From a market leader position four years ago to selling less than 12% of smartphones sold by only one competitor, Apple’s iPhone, last quarter, BlackBerry has become a victim of intense competition in the smartphone industry.
In the field of smartphone technology, the key to success is innovation. A revolutionary new model provides a comparative advantage for the short period of time it takes competitors to copy, sometimes improve, the new technology or for the patent to run out.
When BlackBerry was the only market player with a “secure global network”, the company products had a clear edge on the company’s competitors. Security, not price, was the major selling point for BlackBerry.
Major investment in R&D from competitors such as Apple led to technological advances (e.g. touchscreens), which rendered the BlackBerry products less “user friendly” and the “innovation elastic” demand for smartphones shifted in favour of Apple and Samsung.
BlackBerry believed that it had a captive market and that massive R&D investment was not necessary. It must now use its dwindling cash resources to initially bridge and surpass the technology gap that has opened up with its competitors and subsequently market its smartphones just like they once were: unique!
Article Source:
http://www.nytimes.com/2013/09/21/technology/blackberry-plans-to-cut-4500-jobs.html?_r=0
