average teenager sends 200 A DAY). It has become so popular that a new language has been spawned, one where LOL, ATM and TIME mean something very different from when we used the words.
One of the accelerants in the explosion of texting has been BBM - three letters that have replaced phrases like “Call me” and “give me a bell” – BBM me. Just like Hoover, Tannoy and Portakabin, Blackberry have become synonymous with a verb thanks to their proprietary software, BlackBerry Messenger. The service when created was a game changer: a free messaging service between users. Using your Blackberry for messaging became a drug. A new repetitive injury found its way into medical textbooks around the world – Blackberry Thumb. Heavy users became known as Crackberry users as the phone became more addictive.
Blackberry manufacturer Research in Motion (RIM) saw massive growth in revenues. New handsets hit the market every six months or so, and all the network operators fought to get the latest models. However, RIM fell into a trap of trying to make its products too feature rich. By adding more and more applications onto its devices it drove the cost of each handset up. And as the cost of the handset went up, so did the retail price. With the prime audience being the younger generation market, cost became an issue and so users held onto old handsets longer. After all, these users cared little that they could listen to music or surf the net on these phones – it was all about messaging.
Business users love the ability to integrate numerous email accounts too. Blackberry became the icon of the new breed of Yuppie, sported by all the good and the great. But they took their eye off the ball. Apple had seen the success of the Blackberry and understood the dynamics of the consumer market. They took their global best seller, the iPod and added phone and messaging technology. The day they launched the iPhone was the day that RIM should have changed its strategy. Instead it carried on developing the high end handsets. Failure number one was simply thinking that the market for handsets would be driven by business users and not consumers.
As the iPhone invasion took hold, so too did the application market. RIM simply failed to foresee that smart phone users wanted an integrated portable entertainment hub. Soon the Blackberry was fighting a losing battle. iPhone sales overtook the device, which had once held a 50% smart phone market share and since then the introduction of Android devices has further dented the company’s standing.
Back in 2009 RIM were named by Fortune magazine as one of the 100 fastest growing companies in the world. Since then their stock price has fallen by 90% and they have so far this year laid off 30% of their work force. They have recently taken the decision to completely abandon the consumer market, concentrating on the high margin corporate user. But how long before Apple hooves up this sector too?
Such tales of doom mean nothing to a twelve year old, though and I am forced to trawl eBay looking for a good second hand handset. The good news is there are plenty available as users move to iPhones. Knowing how these teenage trends work, the day I buy her a Blackberry, she will start demanding an iPhone.
Written by Stuart Fuller, Director of Communications, NetNames
31 July 2012