tag:theconversation.com,2011:/ca/topics/blackberry-1202/articlesBlackBerry – The Conversation2021-01-29T14:29:14Ztag:theconversation.com,2011:article/1542842021-01-29T14:29:14Z2021-01-29T14:29:14ZGameStop: hedge fund attacks have opened up powerful new front against Wall Street<figure><img src="https://images.theconversation.com/files/381360/original/file-20210129-21-18iwj6c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Wall Street under attack. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/new-york-city-ny-oct-11-240264190">Javen</a></span></figcaption></figure><p>In the dying days of 2009, Rage Against the Machine <a href="https://www.rollingstone.com/music/music-news/rage-against-the-machine-win-u-k-christmas-single-battle-187249/">achieved the</a> unlikeliest of Christmas number ones with a re-release of their anti-establishment anthem Killing in the Name. This was driven by an online campaign to give a great festive bloody nose to Simon Cowell, whose latest X-Factor winner was denied their routine annual spot at the top of the charts. </p>
<p><a href="https://journals.equinoxpub.com/PMH/article/view/14455">That protest</a> against a creatively bankrupt mainstream pop media became a case study in the power of an online crowd with a strong narrative. It finds echoes today in a very different arena: the current attack on Wall Street hedge funds by retail traders via the Reddit forum r/WallStreetBets. </p>
<p>When exchanges opened in the New Year, shares in GameStop, a Texas-based chain of computer games stores, were swapping hands at US$19 (£14) each. By the close on Tuesday January 26 they were worth US$347 – an increase of over 1,700%. </p>
<p><strong>GameStop price action</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/381357/original/file-20210129-23-1clw92k.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="The GameStop share price chart" src="https://images.theconversation.com/files/381357/original/file-20210129-23-1clw92k.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/381357/original/file-20210129-23-1clw92k.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=327&fit=crop&dpr=1 600w, https://images.theconversation.com/files/381357/original/file-20210129-23-1clw92k.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=327&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/381357/original/file-20210129-23-1clw92k.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=327&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/381357/original/file-20210129-23-1clw92k.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=411&fit=crop&dpr=1 754w, https://images.theconversation.com/files/381357/original/file-20210129-23-1clw92k.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=411&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/381357/original/file-20210129-23-1clw92k.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=411&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://uk.tradingview.com/chart/?symbol=NYSE%3AGME">TradingView</a></span>
</figcaption>
</figure>
<p>Driven by a David v Goliath <a href="https://www.theguardian.com/commentisfree/2021/jan/28/anarchy-in-jokes-and-trolling-the-gamestop-fiasco-is-4chan-think-in-action">narrative of revenge</a> against previously untouchable Wall Street <a href="https://www.marketwatch.com/story/reddit-moderator-slams-wall-street-fat-cats-as-gamestop-surge-continues-they-hate-that-you-played-by-the-rules-and-still-won-11611600048">“fat cats”</a>, the surge was coordinated by the <a href="https://www.reddit.com/r/wallstreetbets/">almost 5 million members</a> of WallStreetBets, using apps like Robinhood that allow anyone to trade financial securities and derivatives for little or zero commission fees. <a href="https://www.reddit.com/r/wallstreetbets/comments/l7ly4a/people_are_risking_their_lives_to_wage_war/">In the words</a> of one of these traders: </p>
<blockquote>
<p>People are risking their lives to wage war against the suits and it brings tears to my eyes to watch them do it.</p>
</blockquote>
<h2>Beaten at their own game</h2>
<p>This produced <a href="https://www.bloomberg.com/news/articles/2021-01-25/gamestop-short-sellers-reload-bearish-bets-after-6-billion-loss">an estimated US$6 billion</a> in stinging losses for hedge funds and activists “short selling” GameStop shares. <a href="https://theconversation.com/why-gamestop-shares-stopped-trading-5-questions-answered-154255">Short selling</a> is a bet on stock prices going down, and is done by borrowing shares, selling them, and then buying them back later to return to the lender – hopefully at a reduced price. </p>
<p>Critics argue that hedge funds that engage in short selling have an incentive to push down prices in questionable ways, such as spreading negative rumours about the company’s future. The practice was <a href="https://www.ft.com/content/f59fdd00-93b0-11dd-9a63-0000779fd18c">blamed to some extent</a> for major financial institutions going into freefall during the global financial crisis in 2008. </p>
<p>By buying GameStop to hurt those with short positions, retail investors employed a classic Wall Street tactic that hedge funds use against one another. Buying enough shares to cause the price to surge forces short-selling hedge funds to buy back the borrowed shares at a higher price to cover their positions, which in turn pushes the price higher. In Wall Street parlance, it’s the “<a href="https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/short-squeeze/">short squeeze</a>”.</p>
<p>Hedge funds like Melvin Capital had to swallow soaring losses as the share price hit certain levels and triggered “margin calls” where they had to immediately repay their lenders. Melvin only survived thanks to a <a href="https://www.bloomberg.com/news/articles/2021-01-25/citadel-point72-to-invest-275-billion-in-melvin-capital">cash injection</a> of US$2.8 billion from other hedge-fund backers. </p>
<p>In previous years, such an attack would have been quickly swept aside by the larger firepower of hedge funds and established Wall Street institutions. Activist short sellers also kept the lid on things by publishing damning research on targeted firms. <a href="https://www.tandfonline.com/doi/abs/10.1080/1351847X.2017.1288647">Our study from 2017</a> demonstrated that a short-seller thesis can almost instantaneously affect online message board sentiment and send investors fleeing. </p>
<p>The difference now is retail investors’ much better access to the financial markets, swelling their numbers and their ability to collectively move prices. <a href="https://www.businessofapps.com/data/robinhood-statistics/">The number of users</a> on Robinhood has increased from 500,000 in 2014 to 13 million in 2020, and <a href="https://www.cnbc.com/2020/05/21/many-americans-used-part-of-their-coronavirus-stimulus-check-to-trade-stocks.html">trading stocks is</a> the most common use for the US government pandemic stimulus cheques in almost every age bracket. </p>
<h2>The empire strikes back</h2>
<p>Robinhood and other trading platforms <a href="https://techcrunch.com/2021/01/28/robinhood-users-say-its-restricting-trades-after-the-gamestop-brouhaha-shakes-markets/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAKVZoI-2xGukI5bpebZ1sL5B_FiIUxeOfT093ha7bDkyXigvWCgZFHvsERADuQ8cc7S4QJ304tzjWBI63Q1DfRzGaAJ9Rv-pfMNmE7dKWO6kXdJX1lhPnTpZsWtZGG2XPt9IgkC8AWX1InzghEYhXbGNEYDwoXXOjBL19Tdv8oh4">banned trading in GameStop shares</a> around the time they peaked, sparking outrage at a perceived “rigged” game tilted towards the big players. Both <a href="https://twitter.com/tedcruz/status/1354833603943931905">Democratic and Republican senators have condemned</a> this decision to block retail investors while hedge funds can continue to trade. The platforms <a href="https://www.ft.com/content/9a1b24e6-0433-462a-a860-c2504ea565e4">claim they had to</a> impose temporary suspensions to protect their own financial positions from the risk of targeted stocks tumbling and retail traders who have borrowed to maximise their buying power suddenly racking up losses they can’t afford to cover. </p>
<p>The debate over how regulators should respond to this conflict is meanwhile intensifying, raising the prospect of new rules that discriminate against retail investors. That could fatally undermine trust in the regulators, since they would effectively be saying it’s alright for Wall Street to employ short squeezes but not the little guys. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/381358/original/file-20210129-21-1a6nqdr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="WallStreetBets on Reddit on a smartphone" src="https://images.theconversation.com/files/381358/original/file-20210129-21-1a6nqdr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/381358/original/file-20210129-21-1a6nqdr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/381358/original/file-20210129-21-1a6nqdr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/381358/original/file-20210129-21-1a6nqdr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/381358/original/file-20210129-21-1a6nqdr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/381358/original/file-20210129-21-1a6nqdr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/381358/original/file-20210129-21-1a6nqdr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">You betcha.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/wallstreetbets-reddit-group-seen-on-smartphone-1904689579">mundissima</a></span>
</figcaption>
</figure>
<p>Either way, these events have brought issues to the fore that regulators would have needed to address further down the road anyway, since the trading game has clearly changed in the last couple of years. For example, one new danger is an unfriendly foreign country feeding “fake news” into social media to enrage retail investors about perceived unfairnesses, which galvanises them into attacks that prevent the markets from working efficiently. </p>
<p>After all, some would argue that short sellers are unfairly portrayed as villains in this David v Goliath battle. <a href="https://www.sciencedirect.com/science/article/pii/S0304405X01000563?casa_token=u4L2JAt7vZoAAAAA:eCkMlssnABzzZ14XO98rEdW2XQNpll_IN0SURLvhRw2S2amdPR5ougSaq_Z2K8_bcKn98wfx">They help</a> to <a href="https://www.economist.com/leaders/2020/06/24/wirecards-scandal-shows-the-benefits-of-short-sellers">keep markets liquid</a> by making share purchases easier for those who do want to buy a particular stock, and they can put a spotlight on companies that are <a href="https://academic.oup.com/rfs/article-abstract/28/6/1701/1610243">poorly managed</a>, <a href="https://repositories.lib.utexas.edu/handle/2152/74990">dishonest</a>, or <a href="https://journals.sagepub.com/doi/full/10.1177/0148558X17748524?casa_token=ccIf5rD3WD4AAAAA%3AcfVd7JdLyEBBTcoxNQk1ayEKZkU-qZoMoxcmmamMbH3rwIwXiNxKSsqXrMLNSil4XzAWTzpWaPU">engaged in poor corporate governance</a>.</p>
<p>As a <a href="https://www.nytimes.com/2017/06/08/magazine/the-bounty-hunter-of-wall-street.html">New York Times profile</a> of notorious short-seller Andrew Left states, “In a town with a dozing sheriff, vigilantes become the agents of order.” Left’s fund, Citron Capital, <a href="https://markets.businessinsider.com/news/stocks/citron-gamestop-reddit-short-position-covered-loss-reddit-andrew-left-2021-1-1030009872">made a 100% loss</a> on its short position in GameStop. </p>
<p>So how should the regulators play this? They may not want to curb investor discussion in online communities, even if it were possible, or try and set parameters about constitutes “manipulation” and “honest discussion” of a particular stock. One option might be to increase their monitoring capacity, perhaps through some kind of early-warning system based on the volume of online chatter and the sentiment being expressed. They could feed this information to the trading platforms to let them take a view on temporarily limiting trading on those securities. </p>
<h2>I won’t do what you tell me …</h2>
<p>Nobody knows how the present situation will end. The intense activity by retail investors could prompt a wider sell-off by forcing hedge funds with short positions to sell other shares to raise the cash to cover their losses. This could hurt companies and investors that were only spectators in this battle, with potentially far-reaching consequences. </p>
<p>For those worried about the potential for chaos, Rage Against the Machine might offer a crumb of comfort. Since that Christmas number one, numerous attempts to achieve a similar feat have been less successful. The collective action was diluted by the sheer number of copycat campaigns. </p>
<p>Similarly, we have seen campaigns by traders launched against Blackberry and AMC Entertainment, and there are rumours of a similar strategy being employed against American Airlines. Whether they reach similar levels as GameStop remains to be seen. </p>
<p>Either way the crowd will regroup, and regulators will need to learn valuable lessons from this episode. Having shown what a crowd of renegade investors can achieve, this could well have opened up a powerful new front in anti Wall Street activism.</p><img src="https://counter.theconversation.com/content/154284/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The question is if and how the regulators can respond.James Bowden, Lecturer in Financial Technology, University of Strathclyde Edward Thomas Jones, Lecturer in Economics, Bangor UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/946402018-04-09T22:40:05Z2018-04-09T22:40:05ZMade by humans: A recipe for innovation<figure><img src="https://images.theconversation.com/files/213925/original/file-20180409-114112-33r0ge.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Prime Minister Justin Trudeau participates in an armchair discussion highlighting the federal budget's investments in Canadian innovation at the University of Ottawa in March 2018.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Justin Tang</span></span></figcaption></figure><p>Innovation doesn’t just happen — it is designed by humans for humans. </p>
<p>While economists discuss new theories, scientists develop new technologies and industrialists exploit new markets, the process of innovation is first and foremost socially constructed. To navigate its complex and risky path requires courage and knowledge — courage to learn the recipe, and knowledge of the techniques. </p>
<p>The innovation conversation is happening everywhere. Inside boardrooms, at cafés and in government offices, many people talk about it. But few are doing it and for those who are doing it, even fewer are doing it well. Like high-school sex, some education is required. </p>
<p>So where and how do we learn to innovate? Our parents can’t teach us. Our bosses are trying to learn alongside us. Even post-secondary courses only provide us with rudimentary frameworks and passive business cases. If innovation is a dynamic process, how can we learn to “do it” safely and empathetically?</p>
<p>There’s no question the innovation process is complicated. Its complexity stems from the many interactions between humans with diverse backgrounds, mental models, systems and ranks. It involves organizational cultures, economic climates and egos. </p>
<p>So how might we learn a process that fundamentally signals uncertainty, ambiguity and risk inside our companies? By admitting it is something that can and must be learned. </p>
<h2>Innovate or die</h2>
<p>Organizations that don’t keep up with their customers’ needs will die. This provocative and incentivizing statement has led many firms to dive into the innovation process. </p>
