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Blackberry’s time has passed, as will the iPhone’s – such is the way

You’ll have seen the news about BlackBerry – the once undisputed champion in communications technology – essentially putting itself up for sale this week, and may be lamenting the decline of a tech giant…

The introduction of new-look smartphones such as the Z10 has done little to lift BlackBerry’s fortunes. Moridin_

You’ll have seen the news about BlackBerry – the once undisputed champion in communications technology – essentially putting itself up for sale this week, and may be lamenting the decline of a tech giant. But dry your tears.

Such deaths are commonplace in this area of technology. Just as the iPhone muscled in and usurped a device so popular it was dubbed the Crackberry, another player – Samsung in combination with Google/Android operating system – might take down the Apple offering.

For every tech company or innovation on the way up, another market leader seems destined for irrelevance.

The Nokia N96. Gadget Virtuoso

BlackBerry’s parent company BlackBerry Ltd - a Canadian wireless and telecommunications equipment formerly known as Research in Motion (RIM) - announced it was now exploring “strategic alternatives”, following the product’s decline in popularity over recent years.

Just as we saw Nokia toppled from its once-dominant market position before the smartphone era, the BlackBerry is a product whose time was marked when Apple released the first iPhone in 2007.

The technology lifespan of products suffers from longevity problems mainly due to the need to keep innovating.

Not only do existing players find it difficult to dominate, but the pre-existng installed hardware and software base decreases their ability to quickly respond to changes in market demands.

BlackBerry’s rise

The first BlackBerry was a two-way pager device released in 1999; but it wasn’t until 2003 that the BlackBerry smartphone was introduced. It was a revolutionary device, allowing users to browse the internet, email and fax, alongside the usual text message and voice calls.

While commonplace today, providing instant access to email was groundbreaking in the early 2000s. The popularity of the BlackBerry – boosted by numerous film and television appearances – seemed unassailable.

The phone’s long-standing reputation for data security – information is encrypted using the Triple DES and AES standards – added notoriety to the device; it became the activists' handset of choice, in outbreaks such as the 2011 London riots.

The BlackBerry in a previous incarnation. arrayexception

The BlackBerry business model was built on subscribers paying a fee to connect to a centralised BlackBerry Enterprise Server. As its name suggests, the server synchronised all BlackBerry functions between connected devices within an organisation.

When the market was young, this approach allowed BlackBerry to offer an integrated solution, and to ensure the quality of its offering to its (mainly business) customers. The centralised approach also allowed BlackBerry to grow while supporting upgrades through changes to the central server.

As with all products that suffer in the technology life-cycle, the BlackBerry continued to provide for consumer needs until a new innovation - namely the Apple iPhone - supplanted it.

BlackBerry’s fall

While the centralised model originally allowed the BlackBerry to maintain market dominance and to push updates to subscribers, it would also prove to be its downfall as the market matured.

The larger a centralised system becomes, the harder it becomes to maintain and innovate new applications/features. Given this, it’s highly likely it became impossible to develop new applications for the BlackBerry in a similar timeframe to applications for newer devices.

When it emerged in 2007, the iPhone was evidently a more modern interface. It provided entertainment features that sat comfortably alongside business features, and provided a model in which third-party development of applications allowed users to extend and personalise the feature set of their devices. A locked-down central server such as BlackBerry’s meant users couldn’t personalise their devices.

The Apple iPhone 5, introduced last year. Apple/EPA

Allowing third-party software essentially requires making it fundamentally simple for anybody to develop for the device. By allowing access to others, Apple was able to shorten development time and increase innovation.

With the BlackBerry on its knees, a further blow was dealt by the recent popularity of cloud services - a network of remote rather than local servers to store and manage data - and the “internet everywhere” paradigm.

By enforcing access through a central server, BlackBerry essentially locked third-parties out of their system, restricting their customer base. It was inevitable that the BlackBerry would become usurped as king of the smartphones.

The iPhone … and beyond

If the technology lifespan is short, should we also expect to see the iPhone to be usurped by a younger, more innovative competitor? Well, yes. The Samsung Galaxy S4, which runs the Android operating system, surpassed Apple in US phone sales in May this year.

Samsung’s Galaxy S4 – in line to be the new top dog? Yonhap/AAP

Among other features, the Galaxy S4 boasts a 13-megapixel camera, expandable storage to 96 gigabytes, and eye-tracking software.

