6 Reasons Why BlackBerry is Losing Their Competitive Advantages

December 7, 2011 at 7:03 am | Blog

In the past 12 months, BlackBerry (and its parent company, Research in Motion) seem to have lost their way. It seems that they got carried away with innovation at the expense of what really matters most to the customer’s buying decision. Too often with tech companies, they keep trying to add more technical “bells and whistles.” The problem is, if the “bells and whistles” over-complicate the product and are not valued by the customer, and if customer service gets sacrificed in order to pay for all the new bells and whistles, then no amount of new product innovation will matter, because the bad service has a shadow effect on everything else.

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Examples of how Blackberry is losing relevance and their key competitive advantages:

  • Losing customer loyalty: According to a recent report from research firm GfK, only 48% of Research in Motion customers would choose to keep their Blackberry phones. (Compared to loyalty ratings of 60% of Google Android users and 84% of Apple iPhone users.)
  • Service outages: Millions of BlackBerry users were without service for 3 days in October 2011 due to a critical network failure. When your service is responsible for connecting customers to their business critical data and communications, you can’t afford to make your customers endure a service outage for three days.
  • Faltering tech support: At Smart Advantage, we’ve experienced firsthand what a cumbersome, circular, multi-tiered nightmare it can be trying to get on the phone with an actual knowledgeable tech support person from BlackBerry. They have multiple layers of tech support, each with their own delays, limitations and (often) extra fees, before you can get through to someone who can help.
  • No longer #1 in security: BlackBerry used to be the gold standard in smart phone security for small-to-mid-sized businesses. BlackBerry was known for “security” just as Volvo is known for “safety.” This is no longer the case, as even some law firms (businesses that require the highest levels of information security and confidentiality) have introduced Android and iPhone devices that meet or exceed the BlackBerry standards for security.
  • Apps are less than “appetizing:” Because of the excessive specificity of the BlackBerry OS, the BlackBerry does not “play well with others.” This means that some apps which people love (like Google Maps) are not available on BlackBerry, or are only available in a convoluted, counterintuitive alternate version of the app you can easily get on iPhone or Android.
  • Failed attempt to sell tablet PCs: The Research in Motion PlayBook was the company’s attempt to compete with Apple’s game-changing iPad tablet computer, but it has floundered. RIM sold only 200,000 PlayBook tablets in the most recent quarter, compared to 11 million iPad sales during that same time period. No one is buying the PlayBook, in large part because it doesn’t offer easy access to e-mail (which is one of the most frequently-used and most relevant applications for any smart phone or tablet user) and lacks Apple’s extensive universe of multipurpose apps.  RIM has tried to move more PlayBook tablets by slashing the price (even if that means selling at a loss), and now they’re apparently giving the PlayBook away for free as a “freebie bonus” for enterprise server customers. It appears that cutting prices is a signal of surrender.

This story is an example of how when competitive advantages go away, the negative momentum can become a self-fulfilling prophecy, especially in the fast-paced technology sector. Once the iPhone and Android came around, all of a sudden BlackBerry’s key competitive advantage went away, and RIM never adapted fast enough to meet the changing needs of the market.

Is there any hope for BlackBerry and RIM, or is it too late for them to recover?

One area of optimism is that BlackBerry still has a significant foothold with corporate customers – rather than individual consumers. Perhaps RIM can make a “last stand” by focusing on the enterprise market. This is a big plus for them, as RIM still has big market share and credibility with this audience.

I wonder if RIM has conducted any customer research to go deeper into why their business customers still choose to buy from them? For example, is there something that BlackBerry offers that is uniquely well-positioned for enterprise use?

And even if RIM has done the customer research, have they listened to what customers are saying? Customer research can be the best way to hone in on your competitive advantages, and then communicate those relevant competitive advantages to other customers.

From our experience, many companies don’t do this – or even if they spend the money on customer research, they don’t listen to it. Many companies unfortunately ignore the voice of their customers – do you?