<p>Unfortunately, most jump in without first asking why, how or what they are seeking to change. Asking the right question at the right time is critical to succeed at innovation adoption.</p>
<p>Consider the following: Are you seeking to change what you offer to your customers (e.g. product/service innovation)? Are you wanting to change how you operate or organize yourself to design and deliver a new offering (e.g. process innovation)? Are you eager to change where and who consumes your innovation (e.g. positioning innovation)? Or are you feeling forced or intuitively seeking to change the <em>why</em> in your current practice or business model (e.g. paradigm or cultural innovation)?</p>
<p>By first asking these questions, organizations begin with a clear context from which to adjust the recipe as needed. </p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/213932/original/file-20180409-114112-1w90amx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/213932/original/file-20180409-114112-1w90amx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/213932/original/file-20180409-114112-1w90amx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/213932/original/file-20180409-114112-1w90amx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/213932/original/file-20180409-114112-1w90amx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=498&fit=crop&dpr=1 754w, https://images.theconversation.com/files/213932/original/file-20180409-114112-1w90amx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=498&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/213932/original/file-20180409-114112-1w90amx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=498&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A man walks past a company sign at a Nortel Networks office tower in Toronto in February 2009. THE CANADIAN PRESS/Nathan Denette.</span>
</figcaption>
</figure>
<p><a href="https://www.theglobeandmail.com/report-on-business/a-tale-of-toxicity-the-real-culprit-in-nortels-collapse/article7379114/">Nortel is one infamous Canadian company</a> that suffered an untimely death. </p>
<p>Findings from University of Ottawa researchers on the dramatic rise and fall of Nortel point to its failure to foster a resilient culture. <a href="http://www.cbc.ca/news/business/nortel-failed-amid-culture-of-arrogance-1.2582136">Their study</a> highlights the company’s neglect of its customers and the inflexibility of management to adapt to a new environment. </p>
<p><a href="https://ca.blackberry.com/">Canada’s technology darling, Blackberry</a>, initially showed innovative promise by launching a mobile device and system that would be used across boardrooms and college dorms. Then, without an internal process and prioritization on understanding changing consumer needs, <a href="https://www.theglobeandmail.com/report-on-business/the-decline-and-fall-of-canadas-global-corporate-superstars/article13822902/">it faced a new competitor</a> called Apple’s iPhone. Enough said. </p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/213934/original/file-20180409-114116-16clpxb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/213934/original/file-20180409-114116-16clpxb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=319&fit=crop&dpr=1 600w, https://images.theconversation.com/files/213934/original/file-20180409-114116-16clpxb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=319&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/213934/original/file-20180409-114116-16clpxb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=319&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/213934/original/file-20180409-114116-16clpxb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=401&fit=crop&dpr=1 754w, https://images.theconversation.com/files/213934/original/file-20180409-114116-16clpxb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=401&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/213934/original/file-20180409-114116-16clpxb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=401&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A Canadian flag flies at BlackBerry’s headquarters in Waterloo, Ont., in July 2013.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Geoff Robins</span></span>
</figcaption>
</figure>
<p>Governments, like corporations, must respond to customer or voter needs. Vancouver’s municipal government is currently engaging in service innovation through a collaborative <a href="http://www.citystudiovancouver.com/">initiative called City Studio</a>. Through co-creative city planning projects with municipal staff, students and the greater Vancouver community, user needs are identified and embedded into proposed solutions. </p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/213938/original/file-20180409-114098-10c7ycp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/213938/original/file-20180409-114098-10c7ycp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/213938/original/file-20180409-114098-10c7ycp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/213938/original/file-20180409-114098-10c7ycp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/213938/original/file-20180409-114098-10c7ycp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/213938/original/file-20180409-114098-10c7ycp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/213938/original/file-20180409-114098-10c7ycp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Canada Goose jackets are seen in this 2013 photo. THE CANADIAN PRESS/Aaron Vincent Elkaim.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Aaron Vincent Elkaim</span></span>
</figcaption>
</figure>
<p><a href="https://www.canadagoose.com/ca/en/home-page">Canada Goose</a> is flexing its innovative prowess by leveraging its positioning of Canadian-made coats and <a href="https://www.entrepreneur.com/article/241286">growing demand</a> from a global marketplace. Moving forward, however, the company will have to consider how to maintain production costs and profits through supply-chain process innovation. </p>
<h2>The basic recipe for innovation</h2>
<p>From extensive field and desk research on innovation process models, we can reduce the process into key components or ingredients.</p>
<p>The process typically begins with a perceived need or problem, then involves researching the need or problem, moves to testing and developing the framing of the need or problem, and finally into making decisions on how best to solve that need or problem and bringing that problem-solving idea to market.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/213947/original/file-20180409-114121-1pur38s.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/213947/original/file-20180409-114121-1pur38s.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=80&fit=crop&dpr=1 600w, https://images.theconversation.com/files/213947/original/file-20180409-114121-1pur38s.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=80&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/213947/original/file-20180409-114121-1pur38s.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=80&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/213947/original/file-20180409-114121-1pur38s.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=101&fit=crop&dpr=1 754w, https://images.theconversation.com/files/213947/original/file-20180409-114121-1pur38s.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=101&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/213947/original/file-20180409-114121-1pur38s.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=101&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Innovation Process Recipe.</span>
<span class="attribution"><a class="source" href="https://www.freepik.com/free-icons/food">Freepik</a></span>
</figcaption>
</figure>
<p><strong>Directions:</strong> </p>
<ol>
<li><p>Ask yourself what you need to change. (Product, service, position?)</p></li>
<li><p>Gather a team that represents all key stakeholders for that change across functions, systems and markets (your key ingredients)</p></li>
<li><p>Prepare an innovation intent framework that is part <em>need-finding</em>, part <em>problem-framing</em> and part <em>problem-solving</em>.</p></li>
<li><p>Collect and combine need-finding data, then form insights. </p></li>
<li><p>Wrap your insights into problem-framing ideas (prototypes) and let stand until all stakeholders have had a chance to reflect.</p></li>
<li><p>Whisk customer feedback into prototype mixture.</p></li>
<li><p>Prepare final prototype for implementation.</p></li>
<li><p>Bake innovation and test for rejection or adoption.</p></li>
<li><p>Save your recipe and continue to experiment with new ingredients. </p></li>
</ol>
<h2>The innovation techniques</h2>
<p>To learn the recipe for innovation, you must be ready and willing to engage and practise with diverse techniques, based on your “innovation” output (e.g. product, process, culture, etc.). </p>
<p>Innovation techniques range from <a href="http://designresearchtechniques.com/#/">agile qualitative and quantitative research methods</a> to popular <a href="http://dstudio.ubc.ca/">design thinking tools and strategic frameworks</a>. </p>
<p>If Canada wants to improve its innovative capacity and develop <a href="https://www.budget.gc.ca/2017/docs/themes/Innovation_en.pdf">“innovation-ready citizens,”</a> it needs to acknowledge the lack of innovation literacy and actively support the best practices in teaching and learning of the innovation process.</p>
<p>Developing a corporate and individual creative confidence will ensure Canadians survive new economic cycles. It begins with a basic recipe, crafted by humans and with repeated practice.</p><img src="https://counter.theconversation.com/content/94640/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Angele Beausoleil does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Where and how do we learn to innovate? Our parents can’t teach us. Our bosses are trying to learn alongside us. Even post-secondary courses only provide us with the basics. Follow this recipe.Angele Beausoleil, Assistant Professor Teaching Stream, Business Design and Innovation, University of TorontoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/823062017-08-17T23:03:14Z2017-08-17T23:03:14ZWorth reading: Bitcoin, BlackBerry, time travel and other outcomes<figure><img src="https://images.theconversation.com/files/182500/original/file-20170817-28160-zg3tnr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p><em>Editor’s note: The Conversation Canada asked our academic authors to share some recommended reading. In this instalment, Joshua Gans, an economist who wrote about how an <a href="https://theconversation.com/energy-fuels-star-trek-economy-78484">energy revolution will transform the economy and our lives</a>, offers up new picks along with a few of his favourite books.</em> </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/182488/original/file-20170817-10986-67igt9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/182488/original/file-20170817-10986-67igt9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/182488/original/file-20170817-10986-67igt9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=925&fit=crop&dpr=1 600w, https://images.theconversation.com/files/182488/original/file-20170817-10986-67igt9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=925&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/182488/original/file-20170817-10986-67igt9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=925&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/182488/original/file-20170817-10986-67igt9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1163&fit=crop&dpr=1 754w, https://images.theconversation.com/files/182488/original/file-20170817-10986-67igt9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1163&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/182488/original/file-20170817-10986-67igt9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1163&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"><em>Before Babylon, Beyond Bitcoin</em> by David Birch.</span>
<span class="attribution"><span class="source">Handout</span></span>
</figcaption>
</figure>
<h2><a href="https://www.goodreads.com/book/show/35480869-before-babylon-beyond-bitcoin"><em>Before Babylon, Beyond Bitcoin</em></a></h2>
<p>By David Birch (Non-fiction. Hardcover, 2017. London Publishing Partnership)</p>
<p>David Birch’s previous book, <a href="https://www.goodreads.com/book/show/22227908-identity-is-the-new-money"><em>Identity is the New Money</em></a>, was fantastic in the way it drew a relationship between the money you have and your identity in society. This follow-up includes an analysis of <a href="https://www.google.com/search?q=cryptocurrency">cryptocurrencies</a> such as <a href="https://bitcoin.org/en/faq#what-is-bitcoin">Bitcoin</a>. Money is a deeper issue than many economists appreciate. Indeed, it is something economists ignore by assumption: Money sits in the background without an impact itself on real economic decisions. That’s why I always value alternative perspectives that make me think. I’m looking forward to reading this one but it will have to wait until I have a good chunk of time to get the most out of it. </p>
<p> </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/182495/original/file-20170817-2389-1tz4tau.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/182495/original/file-20170817-2389-1tz4tau.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/182495/original/file-20170817-2389-1tz4tau.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=906&fit=crop&dpr=1 600w, https://images.theconversation.com/files/182495/original/file-20170817-2389-1tz4tau.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=906&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/182495/original/file-20170817-2389-1tz4tau.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=906&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/182495/original/file-20170817-2389-1tz4tau.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1139&fit=crop&dpr=1 754w, https://images.theconversation.com/files/182495/original/file-20170817-2389-1tz4tau.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1139&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/182495/original/file-20170817-2389-1tz4tau.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1139&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"><em>Losing the Signal</em> by Jacquie McNish and Sean Silcoff.</span>
<span class="attribution"><span class="source">Handout</span></span>
</figcaption>
</figure>
<h2><a href="https://www.goodreads.com/book/show/25602451-losing-the-signal"><em>Losing the Signal</em></a></h2>
<p>By Sean Silcoff and Jacquie McNish (Non-fiction. Hardcover, 2015. Flatiron Books.)</p>
<p>This book, written by two Canadian journalists, is the definitive business history of BlackBerry, maker of what was once a must-have namesake smartphone. It traces the history of the Canadian technology giant’s “extraordinary rise and spectacular fall,” to quote the subtitle. For example, the book offers unparalleled insight into how disruption can be caused by internal decisions. I believe it’s a must-read for anyone seeking to understand disruption and why successful firms fail. </p>
