BlackBerry Limited
BlackBerry Limited, formerly Research In Motion, is a Canadian software company specializing in secure communications and the Internet of Things. Founded in 1984, it developed the BlackBerry brand of two-way pagers, smartphones, and tablets. The company later transitioned to providing software and services and holds critical software application patents.
Initially leading the emerging smartphone market in the late 2000s, the company struggled to gain a lasting presence against the iPhone and Android phones. BlackBerry led the smartphone market in many countries, particularly the United States until 2010, with the announcement of the iPhone 4, and in Indonesia throughout the early 2010s. The company withered against the rapid rise of both Apple and Google. After the launch of BlackBerry 10, it transitioned to a cybersecurity enterprise software and services company under CEO John S. Chen. In 2018, the last BlackBerry smartphone, the BlackBerry Key2 LE, was released. In 2022, BlackBerry discontinued support for BlackBerry 10, ending their presence in the smartphone market.
BlackBerry's software products are used by various businesses, car manufacturers, and government agencies to prevent hacking and ransomware attacks. They include BlackBerry Enterprise Server and a Unified Endpoint Management platform.
History
1984–2001: early years and growth
Research In Motion Limited was founded in March 1984 by Mike Lazaridis and Douglas Fregin. At the time, Lazaridis was an engineering student at the University of Waterloo while Fregin was an engineering student at the University of Windsor. In 1988, RIM became the first wireless data technology developer in North America and the first company outside the Nordic countries to develop connectivity products for Mobitex wireless packet-switched data communications networks. Mobitex's wireless data transport also became RIM's first wireless data service that powered the Blackberry and Palm devices until it was phased out. In 1990, RIM introduced the DigiSync Film KeyKode Reader. In 1991, it introduced the first Mobitex protocol converter. In 1992, it introduced the first Mobitex point-of-sale solution, a protocol converter box that interfaced with existing point-of-sale terminal equipment to enable wireless communication. In 1993, it introduced the RIMGate, the first general-purpose Mobitex X.25 gateway. In the same year, it launched Ericsson Mobidem AT and Intel wireless modems containing RIM modem firmware. In 1994, it introduced the first Mobitex mobile point-of-sale terminal. In the same year, it received the Emmy Award for Technical Innovation and the KPMG High Technology Award. In 1995, it introduced Freedom, the first Type II PCMCIA radio modem for Mobitex.In 1995, RIM was financed by Canadian institutional and venture capital investors through a private placement in the privately held company. Working Ventures Canadian Fund Inc. led the first venture round with a C$5,000,000 investment with the proceeds being used to complete the development of RIM's two-way paging system hardware and software. A total of C$30,000,000 in pre-IPO financing was raised by the company prior to its initial public offering on the Toronto Stock Exchange in January 1998 under the symbol RIM.
In 1996, RIM introduced the Interactive Pager, the first two-way messaging pager, and the RIM 900 OEM radio modem. The company developed the pager prototype with the support of Intel Corporation. The company worked with RAM Mobile Data and Ericsson to turn the Ericsson-developed Mobitex wireless data network into a two-way paging and wireless e-mail network. Pivotal in this development was the release of the Inter@ctive Pager 950. In August 1997, a prototype was presented to BellSouth executives, who were impressed with the device and agreed to a $70-million deal that involved the supply of 100,000 devices. The pager started shipping in August 1998. About the size of a bar of soap, this device competed against the Skytel two-way paging network developed by Motorola.
In 1999, RIM introduced the BlackBerry 850 pager. This was also the first device to use the Blackberry OS. Named after its keyboard's similarity to the druplets of the blackberry fruit, the device could receive push email from a Microsoft Exchange Server using its complementary server software, BlackBerry Enterprise Server. Its introduction set the stage for the company's future enterprise-oriented products, such as the BlackBerry 957 in April 2000, the first BlackBerry smartphone. The BlackBerry OS platform and BES continued to increase in functionality, while the incorporation of encryption and S/MIME support helped BlackBerry devices gain increased usage by governments and businesses. During fiscal 1999-2001, RIM's assets grew eight-fold due to massive capacity expansion.