The Google-developed Android system opens up the platform to third-parties, even more-so than Apple did, thus allowing more innovation. This could land Apple in exactly the same scenario BlackBerry found itself in when the first iPhone was released.

While Apple is strongly fighting Samsung in court, in the end the only opinion that matters is that of the users.

Five years ago, nobody would have expected a phone that could function as a GPS, camera, diary, document editor and generic entertainment machine (among myriad other functions). Who could dare imagine what these devices might offer five years hence?

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14 Comments sorted by

  1. George Michaelson

    Person

    RIM peak market cap: $ 70b
    Apple market cap: $450b

    consequences for RIM of loosing market share: very dire. fatal.

    consequences for Apple: well.. they have itunes, ipad, apps, ie the market cap reflects wider company spread of incomes.

    yes, its not good. but its pretty unlikely to wipe the company out.

    20 years ago, If you had said IBM would cease to care about selling hardware and become a general services consultency to anyone in the business I know, we'd have laughed at you.

    Mind you, if you'd said Digital, and Sun would also fold, and HP would be a wreck, we'd have laughed even louder.

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    1. Jason But

      Senior Lecturer, Centre for Advanced Internet Architectures at Swinburne University of Technology

      In reply to George Michaelson

      You're right, Apple has too many fingers in other pies to be completely wiped out, but I think that they will take a massive hit if the iPhone is no longer the "phone to have"

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  2. Mike Doig

    Consultant

    It's worse when large tech firms collapse and they are based in a relatively small economy like Canada or Finland. (Not that Nokia has collapsed.)
    Canada has aleady had this problem with Nortel, which at one time was 12% of the market cap of the entire Toronto stock exchange.
    So the firm goes under, and what happens to the staff? Can they be redeployed in the domestic economy? What happens to the nation's appetite for high-tech business? What happens to investor sentiment?
    In other words, can a global tech business be sustainable while based in a small economy?

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    1. Jason But

      Senior Lecturer, Centre for Advanced Internet Architectures at Swinburne University of Technology

      In reply to Mike Doig

      That is an interesting question. I suppose it is mirrored in Australia by the "What happens to our auto manufacturing industry workers?"

      I think that as long as the business is viable, it is sustainable in a small economy. It does however put extra pressure on innovation and as we've seen with numerous tech products, innovation is harder to achieve the older the product is. Just think, when was the last time you saw one of the following products "everywhere": WordPerfect, Lotus 1-2-3, Nokia, SoundBlaster. etc..

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  3. Richard Oliver

    logged in via Facebook

    Industry leaders become quickly become too complacent, innovation is stifled, and instead of listening to users and providing them with what they want (as aspiring business have to do to success), they try and tell them what they need.

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    1. Jason But

      Senior Lecturer, Centre for Advanced Internet Architectures at Swinburne University of Technology

      In reply to Richard Oliver

      I agree, but I also think that in an established environment, it becomes harder to add "un-planned" features quickly.

      I would also re-state one of the premises of the article in that the BlackBerry relied on pure-internal development, whereas Apple allowed some external development of Software. However, their closed-wall approach to maintaining control has allowed Android to step in. With a more open environment, they can cast the net wider for innovation

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  4. Exposed To Light

    logged in via Twitter

    The title "Crackberry" did not come about because of popularity. It came about as it was the phone of choice for the discerning crack dealer.

    Blackberry's were an ugly phone. Once other manufacturers built phones that did the same thing but actually looked better people quit buying Blackberrys, for the most part.

    The iPhone does most, if not all, the other phones do and it looks awesome. The software is smooth and simple. It will not disappear.

    Me? I use a Nexus 4. Does not mean I do not see the value of an iPhone.

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    1. Jason But

      Senior Lecturer, Centre for Advanced Internet Architectures at Swinburne University of Technology

      In reply to Exposed To Light

      My understanding of the term was because people were addicted to their phones, an addiction I might add that shows no signs of slowing down if you ever observe people in a public space.

      Will the iPhone disappear? I think its main problem lies with Apple's opposition to allowing users to truly own their phones by opening it up more. Apples closed-wall mentality, enforcing which apps are available in the app store, costs to get access to developer materials, and general distrust of their users, may eventually overcome what people love about the iPhone.