<p> </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/182489/original/file-20170817-28160-1aqx0ym.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/182489/original/file-20170817-28160-1aqx0ym.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/182489/original/file-20170817-28160-1aqx0ym.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=945&fit=crop&dpr=1 600w, https://images.theconversation.com/files/182489/original/file-20170817-28160-1aqx0ym.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=945&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/182489/original/file-20170817-28160-1aqx0ym.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=945&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/182489/original/file-20170817-28160-1aqx0ym.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1187&fit=crop&dpr=1 754w, https://images.theconversation.com/files/182489/original/file-20170817-28160-1aqx0ym.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1187&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/182489/original/file-20170817-28160-1aqx0ym.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1187&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"><em>On Intelligence</em> by Jeff Hawkins.</span>
<span class="attribution"><span class="source">Handout</span></span>
</figcaption>
</figure>
<h2><a href="https://www.goodreads.com/book/show/27539.On_Intelligence"><em>On Intelligence</em></a></h2>
<p>By Jeff Hawkins with Sandra Blakeslee (Non-fiction. Hardcover, 2004. St. Martin’s Press.)</p>
<p><a href="https://www.ted.com/talks/jeff_hawkins_on_how_brain_science_will_change_computing">Jeff Hawkins</a> is the inventor of the PalmPilot electronic assistant that made a pocket computer an essential personal tool and paved the way for the BlackBerry, iPhone and other mobile computers. His book is 13 years old but has <a href="https://www.wired.com/brandlab/2015/05/jeff-hawkins-firing-silicon-brain/">new relevance</a> as its central thesis — that intelligence is all about predictive ability — is now at the centre of the recent explosion in machine learning and artificial intelligence.</p>
<p> </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/180245/original/file-20170728-23788-7gyilq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/180245/original/file-20170728-23788-7gyilq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/180245/original/file-20170728-23788-7gyilq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=905&fit=crop&dpr=1 600w, https://images.theconversation.com/files/180245/original/file-20170728-23788-7gyilq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=905&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/180245/original/file-20170728-23788-7gyilq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=905&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/180245/original/file-20170728-23788-7gyilq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1138&fit=crop&dpr=1 754w, https://images.theconversation.com/files/180245/original/file-20170728-23788-7gyilq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1138&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/180245/original/file-20170728-23788-7gyilq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1138&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"><em>All Our Wrong Todays</em> by Elan Mastai.</span>
<span class="attribution"><span class="source">Handout</span></span>
</figcaption>
</figure>
<h2><a href="https://www.goodreads.com/book/show/27405006-all-our-wrong-todays"><em>All Our Wrong Todays</em></a></h2>
<p>By Elan Mastai (Fiction. Hardcover, 2017. Doubleday Canada.)</p>
<p>An interesting time travel journey wrapped up in a family drama where consequences remain consequences. It is also mostly set in Toronto, making it nicely familiar for Canadian readers. One of the things I appreciated about this book is that it deals with a big time travel problem: How can you go back in time and end up in the same physical place you started when the Earth is always moving through space — on its axis, around the sun, in the solar system, in the Milky Way — while the galaxy itself is moving through the universe? That alone makes <em>All Our Wrong Todays</em> more thoughtful than the usual offerings on this subject. [<em>Editor’s note: <a href="https://theconversation.com/worth-reading-future-visions-of-women-war-time-and-space-81658">Bryan Gaensler also recommended</a> this book in his reading list.</em>] </p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/182504/original/file-20170817-28151-1bmfkdu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/182504/original/file-20170817-28151-1bmfkdu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=925&fit=crop&dpr=1 600w, https://images.theconversation.com/files/182504/original/file-20170817-28151-1bmfkdu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=925&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/182504/original/file-20170817-28151-1bmfkdu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=925&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/182504/original/file-20170817-28151-1bmfkdu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1163&fit=crop&dpr=1 754w, https://images.theconversation.com/files/182504/original/file-20170817-28151-1bmfkdu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1163&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/182504/original/file-20170817-28151-1bmfkdu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1163&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<h2><a href="https://www.goodreads.com/book/show/703.The_Plot_Against_America"><em>The Plot Against America</em></a></h2>
<p>By Philip Roth (Fiction. Hardcover, 2004. Knopf Doubleday Publishing Group.)</p>
<p>An alternative history in which <a href="https://www.biography.com/people/charles-lindbergh-9382609">Charles Lindbergh</a>, the famous aviator, wins the presidency in 1940 and keeps the United States out of the Second World War. Suffice to say, for anyone living in 2016 and 2017 observing U.S. politics today, there is something chilling about this book given that Roth wrote it a decade ago. You will recognize the trends and concerns that perhaps make up the American mindset that leave its democracy vulnerable to populism.</p><img src="https://counter.theconversation.com/content/82306/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joshua Gans has received funding from the Sloan Foundation.</span></em></p>The future and the past, money, technology and politics documented and imagined in fact and fiction, in an economist’s recommended reading.Joshua Gans, Professor of Strategic Management, University of TorontoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/786622017-06-29T00:02:34Z2017-06-29T00:02:34ZHow brands turn customers into devoted followers<figure><img src="https://images.theconversation.com/files/173896/original/file-20170614-22797-eyf9iv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Firms like Apple inspire their customers to evangelize for their products</span> <span class="attribution"><span class="source">(AP Photo/Eugene Hoshiko)</span></span></figcaption></figure><p>Many consumers like the products they buy, but some people go beyond liking. They actively advocate for the companies and concepts behind those products.</p>
<p>Think of Apple Inc. and its trendsetting iPhones, celebrating their ninth anniversary in Canada on July 11. The phones are certainly high-quality. But many consumers, bloggers and media critics have also long raved about the firm itself and its overall design approach. Those “evangelists” don’t work for Apple, but voluntarily endorse it and its entire product line.</p>
<p>By comparison, other cell phone companies rarely inspire such devotion. People might like individual phone models, but don’t connect much to the manufacturer behind them.</p>
<p>Many firms would love to see such enthusiasm among their customers, reviewers and retailers. But how can they create these external evangelists?</p>
<p>A <a href="http://amj.aom.org/content/60/2/461.abstract">study</a> at our business school explored this question by examining <a href="https://winecountryontario.ca/">Ontario wineries</a>. Most of these wineries are small and have limited marketing budgets. Nonetheless, they have instilled devotion among commentators and consumers for their cool-climate wines.</p>
<h2>Akin to religious conversion</h2>
<p>This success is partly due to grape and wine <a href="http://www.vqaontario.ca/">quality</a> improvements over recent decades. But high quality alone is not enough to inspire evangelism.</p>
<p>The researchers started by observing customer-related activities at the wineries. They also interviewed people who were external to the wineries but involved with their products. Examples include reviewers, retailers, and restaurateurs. The study examined how their views and relationships with wineries evolved over a five-year period.</p>
<p>The research revealed that evangelism develops much like religious conversion (perhaps fittingly, given wine’s <a href="https://theconversation.com/let-us-adore-and-drink-a-brief-history-of-wine-and-religion-35308">historical association with religion</a>).</p>
<p>The process begins when wineries host events involving customers and other participants. Examples include vineyard tours and wine tastings.</p>
<p>These events proceed like religious rituals. They involve participants in ceremonial procedures, like the sequence of steps involved in wine tasting. They feature symbolic objects, like the special glasses and <a href="https://theconversation.com/lost-in-the-wine-aisle-winemakers-want-to-know-which-labels-will-catch-your-eye-35084">descriptive labels</a> used with different wine types.</p>
<h2>Emotional responses</h2>
<p>These rituals also include evocative storytelling and social interaction. One set of rituals emphasizes the guilty pleasures of enjoying wine. A second set emphasizes the wines’ history and production methods. They describe the traditions of their family and region. Often, they trace their history back to the “old country” in Europe. A third set of rituals emphasizes the prestige the wineries have garnered as they increasingly produce world-class wines.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/172321/original/file-20170605-16853-ocefif.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/172321/original/file-20170605-16853-ocefif.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=799&fit=crop&dpr=1 600w, https://images.theconversation.com/files/172321/original/file-20170605-16853-ocefif.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=799&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/172321/original/file-20170605-16853-ocefif.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=799&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/172321/original/file-20170605-16853-ocefif.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1004&fit=crop&dpr=1 754w, https://images.theconversation.com/files/172321/original/file-20170605-16853-ocefif.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1004&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/172321/original/file-20170605-16853-ocefif.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1004&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Prince Charles breathes in a glass of Ontario wine as he tours a winery in Niagara-on-the-Lake, Ont., in 2009.</span>
<span class="attribution"><span class="source">(THE CANADIAN PRESS/Nathan Denette)</span></span>
</figcaption>
</figure>
<p>During these rituals, some participants experience emotional responses. They feel joy at being part of pleasurable events with other happy people. They are impressed by the complexity of wine. They find it eyeopening to learn how to taste the differences among various wine types. They also admire the effort that winemakers put into their craft in pursuit of perfection.</p>
<p>Those responses connect participants emotionally to each other, to winemakers and to the wine itself. These people become evangelists. They subsequently promote wines and the wine-making region. For them, wine has become more than what’s in the bottle.</p>
<p>Interestingly, certain participants are more prone to such conversion. For example, some people see themselves as “foodies” or “wine aficionados.” Others strongly identify with Ontario or its wine-making regions. Both groups are more likely to react emotionally and become evangelists.</p>
<h2>Not everyone buys in</h2>
<p>Conversely, evangelism is less likely among those who see themselves as simple consumers. They just want a tasty wine at a reasonable price. It also occurs less among people with strong professional identities, like quality control inspectors. They see the rituals as mere marketing exercises.</p>
<p>You can see similar elements in play with Apple. Its consumers and promoters are often described as <a href="https://www.chapters.indigo.ca/en-ca/books/cult-of-mac/9781886411838-item.html?ikwid=cult+of+mac&ikwsec=Home&ikwidx=0">cult-like</a>. Its ethereal stores are like shrines, and <a href="https://theconversation.com/steve-jobs-film-a-welcome-re-imagining-of-the-iconic-apple-leader-50275">Steve Jobs</a> was its charismatic but demanding high priest (a segment in <a href="https://www.youtube.com/watch?v=G2GfKUi9ghM">The Simpsons</a> television show highlighted this quasi-religious view). Some Apple ads don’t even mention its products. Instead, they emphasize its role in <a href="https://www.youtube.com/watch?v=M-1GPznHrrM">customer lifestyles</a>.</p>
<p>The research also suggests that evangelism is more likely when firms provide authentic experiences for participants. This authenticity helps create the emotional responses and mutually supportive relationships. The desired responses won’t occur if consumers view the rituals as artificial add-ons.</p>
<p>To support this process, some tech companies now have “<a href="https://www.forbes.com/sites/theopriestley/2015/08/28/why-every-tech-company-needs-a-chief-evangelist/#247712b73422">Chief Evangelists</a>” alongside their marketing departments. They serve as ministers to promote their companies’ practices to external audiences.</p>
<h2>Size is no guarantee</h2>
<p>Businesses don’t need to be large or wealthy to inspire evangelism. The key is the ability to create authentic relationships. For example, <a href="http://maximvoronov.net/wp-content/uploads/2016/06/Canadian-Whisky-White-Paper.pdf">Canadian whisky distilleries</a> are generally much larger and wealthier than Ontario wineries. But those distillers have not been nearly as successful at inspiring evangelism.</p>
<p>However, even successful evangelism does not guarantee enduring success. Look at <a href="https://theconversation.com/who-wants-a-blackberry-these-days-millions-in-africa-and-asia-36685">Blackberry</a>, previously called Research In Motion. Its email-oriented devices with their physical keypads once inspired such devotion among business professionals that they were dubbed “crack-berry” addicts.</p>