2001–2011: global expansion and competition
RIM soon began to introduce BlackBerry devices for the consumer market as well, beginning with the BlackBerry Pearl 8100the first BlackBerry phone to include multimedia features such as a camera. The Pearl series was highly successful, as was the subsequent Curve 8300 and Bold 9000 series. Extensive carrier partnerships fueled the rapid expansion of BlackBerry users globally in both enterprise and consumer markets.Despite the arrival of the first Apple iPhone in 2007, BlackBerry sustained market share growth well into 2011. The introduction of Apple's iPhone on the AT&T network in the fall of 2007 in the United States prompted RIM to produce its first touchscreen smartphone for the competing network in 2008the BlackBerry Storm. It sold well but suffered from mixed to poor reviews and poor customer satisfaction. The iPhone initially lagged behind BlackBerry in both shipments and active users, due to RIM's head start and larger carrier distribution network. In the United States, the BlackBerry user base peaked at approximately 21 million users in the fall of 2010. That quarter, the company's global subscriber base stood at 36 million users. As the iPhone and Google Android accelerated growth in the United States, the BlackBerry began to turn to other smartphone platforms. Nonetheless, the BlackBerry line as a whole continued to enjoy success, spurred on by strong international growth. As of December 1, 2012, the company had 79 million BlackBerry users globally with only 9 million remaining in the United States.
Even as the company continued to grow worldwide, investors and media became increasingly alarmed about the company's ability to compete with devices from rival mobile operating systems iOS and Android. CNN cited BlackBerry as one of six endangered US-Canadian brands. Analysts were also worried about the company's management structure.
Following numerous attempts to upgrade its existing Java platform, the company acquired QNX Software Systems to upgrade the BlackBerry platform, centered around its recently acquired real-time operating system QNX. In March 2011, then-co-CEO Jim Balsillie suggested during a conference call that the "launch of some powerful new BlackBerrys" would be in early 2012. However, analysts were "worried that promoting the mysterious, supposedly game-changing devices too early might hurt sales of existing BlackBerrys". The initial launch date was seen in retrospect as too ambitious and hurt the company's credibility at a time when its existing aging products steadily lost market share.
On September 27, 2010, RIM announced the BlackBerry PlayBook tablet, the first product running on the new QNX platform known as BlackBerry Tablet OS. The BlackBerry PlayBook was officially released to U.S. and Canadian consumers on April 19, 2011. It was criticized for being rushed to market in an incomplete state, and sold poorly. Following the shipments of 900,000 tablets during its first three quarters on market, slow sales and inventory pileups prompted the company to reduce prices and write down the inventory value by $485 million.
Primary competition
BlackBerry's primary competitors were smartphones running Android OS, and the Apple iPhone. For a number of years, the BlackBerry was the leading smartphone in many markets, particularly the United States. The arrival of the iPhone and later Google's Android platform caused a slowdown in BlackBerry growth and a decline in sales in some markets, most notably the United States, leading to negative media and analyst sentiment over the company's ability to continue independently.When Apple's iPhone was introduced in 2007, it generated substantial media attention, with numerous media outlets calling it a "BlackBerry killer". While BlackBerry sales continued to grow, the newer iPhone grew at a faster rate. The 87% drop in BlackBerry's stock price between 2010 and 2013 was primarily attributed to the performance of the iPhone handset.
The first three iPhone models generally lagged behind the BlackBerry in sales, as RIM had major advantages in carrier and enterprise support; however, Apple continued gaining market share. In October 2008, Apple briefly passed RIM in quarterly sales when they announced they had sold 6.9 million iPhones to the 6.1 million sold by RIM, comparing partially overlapping quarters between the companies. Though Apple's iPhone sales declined to 4.3 million in the subsequent quarter and RIM's increased to 7.8 million, for some investors this was a sign of weakness. The iPhone began to sell more phones quarterly than the BlackBerry in 2010, brought on by the release of the iPhone 4.
In the United States, the BlackBerry hit its peak in September 2010, with almost 22 million users, or 37% of the 58.7 million American smartphones. BlackBerry then began to decline in use in the United States, with Apple's installed base in the United States finally passing it in April 2011. Sales of the iPhone continued to accelerate, as did the smartphone market, while the BlackBerry began to lose users continuously in the United States. By February 2016, only 1.59 million of the 198.9 million smartphone users in the United States were running BlackBerry compared to 87.32 million on an iPhone.
Google's Android mobile operating system, running on hardware by a range of manufacturers including Sony, Motorola, HTC, Samsung, LG and many others ramped up the competition for BlackBerry. In January 2010, barely 3 million of the 42.7 million Smartphones in use at the time in the United States were running Android, compared to 18 million BlackBerry devices. Within a single year Android had passed the installed base of the BlackBerry in the United States. By February 2016, only 1.59 million of the 198.9 million smartphone users in the United States were running BlackBerry compared to 104.82 million running Android.
While RIM's secure encrypted network was attractive to corporate customers, their handsets were sometimes considered less attractive to consumers than iPhone and Android smartphones. Developers often developed consumer applications for those platforms and not the BlackBerry. During 2010s, even enterprise customers had begun to adopt BYOD policies due to employee feedback. The company also faced criticism that its hardware and operating system were outdated and unappealing compared to the competition, as well as that the browsing capabilities were poorer.