      I also don't own an iPhone but do have an iPad. It is brilliant if you use it for what Apple want you to use it for. However, the iPad is a computing device that can do so much more. Why should I be restricted because Apple tells me I can't use the iPad to do what I want it to do?

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  5. James H. Hamlyn-Harris

    Senior Lecturer, Computer Science and Software Engineering at Swinburne University of Technology

    Part of the decline has to be attributed to the effectiveness of Blackberry security - the encryption of messages makes it all but impossible for government agencies and law enforcement to monitor Blackberry phones without the cooperation of the operators of the Blackberry enterprise servers through which the encrypted traffic is passed.
    Governments in the UAE, Saudi Arabia, Lebanon, Turkey, India, Kuwait and China have expressed concerns about being unable to monitor communications (for the purposes of detecting terrorism and other criminal activities). While some of these governments have reached agreements with Blackberry's owner RIM (Research in Motion) by installing appropriately tappable enterprise servers in their countries, others have banned Blackberry use, forcing businesses who operate in these countries to switch their employees over to less secure smart phones.

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    1. Jason But

      Senior Lecturer, Centre for Advanced Internet Architectures at Swinburne University of Technology

      In reply to James H. Hamlyn-Harris

      Encryption of data and privacy of communications from governments and other organisations is an increasingly important issue. If we are completely objective, we should understand that there are valid arguments for some monitoring by the government, however the perplexing question is where do we draw the line? And what approaches should be considered valid?
      Bruce Schneier talks a lot about "Security Theatre" or the art of undertaking pointless, intrusive tasks in the name of security and "seeming" to do something.
      Having said that, there is a large disconnect between what people say (we want more privacy) and what they do (witness how much personal data is made public on sites like Facebook). Sadly, it appears that people are not serious about maintaining their privacy, and that these issues will always be with us

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  6. Charlie nancarrow

    IT Guy

    You should head over to the pcauthority copy of this article where this piece of ‘journalism' is being pulled apart.

    "The Samsung Galaxy S4, which runs the Android operating system, surpassed Apple in US phone sales in May this year.”

    This is somewhat misleading.

    It should have read “for the month of may”. This article and the source also makes no mention of by how much sales were surpassed.

    Samsung did not surpass sales of the iPhone overall. They surpassed sales of the iPhone just for that month. They also had a larger growth rate for just that Month.
    The specific unit went on sale only a month earlier. Apple still had a 6.6% growth in sales.

    A larger growth rate, when you are starting from Nothing is not hard to achieve.

    There is a ridiculously larger amount of iPhones out there than Samsung Galaxy S4 units.

    Apple sold 5.5 million iPhone 5 units in 5 days, Samsung sold 10million S4 units in 30 days.

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    1. Jason But

      Senior Lecturer, Centre for Advanced Internet Architectures at Swinburne University of Technology

      In reply to Charlie nancarrow

      I don't disagree, it is obvious that the iPhone is not going anywhere yet, however it is also possible that the turning point has just been reached. BlackBerry hit its turning point when the iPhone was released, yet it managed to keep running as a viable business for many years after that, the downward path is not necessarily abrupt.
      I do own an iPad, and lament the restrictiveness Apple have placed on what I can do with the device. If the Samsung/Google solution offers a way around this restrictiveness, AND Apple don't respond, THEN I can see the downward trend continuing.
      Just like all products, eventually they see an end to popularity and are supplanted by something better, in the tech space this happens not only more frequently, but more rapidly as well. The iPhone will eventually die, whether the Samsung/Android is the product that signals the start of the end is not yet clear but it may turn out to be true

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  7. John Whelan

    logged in via Facebook

    Not only will the Blackberry disappear but so will its maker. There is no reasonable certainty that will happen to iPhone any time soon or indeed Apple with over $100 billion in cash reserves and an extremely profitable product lineup.

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    1. Jason But

      Senior Lecturer, Centre for Advanced Internet Architectures at Swinburne University of Technology

      In reply to John Whelan

      I don't think Apple will disappear entirely, as you say they do have other products in their lineup which are turning a profit. This is a different with RIM which essentially was a single product company.
      Yet the iPhone is an iconic product, so was the Blackberry. As I mentioned above Apple may still respond to the Samsung/Google attack on the iPhone. Whether this response maintains the premier status of the iPhone remains to be seen.

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