<p>But Apple’s touchscreen iPhones expanded smartphones’ appeal beyond business email. They attracted more customers and enabled more uses. The new religion consequently overtook the old one. And now, it’s Apple that faces <a href="https://theconversation.com/apple-is-losing-the-innovation-game-it-cant-trap-users-anymore-65094">threats</a> from the ongoing evolution of technology.</p><img src="https://counter.theconversation.com/content/78662/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Maxim Voronov receives funding from Social Sciences and Humanities Research Council of Canada. </span></em></p><p class="fine-print"><em><span>Michael J. Armstrong and Wesley S. Helms do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Firms like Apple are known to inspire cult-like devotion among consumers. But it’s often less about the quality of the product and more about the emotional connection they create with their customers.Michael J. Armstrong, Associate professor of operations research, Brock UniversityMaxim Voronov, Professor of Organization Studies and Sustainability, Schulich School of Business, York University, CanadaWesley S. Helms, Associate Professor of Strategic ManagmentLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/366852015-01-29T11:57:56Z2015-01-29T11:57:56ZWho wants a BlackBerry these days? Millions in Africa and Asia<figure><img src="https://images.theconversation.com/files/70465/original/image-20150129-22299-vkun5r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">In some parts of the world Blackberry is still king, but for how long?</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/qiaomeng/4331173789">qiaomeng</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>BlackBerry, once <a href="http://www.npr.org/templates/story/story.php?storyId=4279486">the must-have device</a> for the sweaty palms of executives and wannabe executives everywhere, has seen its global share of the smartphone market <a href="http://bits.blogs.nytimes.com/2014/02/12/blackberrys-market-share-falls-below-others/?_r=0">fall to below 1%</a>. So would you still buy this unpopular phone? If you live in parts of Africa, India or Indonesia, the answer is “hell, yes”.</p>
<p>The Canadian company behind the BlackBerry, Research in Motion (RIM), came to the mobile market in 1999 with the <a href="http://www.cnet.com/products/blackberry-850-enterprise-edition-blackberry-series/specs/">BlackBerry 850</a> – perhaps more of a high-end pager than a smartphone. In 2002 it launched the <a href="http://www.phonearena.com/phones/BlackBerry-5810_id122">5810</a>, its first device marketed as a phone with email capability. From that point on, the firm rapidly established itself as a market leader with handsets that provided easy access to email through their trademark compact physical QWERTY keypad, becoming essential business tools. </p>
<p>The term “<a href="http://crackberry.com/">crackberry</a>” gained currency to described its users’ urge to check their devices, while Barack Obama famously <a href="http://www.cbc.ca/news/technology/obama-won-t-give-up-blackberry-spokesman-says-1.825263">refused to surrender</a> his BlackBerry on becoming president in 2009. However, like once equally mighty phone manufacturers Motorola and Nokia, RIM struggled to respond to Apple’s game-changing iPhone in 2007, which redefined the smartphone as a handset dominated by a large touch screen, extended by downloadable apps, and most importantly as a device for everybody, not just business users. </p>
<p>The appeal of the BlackBerry – and the company’s large installed base – allowed RIM to <a href="http://windowsitpro.com/windows/android-outsells-iphone-us-q1-2010">boast</a> that in 2010 there were more smartphone subscribers in the US using BlackBerry than using iPhones or Android devices. But BlackBerry’s share of the global smartphone market has <a href="http://www.statista.com/statistics/263439/global-market-share-held-by-rim-smartphones">tumbled from a high of 20% in 2009</a> when it was second only to Nokia’s Symbian-based phones, to 14% in 2010, 8% in 2011 and 3% in 2012.</p>
<h2>Further afield and the picture is rosy</h2>
<p>While this may seem a gloomy outlook for the BlackBerry, outside Europe and the US the true picture is a little more complicated. The most popular smartphone in South Africa, for the last four years, is the BlackBerry Curve 8520. Indeed, BlackBerry phones (8520, 9320, 9300) dominate the top rankings in a recent <a href="http://mybroadband.co.za/news/smartphones/109934-surprising-top-smartphone-stats-in-south-africa.html">survey</a> carried out by Vodacom in South Africa, with 23% of the smartphone market. The same applies to Nigeria, where BlackBerry boasts 40% of the market, and the drama <a href="http://www.economist.com/news/business/21567977-its-devices-are-still-popular-there-africa-wont-save-rim-blackberry-babes">BlackBerry Babes</a> gives some indication of the status the phones command.</p>
<p>What is the BlackBerry’s appeal to the developing world? The answer is threefold. First, a BlackBerry is seen as a status symbol, a strong brand that people aspire to own. Second, low-cost mobile data bundles and the fact that BlackBerry users can exchange messages for free using the <a href="http://uk.blackberry.com/bbm.html">Blackberry Messenger</a> (BBM) service makes them affordable and well-suited to less capable mobile networks. Finally, phones are upgraded less frequently in developing countries – South Africa’s most recent chart-topping BlackBerry is three years old. </p>
<p>The situation in India and Indonesia is slightly different: here the <a href="http://www.gsmarena.com/blackberry_z3-6163.php">BlackBerry Z3</a> – a new, low-cost touch screen model released specifically for the Asian market – is <a href="http://blogs.blackberry.com/2014/05/blackberry-z3-sells-out-on-first-day-in-indonesia-pictures">doing very well</a>, despite market share in Indonesia <a href="http://www.phonearena.com/news/Indonesia-abandons-BlackBerry_id62523">falling from 43% to 3%</a> in three years. In India the BlackBerry <a href="http://forbesindia.com/article/big-bet/blackberrys-success-in-india/29132/1">outsells the iPhone</a> by appealing both to the young and trendy and to business workers looking for that white-collar professional look.</p>
<h2>Right phone, right price – for now</h2>
<p>So BlackBerry’s success for the moment appears to be reliant on its strong brand and affordable products. The fact that its critically important BlackBerry Messenger service has been ported to run on Android is also significant as it maintains the customer base without a reliance on handset ownership. </p>
<p>However, BlackBerry will face a longer term challenge from an influx of cheaper and more capable smart phones arriving from China and the Far East, at which point the question will be whether its brand will be strong enough to ensure survival. </p>
<p>Recent <a href="http://www.techweekeurope.co.uk/e-enterprise/merger-acquisition/samsung-blackberry-takeover-159641">speculation</a> that Samsung might consider buying BlackBerry has renewed interest in the company’s fortunes. But such a takeover may well be motivated more by the value of the firm’s intellectual property portfolio: its proprietary operating system, the BBM instant messaging platform, and the real-time <a href="http://www.qnx.com/">QNX</a> operating system which the firm acquired in 2010. Designed specifically for embedded devices, QNX could be seen as <a href="http://www.zdnet.com/article/blackberrys-qnx-why-its-so-valuable-to-apple-google-auto-industry/">a key property</a> as the “internet of things” develops – much more so, in fact, than a portfolio of smart phones popular in only a few countries.</p><img src="https://counter.theconversation.com/content/36685/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nigel Linge has received funding from the Research Councils UK and EU.</span></em></p>BlackBerry, once the must-have device for the sweaty palms of executives and wannabe executives everywhere, has seen its global share of the smartphone market fall to below 1%. So would you still buy this…Nigel Linge, Professor, Computer Networking and Telecommunications, University of SalfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/366172015-01-22T23:56:16Z2015-01-22T23:56:16ZWhy BlackBerry’s argument for app neutrality is crazy<p>Last night, BlackBerry CEO John Chen <a href="http://blogs.blackberry.com/2015/01/blackberry-net-neutrality/">penned a blog post</a> on net neutrality. He was in favor of net neutrality but in the last half of his post introduced a whole new notion of neutrality: “application neutrality,” or app neutrality for short. </p>
<p>Suffice it to say, the internet <a href="http://www.theverge.com/2015/1/22/7870363/blackberry-ceo-open-letter-net-neutrality">decided this was crazy</a>. And, I’m going to keep it real here. I agree. It is crazy. Really crazy to equate app neutrality with net neutrality. </p>
<p>But it is perhaps important at times like these to remind ourselves why. One of the dangers of the net neutrality debate is that the case for it can quickly fall into the trap that it is good because it’s fair. But as Scott Adams <a href="http://economics.com.au/?p=9804">has told us</a>, it is a word that allows morons to participate in debates. The app neutrality claim has a similar “fairness” feel about it.</p>
<p>So what did Chen mean when he raised the issue of “app neutrality?”</p>
<p>“All wireless broadband customers must have the ability to access any lawful applications and content they choose, and applications/content providers must be prohibited from discriminating based on the customer’s mobile operating system.”</p>
<p>He argues that BlackBerry is practicing this because it made its popular BlackBerry Messenger (BBM) an application on all mobile platforms including iOS, Android and even Windows. However, Apple, for instance, has its iMessage app only on Apple devices. In addition, Netflix hasn’t bothered to make an app for BlackBerry. That last claim is a little rich as Netflix is available on the web so is hardly kept from BlackBerry users.</p>
<p>Now what is going on here? BlackBerry would like to compete for Apple customers, but it knows that some key apps aren’t available. iMessage may be one constraint in that switchers would lose their messages if they moved to BlackBerry. Of course, that is the reason BBM was made widely available. The company hoped to lure consumers over so that, in the future, making a switch would be easy. When BlackBerry was the big cheese prior to 2010, BBM was locked into its system. But it is true: if apps were more widely available across platforms, it would be easier for consumers to switch among them.</p>
<p>We could spend some time talking about switching costs and competition. That is a relevant issue. It is why, for instance, <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=223189">we have mobile number portability between carriers</a>. Switching costs can reduce competition. But even so it is a long stretch to claim that we need app neutrality. There are costs and complications in that notion that I won’t begin to get into here.</p>
<p>But the important thing is that it is completely different from the issues that drive net neutrality. We want net neutrality so that people who are providing content and apps have a channel to put them on – namely, the web – and they won’t face differential charges and quality of service in doing so. It will then ensure access to consumers without the possibility of price discrimination by some bottleneck provider – either a carrier or perhaps even a mobile operating system owner – in the middle. </p>
<p>Without such neutrality, those in the middle will have the ability to use price discrimination of some form to snare extra profits from content providers and perhaps app makers. This would reduce their incentives to develop that stuff in the first place, and the entire ecosystem would suffer. (<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2439360">This argument is made by me here</a>).</p>
<p>Thus, in the net neutrality world, Apple is the app maker. So what we would be concerned about is BlackBerry refusing to make Apple’s iMessage available rather than the other way around. Or at least that would be the closest analogue. Instead, the app maker, Apple, has decided it does not want to make its app available to all customers. This happens all the time. For instance, Netflix does not make its content available to people unwilling to pay $8.99 a month. App makers and content providers are allowed to restrict access in a net neutrality world. Net neutrality is about protecting them not others.</p>
<p>So Chen was wrong to associate app neutrality with net neutrality and muddy that debate. He may have a point somewhere about switching costs but he did not present a reasoned argument. He just jumped up and down and claimed it was unfair. Crazy.</p><img src="https://counter.theconversation.com/content/36617/count.gif" alt="The Conversation" width="1" height="1" />
Last night, BlackBerry CEO John Chen penned a blog post on net neutrality. He was in favor of net neutrality but in the last half of his post introduced a whole new notion of neutrality: “application neutrality…Joshua Gans, Professor of Strategic Management, University of TorontoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/226142014-01-31T00:06:47Z2014-01-31T00:06:47ZEveryone wins in Motorola sell off, except HTC and Blackberry<figure><img src="https://images.theconversation.com/files/40226/original/swjddp9p-1391102203.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Once-mighty Motorola will be part of Lenovo.</span> <span class="attribution"><span class="source">Titanas</span></span></figcaption></figure><p>Google’s decision to <a href="http://googleblog.blogspot.co.uk/2014/01/lenovo-to-acquire-motorola-mobility.html">sell Motorola</a> to Lenovo could easily be misread as a sign of defeat. In fact, it is win-win. And it spells trouble for struggling competitors Blackberry and HTC.</p>
<p>Google originally bought Motorola in 2012 for about $12.5 billion and is now selling for $2.9 billion. The apparent shortfall is less severe when you consider the fact that Motorola came with $2 billion in cash (roughly the size of the operating losses incurred since), a <a href="http://moto.arrisi.com/special/learn_more/arris.asp">set-top box</a> business which Google sold off the same year for $2.35 billion, and roughly 17,000 patents which will mostly remain with Google.</p>
<p>At the time of the original purchase, there was much talk of Google combining its software with Motorola hardware to create an <a href="https://theconversation.com/innovative-apple-should-watch-out-for-app-disruption-18070">unassailable ecosystem</a>. But that was arguably never at the forefront of the internet company’s thinking when it bought the former American technology icon. </p>
<p>Pre-existing relationships with phone makers using Android would have soured if Motorola had become a privileged conduit for the operating system. The danger of such conflicts of interest is demonstrated by Microsoft’s involvement with Nokia, which <a href="https://theconversation.com/in-an-escalation-of-commitment-nokia-becomes-microsoft-17803">hurt the prospects</a> of Windows Phone becoming a universal smartphone operating system.</p>
<h2>Google frees itself of baggage</h2>
<p>Google was primarily interested in Motorola’s patent trove. The intellectual property is useful in the proxy-court battles with Apple. Back in 2012, Motorola’s patents were not on sale without the hardware business, so Google took the whole lot. </p>
<p>Just before that acquisition, Google had lost out in a bid for the patent portfolio of Canada’s ailing Nortel. A consortium that includes Apple acquired those patents and used them to <a href="http://arstechnica.com/tech-policy/2013/10/patent-war-goes-nuclear-microsoft-apple-owned-rockstar-sues-google">sue Google</a>.</p>
<p>Mindful of such threats, Google not only acquired Motorola but also recently agreed to <a href="http://global.samsungtomorrow.com/?p=33461">cross-licence</a> patents with Samsung, further bolstering its defences. The combined war chest of patents is to defend the Android ecosystem, rather than protect any advantage in hardware that Motorola had already lost. So Google won’t mind ridding itself of the actual hardware operations. </p>
<h2>Lenovo gains hardware scale</h2>
<p>The smartphone market is maturing rapidly, with <a href="http://www.ft.com/cms/s/0/2d355b82-883e-11e3-a926-00144feab7de.html">Apple</a> and <a href="http://www.ft.com/cms/s/0/d3df1004-87d0-11e3-9c5c-00144feab7de.html">Samsung</a> both failing to attain anticipated profits. It is becoming harder and harder for manufacturers to justify price premiums when smartphones look increasingly alike. </p>
<p>With such commoditisation, economies of scale grow in importance. Lenovo recently overtook LG to become the world’s <a href="http://www.idc.com/getdoc.jsp?containerId=prUS24645514">fourth-largest</a> smartphone maker by shipments. Motorola will add to its scale, particularly in the US market.</p>
<p>Lenovo, battle-hardened in the cost-conscious Chinese consumer market, is arguably better placed than Google to make the economics of maturing markets work in its favour. The company successfully built on IBM’s former Thinkpad brand when that market matured. It has also recently announced a takeover of IBM’s lower-end server business.</p>
<p>By contrast, Google thrives more in nascent markets, moving at the cusp of the technology frontier. In addition to the patents, the company is also holding on to Motorola’s Advanced Technology group – a kind of <a href="http://techcrunch.com/2014/01/29/google-keeps-motorolas-advanced-technology-group-home-of-the-modular-phone-and-password-tattoo">Q-division</a> whizz-kid team.</p>
<p>This team’s recent innovations include novel voice controls and clever <a href="http://motorola-blog.blogspot.co.uk/2013/10/goodbye-sticky-hello-ara.html">hardware modularisation</a>. The brainpower will no doubt be of use as Google intensifies its presence in wearable devices and the <a href="https://theconversation.com/googles-smart-home-strategy-starts-with-smoke-alarms-22096">smart home market</a>.</p>
<h2>Smaller contenders threatened</h2>
<p>Two companies, however, will be upset about the Motorola deal. Blackberry, a former pioneer of the smartphone era, has the dubious fortune of counting <a href="http://blogs.wsj.com/washwire/2013/12/04/president-obama-sticks-with-blackberry-for-security-reasons">Barack Obama as a customer</a>. Lenovo was interested in Blackberry, but the <a href="http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/lenovo-considered-a-bid-for-blackberry-but-ottawa-wouldnt-accept-chinese-takeover/article15256976/?cmpid=rss1&click=dlvr.it">Canadian government</a> considered the possible takeover a threat to national security and its neighbour’s president.</p>
<p>So Blackberry now has to make do without outside rescue. It has <a href="http://theconversation.com/blackberry-fail-shows-perpetual-dilemma-of-tech-innovators-19846">belatedly pivoted</a> towards providing mobile device-agnostic security services while outsourcing hardware to <a href="http://www.bbc.co.uk/news/business-25461892">Foxconn</a>.</p>
<p>The other disappointed onlooker is HTC. It is neither perceived as a high-end brand nor is it big enough to compete effectively in the mass market. It might end up in the arms of <a href="http://www.ft.com/cms/s/0/8751175e-35ab-11e3-b539-00144feab7de.html">Amazon</a> or attract interest from other Asian challengers such as Huawei or Coolpad.</p>
<p>Smartphone hardware is about to become as normal and boring a market as any other, where scale creates margins. Google’s strengths lie elsewhere.</p><img src="https://counter.theconversation.com/content/22614/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ronald Klingebiel researches and advises companies in the telecommunications industries. His work attracts support from both corporate and government funding sources.</span></em></p>Google’s decision to sell Motorola to Lenovo could easily be misread as a sign of defeat. In fact, it is win-win. And it spells trouble for struggling competitors Blackberry and HTC. Google originally…Ronald Klingebiel, Assistant Professor of Strategy, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/207422013-11-26T14:35:00Z2013-11-26T14:35:00ZBring your own device, lose your employer’s secrets<figure><img src="https://images.theconversation.com/files/36177/original/2x9tqxsj-1385469713.jpg?ixlib=rb-1.1.0&rect=107%2C98%2C1857%2C1171&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Just sending one last email from the bar ... before my phone gets nicked.</span> <span class="attribution"><span class="source">philcampbell</span></span></figcaption></figure><p>A <a href="http://www.trendmicro.co.uk/newsroom/pr/culture-of-carelessness-poses-security-threat-to-uk-businesses/index.html">survey of 2,500 British adults</a> has revealed 27% have had up to three devices containing sensitive work-related data stolen or have lost them. Of these, 52% admitted that they were out drinking when it happened.</p>
<p>These are <a href="http://www.checkpoint.com/downloads/products/check-point-mobile-security-survey-report2013.pdf">far from the first revelations</a> about the culture of carelessness that poses security threats to UK businesses; and it won’t be the last. The issue is real as more and more employees are using mobile phones for work or bring their own laptops and tablets to the office. </p>
<p>According to a <a href="http://www.juniper.net/us/en/local/pdf/additional-resources/7100155-en.pdf">Juniper Networks report</a>, 76% of mobile users depend on mobile devices to access their most sensitive personal information, such as online banking or personal medical information. But even more use their mobiles for work purposes, with 89% accessing sensitive work-related information on their devices. </p>
<p>It is well known that the weakest link in any IT security chain is the user, which makes the Bring Your Own Device trend particularly difficult to navigate. Companies want staff to be plugged in but can’t necessarily trust them not to lose the devices they need to do this.</p>
<p>Worse still, users generally assume everything will work just as it should, relying on a device’s default settings without referring to complex technical manuals to secure them. The research conducted by Trend Micro and Goldsmiths, University of London revealed 57% of smartphone users do not use a password to secure their devices, which makes them an easy target for cyber-criminals.</p>
<h2>Rocky start for BYOD</h2>
<p>There is always a trade-off between security and access, and we appear to have struggled to strike this balance effectively since BYOD exploded.</p>
<p>Businesses can try to get staff to use passwords with security policies but they cannot afford to be over-complex or they become counterproductive. In our research, we have heard many stories about strict security policies that require employees to use passwords of more than 10 digits, including numbers and letters, and to change that password every three months. As a result, employees struggle to remember their passwords. They end up just writing them down on a post-it and sticking it next to their keyboard – which is about as secure as shouting out your company’s latest sales figures on the bus on your way to work.</p>
<p>As an alternative, at GCU we’re investigating the possibility of having the smartphone implicitly recognise the phone owner, without requiring the owner to always enter a PIN or password. We’re using <a href="http://www.ittgroup.org/index.php?option=com_content&view=article&id=149:o-active-behaviour-demands-active-security-marie-curie-sept-2012-sept-2014&catid=85&Itemid=488">behavioural information</a> available on today’s phones through the multitude of sensors that measure light, noise and position of the phone to experiment with what’s possible. </p>
<p>If a person follows their normal pattern of travelling to and from work, for example, the phone could automatically recognise them by logging this information. The phone could adapt to small changes in environment and require different levels of security from the user to unlock the information it contains.</p>
<h2>Make employees feel the consequences</h2>
<p>To tackle the problem of careless data handling, we first need to educate the people who are guilty of it. Employees need to be made aware of the importance of protecting sensitive information, especially on their work devices. </p>
<p>Unfortunately, introducing penalties for those who lose work devices appears to be needed. The Trend Micro research shows that only 11% of those surveyed lost their personal smartphone device but that 27% lost work devices. Almost half were concerned about losing personal data, such as photos or bank details, but only 3% were worried about losing work information.</p>
<p>This implies that less care is taken over a device that doesn’t actually belong to you. Perhaps if there were a little incentive to take better care of it, these figures might be somewhat different. Clearly better security policies are needed, but these need to be implemented with good discipline.</p>
<p>For their part, IT departments should implement more rigorous security into work devices, such as strong password and data encryption. They should also fall back on mobile device management when a device is lost, which would allow them to wipe the data stored on the device remotely.</p>
<h2>Be paranoid with Android</h2>
<p>Android has emerged as the most risky platform for mobiles and is perhaps not the best option for work devices as a result. Google, which develops Android, relies on its “open security” strategy to offer a wide variety of apps to users, thus gaining market share against rivals Apple and Microsoft. As such, the Android application publishing process is very easy for developers to use, but that also provides too much space for malicious application creators to produce apps that steal your data.</p>
<p>Android currently has more malware compared to other mobile operating system such as Windows Mobile, Blackberry and Apple. IT departments should consider this factor carefully when choosing a standard platform for work devices for employees.</p>
<p>Service content providers and hardware vendors need to be aware of their responsibilities in maintaining network security and content management on the devices they provide. Service providers might also wise up to the business opportunities presented by offering add-on security services to complement the weaknesses of the devices. After all, businesses must be willing to pay to protect their information when it gets taken to the pub in the pocket of its employees every Friday.</p>
<p>BYOD has made it possible for employees to work on the go, access vital information for meetings out of the office and maintain contact with the boss at all times. It has quickly become an important part of everyday working life and there is no going back. We have failed to adequately adapt to this new way of working so far, but it’s not too late to catch up.</p><img src="https://counter.theconversation.com/content/20742/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bernardi Pranggono has received funding from the UK research councils.</span></em></p><p class="fine-print"><em><span>Mike Just receives funding from the EU FP7 People Programme. </span></em></p>A survey of 2,500 British adults has revealed 27% have had up to three devices containing sensitive work-related data stolen or have lost them. Of these, 52% admitted that they were out drinking when it…Bernardi Pranggono, Lecturer in Networks and Security, Glasgow Caledonian UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/198462013-11-05T14:52:48Z2013-11-05T14:52:48ZBlackBerry #fail shows perpetual dilemma of tech innovators<figure><img src="https://images.theconversation.com/files/34451/original/f5ytntdr-1383653351.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">BlackBerry smartphones, nice but too late.</span> <span class="attribution"><span class="source">Achmad Ibrahim/AP</span></span></figcaption></figure><p>It is now well known that successful companies often have an annoying habit of missing the next big thing. Harvard’s Clayton Christensen coined it the <a href="http://www.businessweek.com/chapter/christensen.htm">innovator’s dilemma</a>. He also produced advice on how to avoid the fate. </p>
<p>What is unclear, however, is what companies should do when, despite their best intentions, they do miss the boat. It happens frequently, especially in the fast-moving world of telecommunications, where disruptions occur faster than you can say “Is this really going to work?” </p>
<p>When caught out, firms typically start to panic, embarking on frenzied attempts to catch up at all costs. Being so occupied, they miss the next, next big thing, yet again. Dilemma begets dilemma. Companies fall into the same trap twice.</p>
<h2>If you miss one wave…</h2>
<p>BlackBerry is a case in point, a handset manufacturer that made its fortune on the back of innovative push-email technology. Its qwerty keyboards became the de facto standard in the corporate world. However, at the height of its success, <a href="http://www.theglobeandmail.com/report-on-business/the-inside-story-of-why-blackberry-is-failing/article14563602/?page=all">BlackBerry ignored</a> the rising popularity of touchscreen devices and also failed to embrace the disruptive potential of mobile app stores. </p>
<p>Executives really recognised this only once its profits and shares started to slide. By that time, unfortunately, the brand and network advantages enjoyed by Apple and Android had become unassailable. Of course, this did not keep BlackBerry from trying. A crisis was declared, a turn-around program announced, and all energy put into producing the Q10 and Z10 handsets, along with a revamped operating system, which were to finally <a href="http://techland.time.com/2013/01/30/all-new-blackberry-z10-and-q10-smartphones-announced/">take on the new smartphone leaders</a>. Unsurprisingly, this came to little.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/34453/original/9tcd3bwn-1383655527.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/34453/original/9tcd3bwn-1383655527.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=407&fit=crop&dpr=1 600w, https://images.theconversation.com/files/34453/original/9tcd3bwn-1383655527.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=407&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/34453/original/9tcd3bwn-1383655527.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=407&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/34453/original/9tcd3bwn-1383655527.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=511&fit=crop&dpr=1 754w, https://images.theconversation.com/files/34453/original/9tcd3bwn-1383655527.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=511&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/34453/original/9tcd3bwn-1383655527.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=511&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Not everyone’s favourite handsets.</span>
<span class="attribution"><span class="source">Mark Lennihan/PA</span></span>
</figcaption>
</figure>
<p>BlackBerry’s story since has not been pretty; its fire sale <a href="http://www.bbc.co.uk/news/business-24808012">just fell through</a>, and its <a href="http://www.theguardian.com/technology/2013/nov/04/blackberry-fires-ceo-thorsten-heins-fairfax-bid-collapses">CEO has been fired</a>. The company faces an uncertain future, as it fights to stay afloat.</p>
<p>One wonders what might have been possible if, instead of trying to catch up, BlackBerry had devoted the same amount of resources on building a competitive position for the time after the iOS-app store bonanza, which seems to be <a href="https://theconversation.com/innovative-apple-should-watch-out-for-app-disruption-18070">fading already</a>. </p>
<p>BlackBerry still curries some favour in the business market, where its enterprise server provides a trusted means of secure communication. Although employees now tend to work off several different devices, the business need for a secure environment and efficient integration remains. A whole new industry is springing up to address such device-agnostic requirements, ranging from new entrants like AirWatch, MobileIron, and Soti to established players such as cellphone operators keen on a slice of the action. </p>
<p>BlackBerry could have preempted this development by leveraging its unique <a href="https://theconversation.com/blackberry-has-a-future-but-its-not-in-handsets-17070">enterprise server advantage</a>. It could have now been leading this new area of mobile device management.</p>
<h2>…prepare for the next</h2>
<p>British Telecom (BT) is a different story. In the 90s, the company recognised the internet and data potential of third-generation mobile networks. BT went all-in, as did most competitors. The company was, however, forced to forego the technology when its ballooning debt levels necessitated the 2002 sale of its mobile arm, BT Cellnet, which became O2. </p>
<p>When BT regained the financial strength to get a 3G license, acquire a competitor, or act as a virtual operator, leasing lines from others, it did not immediately pursue these options even though Vodafone, O2, T-Mobile and Hutchinson’s 3 were starting to enjoy 3G benefits. Instead of running after a train that had long gone, BT focused on being ready for the next big thing.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/34454/original/29q6h99m-1383656269.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/34454/original/29q6h99m-1383656269.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=371&fit=crop&dpr=1 600w, https://images.theconversation.com/files/34454/original/29q6h99m-1383656269.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=371&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/34454/original/29q6h99m-1383656269.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=371&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/34454/original/29q6h99m-1383656269.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=466&fit=crop&dpr=1 754w, https://images.theconversation.com/files/34454/original/29q6h99m-1383656269.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=466&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/34454/original/29q6h99m-1383656269.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=466&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">BT connects landline and mobile.</span>
<span class="attribution"><span class="source">Andrew Milligan/PA</span></span>
</figcaption>
</figure>
<p>In this case, the increasing similarity of what could be delivered on fixed and mobile networks augured an increasing convergence of the two, promising to disrupt business models in the industry. BT’s first crack at this was Fusion, a mobile service and device that was to use BT’s wifi when in reach of broadband access and other firm’s mobile coverage when beyond. </p>
<p>Although Fusion was unsuccessful, due to operators’ intransigence, BT’s follow-on attempt holds promise. It recently acquired a 4G license and aims to use it to provide high-speed connections to remote households that are hard to get to with cable. This gives BT’s multi-play offering of phones, internet, and TV much greater reach. It is also conceivable that consumers want to get all their connectivity needs (mobile & fixed) out of one hand. BT’s fledgling Broadband Anywhere tries to service this trend.</p>
<p>BT’s strategic preparedness might thus allow it to bridge the mobile-fixed divide more easily than competitors BSkyB and Vodafone can. BT’s outlook is positive again, despite the hit it took on 3G.</p>
<p>My advice for firms who feel they have missed out on the latest wave of innovation in their sector? In the spirit of BT, try to avoid getting into perpetual dilemmas. Think twice before chasing after disruptors when they have already tilted the game in their favour. BlackBerry’s demise serves as a warning. </p>
<p>Instead tech firms ought to take the long view, focusing on the big thing after next. Markets might forgive one oversight; just think of IBM or even Nokia, whose century-long histories are littered with missed opportunities and subsequent rebounds. But tech innovators probably cannot afford to fail twice in a row. </p>
<p>If you miss one wave, don’t swim after it. Prepare for the next.</p><img src="https://counter.theconversation.com/content/19846/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ronald Klingebiel researches and advises companies in the telecommunications industries. His work attracts support from both corporate and government funding sources.</span></em></p>It is now well known that successful companies often have an annoying habit of missing the next big thing. Harvard’s Clayton Christensen coined it the innovator’s dilemma. He also produced advice on how…Ronald Klingebiel, Assistant Professor of Strategy, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/180122013-09-10T02:11:16Z2013-09-10T02:11:16ZAnother NSA entry point – and this time, it’s your smartphone<figure><img src="https://images.theconversation.com/files/31037/original/xg4dbmg5-1378774476.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Syncing a smartphone with your computer can provide external access to your data.</span> <span class="attribution"><span class="source">Stephan Geyer</span></span></figcaption></figure><p>The US National Security Agency (<a href="http://www.nsa.gov/">NSA</a>) leaks just keep coming. Only a few days after details of its <a href="https://theconversation.com/nsa-breaches-a-new-level-of-social-contract-with-sigint-17926">software anti-cryptography hacks</a> were exposed by The Guardian, New York Times and ProPublica, German news source Der Spiegel <a href="http://www.spiegel.de/international/world/how-the-nsa-spies-on-smartphones-including-the-blackberry-a-921161.html">reported</a> some intriguing news regarding the NSA’s activities in hacking smartphones. </p>
<p>According to the article, Der Spiegel has seen leaked internal NSA documents that report on NSA’s efforts in hacking iPhones, Androids and BlackBerrys. </p>
<p>There are a number of interesting aspects to the story. </p>
<p>First is that the NSA regards smartphones as something of a boon for their activities. Not only are smartphones used for a variety of communications - voice, messaging and emails - they contain lots of other information of interest to the agency, such as social and professional contacts, geolocation, personal and professional interests, photos. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/31039/original/nz7k7xf6-1378776424.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/31039/original/nz7k7xf6-1378776424.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/31039/original/nz7k7xf6-1378776424.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/31039/original/nz7k7xf6-1378776424.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/31039/original/nz7k7xf6-1378776424.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/31039/original/nz7k7xf6-1378776424.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/31039/original/nz7k7xf6-1378776424.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/31039/original/nz7k7xf6-1378776424.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption"></span>
<span class="attribution"><span class="source">miss karen</span></span>
</figcaption>
</figure>
<p>Much of modern life for many people is lived through their smartphone. The report quotes the statistic that more than two thirds of mobile phone users in the UK now use smartphones. The extent of our reliance on the smartphone and its ubiquity make it an attractive target. </p>
<p>Of course, the most interesting aspect is <em>how</em> the phones are hacked. Modern cryptographic algorithms used in smartphones are generally regarded as unbreakable, although there are some stories about NSA progress there as well.</p>
<h2>Weak points</h2>
<p>It is in the implementation of the algorithms and the supporting systems that weaknesses can occur and is typically where an attack can most easily be carried out. </p>
<p>The article is a little short on the detail as to how the NSA have carried out the hacks, but there seem to have been two avenues, both related to implementation:</p>
<ul>
<li><p>The first is in synchronisation. The most successful hacks appear to be based on attacking host machines with which the smartphone is synchronised. Synchronisation is the process whereby data on the smartphone is stored on a host machine in the event that it’s lost on the smartphone. In attacks using this type of approach, it is the data on the host that is the target rather than data on the smartphone itself. The smartphone may be secure, but the host may not be. </p></li>
<li><p>The second is in some of the smartphone apps. No examples are given in the Der Spiegel article but there is an anecdote about a former NSA head joking about the 400,000 iPhone apps being 400,000 possible avenues of attack.</p></li>
</ul>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/31043/original/h9svncnm-1378776813.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/31043/original/h9svncnm-1378776813.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/31043/original/h9svncnm-1378776813.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=371&fit=crop&dpr=1 600w, https://images.theconversation.com/files/31043/original/h9svncnm-1378776813.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=371&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/31043/original/h9svncnm-1378776813.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=371&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/31043/original/h9svncnm-1378776813.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=466&fit=crop&dpr=1 754w, https://images.theconversation.com/files/31043/original/h9svncnm-1378776813.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=466&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/31043/original/h9svncnm-1378776813.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=466&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Pictured: twenty avenues of attack?</span>
<span class="attribution"><span class="source">premasagar</span></span>
</figcaption>
</figure>
<h2>BlackBerry: finally cracked</h2>
<p>Much of Der Spiegel’s report is dedicated to the NSA’s efforts in cracking the BlackBerry. Apparently, the BlackBerry was particularly challenging to hack but efforts were eventually successful. </p>
<p>As the report points out, BlackBerry is likely to be very upset about these disclosures. The company is in <a href="https://theconversation.com/blackberrys-time-has-passed-as-will-the-iphones-such-is-the-way-17044">financial difficulty</a> and is looking for a buyer. One of the few strengths of its products compared with other smartphones was the perception of BlackBerry’s superior security – one of the reasons it has been the choice of government officials and <a href="https://theconversation.com/hackers-squeeze-blackberry-for-spilling-juice-on-london-riots-2809">protesters</a> the world over. These releases undermine that perception.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/31042/original/9ypdw9m4-1378776749.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/31042/original/9ypdw9m4-1378776749.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/31042/original/9ypdw9m4-1378776749.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=523&fit=crop&dpr=1 600w, https://images.theconversation.com/files/31042/original/9ypdw9m4-1378776749.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=523&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/31042/original/9ypdw9m4-1378776749.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=523&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/31042/original/9ypdw9m4-1378776749.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=657&fit=crop&dpr=1 754w, https://images.theconversation.com/files/31042/original/9ypdw9m4-1378776749.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=657&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/31042/original/9ypdw9m4-1378776749.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=657&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption"></span>
<span class="attribution"><span class="source">miggslives</span></span>
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</figure>
<p>There are other interesting aspects. It is not just the NSA that has been active in this area. Britain’s Government Communications Headquarters (<a href="http://www.gchq.gov.uk/Pages/homepage.aspx">GCHQ</a>) has had success as well, particularly in cracking the BlackBerry. Another is that the NSA appears to have exploited weaknesses in the <a href="http://docs.blackberry.com/en/admin/deliverables/12058/How_BES_and_BBMVS_protect_communication_843267_11.jsp">communications protocol</a> (encryption method) used on the BlackBerry.</p>
<p>Perhaps the key point of the Der Spiegel article is that implementation is often a weak link in a cryptographic system. Cryptographic algorithms might be strong, perhaps unbreakable. It is in the implementation that weaknesses occur. </p>
<p>So what does this mean for smartphone users? For most of us, our lives, even if not blameless, are unlikely to be of sufficient interest to the intelligence agencies to warrant the effort needed to be hacked. </p>
<p>But it’s worth bearing in mind that, if an intelligence agency really wants to see what’s on our smartphone, they can probably get it. </p><img src="https://counter.theconversation.com/content/18012/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Philip Branch does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The US National Security Agency (NSA) leaks just keep coming. Only a few days after details of its software anti-cryptography hacks were exposed by The Guardian, New York Times and ProPublica, German news…Philip Branch, Senior Lecturer in Telecommunications, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/177742013-09-04T01:26:13Z2013-09-04T01:26:13ZMicrosoft buys Nokia to make its own phones. Will they be that smart?<figure><img src="https://images.theconversation.com/files/30639/original/xwz7x6mf-1378256549.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Microsoft chief Steve Ballmer is taking Nokia's mobile business off the hands of its interim CEO, Risto Siilasmaa.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>In a move that was paradoxically as unexpected as it was inevitable, Finnish mobile phone company Nokia <a href="http://www.businessinsider.com.au/microsoft-buys-nokia-devices-2013-9">has sold</a> its mobile phones business to Microsoft for US$7.2 billion. The deal comes at a time when Nokia continued to struggle to make headway with its Windows-based smartphones against Apple and Google’s Android. Nokia, which <a href="http://www.reuters.com/article/2013/09/03/us-microsoft-nokia-idUSBRE98202V20130903">once commanded</a> 40% of the market, now has less than 15% of the worldwide mobile phone market and less than 3% of the smartphone market.</p>
<p>In addition to the phones, the deal gives Microsoft a non-exclusive licence to Nokia’s patents for ten years.</p>
<p>Stephen Elop, Nokia’s CEO and former Microsoft executive will step down from the role and return to Microsoft to run an expanded devices division. His name has <a href="http://allthingsd.com/20130902/stephen-elop-is-now-microsoft-ceo-candidate-to-beat/">come up</a> as a possible candidate to replace Microsoft CEO Steve Ballmer, who announced his retirement earlier this month. </p>
<p>Opinion is divided as to whether this is a good idea for either company, with <a href="http://gigaom.com/2013/09/03/why-i-think-the-7-2-billion-microsoft-nokia-deal-is-a-terrible-idea/">some seeing</a> it as an act of desperation on the part of both Microsoft and Nokia. On hearing the news, investors <a href="http://au.finance.yahoo.com/q?s=nok&ql=1">boosted</a> Nokia’s share price by 41% while <a href="http://au.finance.yahoo.com/q?s=msft&ql=1">discounting</a> Microsoft’s by 5%.</p>
<p>Microsoft, whose dominance in the PC market has continued to wane as consumers and businesses migrate increasingly to mobile, has faced an uphill struggle trying to break into the mobile market. The original deal with Nokia requiring them to focus exclusively on the Microsoft platform has resulted in only <a href="http://www.news.com.au/breaking-news/world/smartphones-518-of-global-mobiles-sales/story-e6frfkui-1226698719833">small gains</a> in the share of the smartphone market, mainly at the expense of the other ailing smartphone company, BlackBerry. It is very hard to see how it will reach what some <a href="http://www.forbes.com/sites/ewanspence/2013/09/03/after-nokia-purchase-microsoft-must-hit-10-market-share-as-quickly-as-possible/">analysts</a> claim to be an achievable 15% market share within five years. Even the once dominant Apple has struggled to maintain market share against the combination of Google, Android and a range of manufacturers led by Samsung.</p>
<p>Before Microsoft considers the issue of its overall market share, it has more practical problems to overcome. The first challenge is that Nokia’s revenues have been <a href="http://www.theverge.com/2013/7/18/4534124/nokia-q2-2013-financial-report">declining</a> over the past three years, with its last reported quarter resulting in a US$151 million loss. The uncertainty created by the sale may accelerate these losses, combined with the question of what Microsoft will do with all of the feature phones that Nokia sells. Given that this is not core to Microsoft’s business, it will be trying to move people onto smartphones as quickly as possible.</p>
<p>The second challenge is keeping Nokia from disintegrating entirely. The company has been part of Finland’s history for 150 years and by <a href="http://gigaom.com/2013/09/03/why-i-think-the-7-2-billion-microsoft-nokia-deal-is-a-terrible-idea/">some accounts</a> Nokia staff and the Finnish people generally are not entirely happy with the sale. Talented staff may choose to leave rather than work for Microsoft, compounding the difficulty of integrating a European company into Microsoft’s US-based corporate culture. Balancing this is the general acceptance that Nokia’s future was never assured without the sale and so this was perhaps the only option.</p>
<p>The final challenge for Microsoft will be to make sure it doesn’t kill the Nokia brand entirely through pure inertia. As a possibly sobering comparison, and after two years of trying, Google has not <a href="http://www.forbes.com/sites/roberthof/2013/09/03/be-honest-are-you-any-more-likely-to-buy-a-nokia-windows-phone-now/">particularly succeeded</a> in making significant headway with its smartphone company Motorola. Unlike Google though, Microsoft doesn’t have to worry about alienating other smartphone manufacturers by its direct promotion of Nokia. Windows has been largely ignored by other companies and Nokia <a href="http://www.businessinsider.com.au/microsoft-buys-nokia-devices-2013-9">makes up</a> 80% of the Windows smartphone market. Microsoft can afford to not have any other manufacturer offer Windows phones.</p>
<p>Microsoft’s move into phone hardware comes at a time when the smartphone market is maturing and attention is already focused on connected “wearables” like smart watches and glasses. Right on cue, Samsung is today likely to <a href="http://news.cnet.com/8301-1035_3-57600926-94/samsung-unpacked-2-are-we-in-for-a-train-wreck-or-a-triumph/">announce</a> its smart watch “Gear”. Expanding the Android ecosystem and providing a literal extension of the smartphone, the ability for devices to inter-operate will become an increasingly important part of the decision to buy one technology over another. In this regard, companies like Samsung have a huge advantage over Microsoft in that their products cover the spectrum of connected technology, from phones to computers, smart watches, TVs and fridges. On its own, a smartphone these days is simply not that smart.</p>
<p>Overall, Microsoft’s purchase of Nokia has probably extended its life for a few more years. Whether it succeeds in reversing its decline and keeping it off life support is yet to be seen.</p><img src="https://counter.theconversation.com/content/17774/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Glance does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In a move that was paradoxically as unexpected as it was inevitable, Finnish mobile phone company Nokia has sold its mobile phones business to Microsoft for US$7.2 billion. The deal comes at a time when…David Glance, Director, Centre for Software Practice, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/170442013-08-15T02:49:53Z2013-08-15T02:49:53ZBlackberry’s time has passed, as will the iPhone’s – such is the way<figure><img src="https://images.theconversation.com/files/29279/original/tchyn3sr-1376529966.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The introduction of new-look smartphones such as the Z10 has done little to lift BlackBerry's fortunes.</span> <span class="attribution"><span class="source">Moridin_</span></span></figcaption></figure><p>You’ll have seen the news about BlackBerry – the once undisputed champion in communications technology – essentially <a href="http://www.pcadvisor.co.uk/news/mobile-phone/3463628/blackberry-5-reasons-it-went-wrong/">putting itself up for sale</a> this week, and may be lamenting the decline of a tech giant. But dry your tears. </p>
<p>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 <a href="http://crackberry.com/crackberry-2006-word-year">Crackberry</a>, another player – Samsung in combination with Google/Android operating system – might take down the Apple offering.</p>
<p>For every tech company or innovation on the way up, another market leader seems destined for irrelevance. </p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/29280/original/p2qwhmh5-1376530926.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/29280/original/p2qwhmh5-1376530926.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/29280/original/p2qwhmh5-1376530926.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1014&fit=crop&dpr=1 600w, https://images.theconversation.com/files/29280/original/p2qwhmh5-1376530926.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1014&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/29280/original/p2qwhmh5-1376530926.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1014&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/29280/original/p2qwhmh5-1376530926.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1275&fit=crop&dpr=1 754w, https://images.theconversation.com/files/29280/original/p2qwhmh5-1376530926.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1275&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/29280/original/p2qwhmh5-1376530926.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1275&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Nokia N96.</span>
<span class="attribution"><span class="source">Gadget Virtuoso</span></span>
</figcaption>
</figure>
<p>BlackBerry’s parent company <a href="http://ca.blackberry.com/company.html">BlackBerry Ltd</a> - a Canadian wireless and telecommunications equipment formerly known as Research in Motion (<a href="http://www.rim.com/index_na.shtml">RIM</a>) - announced it was now exploring “<a href="http://press.blackberry.com/press/2013/blackberry-board-of-directors-announces-exploration-of-strategic.html">strategic alternatives</a>”, following the product’s <a href="http://www.newyorker.com/online/blogs/elements/2013/08/blackberry-sale-announcement-iphone-smartphone-market.html">decline in popularity</a> over recent years. </p>
<p>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.</p>
<p>The technology lifespan of products suffers from longevity problems mainly due to the need to keep innovating. </p>
<p>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.</p>
<h2>BlackBerry’s rise</h2>
<p>The first BlackBerry was a <a href="http://www.engadget.com/2009/12/28/ten-years-of-blackberry/">two-way pager device</a> released in 1999; but it wasn’t until 2003 that the <a href="http://www.bbscnw.com/a-short-history-of-the-blackberry.php">BlackBerry smartphone</a> was introduced. It was a revolutionary device, allowing users to browse the internet, email and fax, alongside the usual text message and voice calls. </p>
<p>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. </p>
<p>The phone’s <a href="http://www.networkworld.com/news/2010/102510-android-security-improves.html?page=2">long-standing reputation</a> for data security – information is encrypted using the <a href="http://www.tropsoft.com/strongenc/des3.html">Triple DES</a> and <a href="http://theconversation.com/cracking-bin-ladens-computer-code-unlikely-1096">AES</a> standards – added notoriety to the device; it became the activists’ handset of choice, in outbreaks such as <a href="https://theconversation.com/hackers-squeeze-blackberry-for-spilling-juice-on-london-riots-2809">the 2011 London riots</a>.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/29282/original/24qf7yb6-1376531090.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/29282/original/24qf7yb6-1376531090.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/29282/original/24qf7yb6-1376531090.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=800&fit=crop&dpr=1 600w, https://images.theconversation.com/files/29282/original/24qf7yb6-1376531090.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=800&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/29282/original/24qf7yb6-1376531090.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=800&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/29282/original/24qf7yb6-1376531090.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1005&fit=crop&dpr=1 754w, https://images.theconversation.com/files/29282/original/24qf7yb6-1376531090.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1005&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/29282/original/24qf7yb6-1376531090.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1005&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The BlackBerry in a previous incarnation.</span>
<span class="attribution"><span class="source">arrayexception</span></span>
</figcaption>
</figure>
<p>The BlackBerry business model was built on subscribers paying a fee to connect to a centralised <a href="http://au.blackberry.com/business/software/bes.html">BlackBerry Enterprise Server</a>. As its name suggests, the server synchronised all BlackBerry functions between connected devices within an organisation.</p>
<p>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.</p>
<p>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.</p>
<h2>BlackBerry’s fall</h2>
<p>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. </p>
<p>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.</p>
<p>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.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/29277/original/pdbtgv53-1376529087.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/29277/original/pdbtgv53-1376529087.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/29277/original/pdbtgv53-1376529087.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/29277/original/pdbtgv53-1376529087.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/29277/original/pdbtgv53-1376529087.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/29277/original/pdbtgv53-1376529087.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/29277/original/pdbtgv53-1376529087.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/29277/original/pdbtgv53-1376529087.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Apple iPhone 5, introduced last year.</span>
<span class="attribution"><span class="source">Apple/EPA</span></span>
</figcaption>
</figure>
<p>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.</p>
<p>With the BlackBerry on its knees, a further blow was dealt by the recent popularity of <a href="http://en.wikipedia.org/wiki/Cloud_computing">cloud services</a> - a network of remote rather than local servers to store and manage data - and the “internet everywhere” paradigm. </p>
<p>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.</p>
<h2>The iPhone … and beyond</h2>
<p>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, <a href="http://www.gsmarena.com/galaxy_s4_outsells_iphone_5_for_the_first_time_in_us-news-6169.php">surpassed Apple in US phone sales</a> in May this year.</p>
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<a href="https://images.theconversation.com/files/29278/original/44tt23wj-1376529368.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/29278/original/44tt23wj-1376529368.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/29278/original/44tt23wj-1376529368.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=567&fit=crop&dpr=1 600w, https://images.theconversation.com/files/29278/original/44tt23wj-1376529368.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=567&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/29278/original/44tt23wj-1376529368.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=567&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/29278/original/44tt23wj-1376529368.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=713&fit=crop&dpr=1 754w, https://images.theconversation.com/files/29278/original/44tt23wj-1376529368.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=713&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/29278/original/44tt23wj-1376529368.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=713&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Samsung’s Galaxy S4 – in line to be the new top dog?</span>
<span class="attribution"><span class="source">Yonhap/AAP</span></span>
</figcaption>
</figure>
<p>Among other features, the Galaxy S4 boasts a 13-megapixel camera, expandable storage to 96 gigabytes, and <a href="https://theconversation.com/the-samsung-galaxy-s4-and-eye-tracking-looking-forwards-13114">eye-tracking</a> software.</p>
<p>The Google-developed [Android system](http://en.wikipedia.org/wiki/Android_(operating_system%29) 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.</p>
<p>While Apple is strongly fighting Samsung <a href="https://theconversation.com/patent-wars-we-get-the-war-but-what-about-the-patents-2974">in court</a>, in the end the only opinion that matters is that of the users. </p>
<p>Five years ago, nobody would have expected a phone that could function as a <a href="https://theconversation.com/explainer-what-is-gps-12248">GPS</a>, camera, diary, document editor and generic entertainment machine (among myriad other functions). Who could dare imagine what these devices might offer five years hence?</p><img src="https://counter.theconversation.com/content/17044/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jason But does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>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…Jason But, Senior Lecturer, Centre for Advanced Internet Architectures , Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/170702013-08-14T13:30:19Z2013-08-14T13:30:19ZBlackBerry has a future, but it’s not in handsets<figure><img src="https://images.theconversation.com/files/29251/original/k33kdmhn-1376473206.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Lily Cole contemplates BlackBerry options.</span> <span class="attribution"><span class="source">Matt Crossick/PA</span></span></figcaption></figure><p>The news that BlackBerry is <a href="http://www.bbc.co.uk/news/business-23670317">considering “strategic alternatives”</a>, including a possible sale, will come as no surprise to anyone who has followed its decline in recent years. Once a smartphone pioneer, BlackBerry now has <a href="http://techcrunch.com/2013/08/07/android-nears-80-market-share-in-global-smartphone-shipments-as-ios-and-blackberry-share-slides-per-idc/">just 3%</a> of the global market. But even if its phones will never catch up with the iPhone or Android options, all is not lost for BlackBerry as a company. </p>
<p>Few people put much faith in BlackBerry these days, partly because the smartphone industry seems to live off radical innovation, and BlackBerry is not delivering it. The story thus goes that investors should ignore firms that have few major novelties up their sleeve. BlackBerry seems a case in point.</p>
<p>This is but a crude reading of events. Samsung, for instance, has done very well for itself in the smartphone era through improving and perfecting technologies pioneered elsewhere, using essentially the same strategy Nokia so successfully applied in the feature-phone era. Even in high-tech industries with rapid product redundancy, this kind of incremental innovation is the bread and butter activity for most firms.</p>
<p>Firms still in the game, that is. For there is one context in which more radical initiatives are rightly called for: firms that find themselves in continuous gradual decline, riding out the wave of bygone technology generations, and having failed to switch in time to the successor generation. </p>
<p>Nokia is typically seen in this light, having long underestimated the disruptive potential of operating systems open for third-party app developments. Another is BlackBerry. Among other things, it did not really look beyond its classic Qwerty keyboard, even as touchscreens emerged as the dominant design.</p>
<p>As the extent of the damage became more and more visible, both firms instigated turn-around programmes. They focused - mistakenly - on catching up. Nokia tied itself to Microsoft, which belatedly tried to mimic an Apple-esque app ecosystem, and staked its fortune on me-too smartphones, the Lumias. </p>
<p>BlackBerry brought out the Q10/Z10 and a new version of its operating system. These products are of decent build but cannot disguise the fact that competitors are already much further down the learning curve, with sizable brand followings. BlackBerry and Nokia/Microsoft also seem to want to wish away the current winner-takes-all phenomenon in smartphone operating systems.</p>
<p>The inconvenient truth is that 11th-hour turn-around initiatives should concentrate on innovating outside established trajectories. Trying to beat new market leaders at their own game is futile. What is needed is a move to a less contested space, where laggards can again start to create a momentum. Ideally, such moves leverage some company-specific strength. For BlackBerry, this new space might be mobile device management, banking on its enterprise server advantage.</p>
<p>BlackBerry’s Enterprise Server (BES) is the main reason why the company has not yet crashed and burned as badly as it could have. Business clients have hesitated to abandon the secure working environment and efficient integration that BES offers, even if the BlackBerry handset experience was lagging. </p>
<p>Some recent activities show that the company could be going in this direction. Most notably is the release of the Secure Work Space app that allows iOS and Android users to benefit from BES. BlackBerry Balance should be extended to non-BlackBerry devices too. Firms are increasingly device-agnostic, but their security needs remain. It is in this new area of mobile device management, including mobile app management and secure connectivity, that BlackBerry’s greatest prospects lie. </p>
<p>In due course, there will be other parties interested in this field, including mobile operators that are ogling the device management needs arising from the bring-your-own-device (BYOD) trend. And newer firms such as MobileIron and AirWatch are starting to attack. But at least the rules of the game for this emerging market are not yet established. BlackBerrry’s server platform might allow it to put some distance between itself and followers, building a leadership position once again.</p>
<p>Revamping devices not only presents a gargantuan uphill battle for RIM in the medium term, it may also be a misguided strategic direction in the long run. Bear in mind that handsets are becoming increasingly similar, no matter how much marketeers struggle to have you think differently. The dominant design of a rectangular touchscreen will increasingly serve as a window to a 4G cloud, nothing more. Users will be able to access most apps from most phones, either because Android becomes the dominant platform or because the next generation of html coding will decouple access to applications from operating systems (which, by the way, could also run in the cloud). </p>
<p>So why would consumers pay a premium for any one device if all devices are equally capable of connecting to the net? Beyond screen quality and maybe battery life, there is little that will set a future Samsung or Apple phone apart from others.</p>
<p>Providing device-agnostic services to corporate clients thus may hold the greater potential for BlackBerry. Its management might not normally be courageous enough to abandon its former mainstay in devices, but a new strategic investor could provide the necessary jolt.</p>
<p>Another former industry casualty, Siemens’ mobile device unit, was not fortunate enough to retain an advantage like BlackBerry’s BES, and thus was bought at scrap value and bled dry. BlackBerry still offers investors a reasonable shot at success in a new market and should not be written off.</p>
<p><em>An earlier version of this article was published by <a href="http://www.troymedia.com/2013/07/05/blackberry-has-one-last-chance-to-survive/">Troy Media</a>.</em></p><img src="https://counter.theconversation.com/content/17070/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ronald Klingebiel researches and advises companies in the telecommunications industries. His work attracts support from both corporate and government funding sources.</span></em></p>The news that BlackBerry is considering “strategic alternatives”, including a possible sale, will come as no surprise to anyone who has followed its decline in recent years. Once a smartphone pioneer…Ronald Klingebiel, Assistant Professor of Strategy, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/163202013-07-30T04:49:48Z2013-07-30T04:49:48ZQuantum computers: coming to a store near you?<figure><img src="https://images.theconversation.com/files/28217/original/tqkwf6kn-1375062646.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The next big thing: is quantum computing close to being a commercial reality?</span> <span class="attribution"><span class="source">Image from www.shutterstock.com</span></span></figcaption></figure><p>Mike Lazaridis, founder and former CEO of BlackBerry, may be forgiven for not having the foresight of recognising the threat that the iPhone and Android smartphones would pose to his business. However, he may be leading the way in another area by backing a future technology that could revolutionise computing. </p>
<p>Since 1999, Lazaridis has <a href="http://www.technologyreview.com/news/516536/the-bell-labs-of-quantum-computing/">invested</a> $270 million in the Institute of Quantum Computing at the University of Waterloo in the hope that this would lead to the commercialisation of quantum computers and quantum technologies.</p>
<p>Lazaridis is not alone in investing in quantum computing in Waterloo. A further $490 million has been invested by the Canadian Government as well as the state of Ontario, and including $100 million from the University of Waterloo itself. </p>
<p>As futuristic as this sounds, Lazaridis and Canada are not alone in believing that quantum computing is an area worth investing in. Google and Lockheed Martin have <a href="http://www.wired.com/wiredenterprise/2013/06/d-wave-quantum-computer-usc/">each bought</a> a multi-million dollar quantum computer from D-Wave which claims to be a 512-qubit machine. The Hebrew University of Jerusalem has <a href="http://www.jpost.com/Health-and-Science/New-Worlds-A-quantum-leap-in-computing-and-communications-320486">recently</a> assembled 20 inter-disciplinary academics in a Quantum Information Science Center to explore the opportunities that quantum computing will present.</p>
<p>Conventional computing’s progress is slowing down as it becomes increasingly difficult to cram more circuitry onto silicon chips. While processors have followed <a href="http://en.wikipedia.org/wiki/Moore's_law">Moore’s Law</a> for some time, roughly doubling in capacity each year, that progress has slowed and will continue to slow. For the computing industry generally, mobile has become more important and CPUs are generally considered fast enough. The engineering challenge is to produce processors that consume less power.</p>
<p>At the high end, computing also takes huge amounts of resource as supercomputer tasks produce their massive computational capability by scaling out, adding more and more processors to the task. This approach also has its limits and in part it comes back to a limit on resources and power. Quantum computing offers a way of circumventing these problems and capable of providing processing power that is simply not possible through conventional means.</p>
<p>For this to happen however, you need to be able to build quantum computers. This is something that is still challenging the best minds. For a start, there are a variety of different ways in which the fundamental component of a quantum computer — the qubit — can be physically represented. Each approach has its advantages and disadvantages. Researchers at UNSW <a href="http://theconversation.com/australian-breakthrough-brings-quantum-computing-closer-9709">for example</a> have implemented this using the spin of <a href="https://newsroom.unsw.edu.au/news/technology/breakthrough-bid-create-first-quantum-computer">electrons in a phosphorous atom</a> embedded in silicon. The area becomes even more esoteric when you consider that qubits can interact with each other or become “entangled”, and this allows for implementation of types of calculation that are not possible on conventional computers.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/28075/original/hjwntj79-1374740800.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/28075/original/hjwntj79-1374740800.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/28075/original/hjwntj79-1374740800.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/28075/original/hjwntj79-1374740800.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/28075/original/hjwntj79-1374740800.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/28075/original/hjwntj79-1374740800.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/28075/original/hjwntj79-1374740800.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">DWave Quantum Computer.</span>
<span class="attribution"><span class="source">http://www.wired.co.uk/news/archive/2011-05/31/d-wave-quantum-computer</span></span>
</figcaption>
</figure>
<p>In the case of the company D-Wave, their claims to have built a quantum computer were treated with <a href="http://www.nature.com/news/computing-the-quantum-company-1.13212">extreme scepticism</a> when they first announced their computer in 2007. It took researchers five years to provide evidence that the computer was in fact operating at the quantum level and for some of that scepticism to abate. The computers cost in the region of $10 million or more each and so, if nothing else, this is a fundamental marketing problem that they need to resolve if other customers are going to buy into the technology.</p>
<p>The need for this technology is clearly there. As we process ever-increasing amounts of data and rely on artificial intelligence and sophisticated algorithms to make sense of it, we will need to have the computing resources to do this with. This not only has applications in scientific and medical research, but in everyday businesses that have to deal with their own version of Big Data. </p>
<p>Initially, the range of customers for quantum computing systems will largely overlap with those using high performance computers. With technologies that enable the currently impossible, it often takes their general availability to really develop the range of products and devices this technology will eventually end up making possible. </p>
<p>The area of research in quantum computing is a really clear example of where seemingly rarefied research has direct potential impact not only on science but on society and industry as a whole. The marker for this is the willingness of venture capital to invest in technologies that are still barely off the research bench. Despite Mike Laziridis claiming that his investments are largely philanthropic, for him and others, the potential upside is huge.</p>
<p><em>This article was written with assistance from Professor Jingbo Wang of the quantum dynamics and computation research group at UWA.</em></p><img src="https://counter.theconversation.com/content/16320/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Glance does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Mike Lazaridis, founder and former CEO of BlackBerry, may be forgiven for not having the foresight of recognising the threat that the iPhone and Android smartphones would pose to his business. However…David Glance, Director, Centre for Software Practice, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/118922013-02-01T00:49:24Z2013-02-01T00:49:24ZA juicy BlackBerry 10 won’t make BlackBerry phones more desirable<figure><img src="https://images.theconversation.com/files/19761/original/pvt4g2fn-1359673738.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Research in Motion has reinvented itself as BlackBerry — and has released two new phones to boot — but its smartphone market share will be far from peachy.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>Research In Motion (RIM), who as of this week officially changed its name to BlackBerry, has come a long way since <a href="http://www.cbc.ca/news/interactives/timeline-rim/">its beginnings</a> in Waterloo, Canada in 1984. Started by two engineering students, Mike Lazaridis and Douglas Fregin, the company initially concentrated on consulting and setting up wireless point-of-sale equipment. In 1992, Jim Balsillie joined the company as it was creating two-way wireless paging, a precursor of what would become BlackBerry Messaging. The first BlackBerry device providing email and two-way paging was introduced in 1998, the year after the company had listed on the Toronto Stock Exchange. By 2007, the company was worth $68 billion and became Canada’s most valuable company.</p>
<p>And then along came Apple and Google. </p>
<p>In the US, <a href="http://www.newyorker.com/talk/financial/2012/02/13/120213ta_talk_surowiecki">BlackBerry fell</a> from 44% of the market in 2009 to less than 10% in 2012. Its stock price <a href="http://www.newyorker.com/talk/financial/2012/02/13/120213ta_talk_surowiecki">has fallen</a> from a high of $144 in 2008 to around $13 today. Worldwide, RIM <a href="https://www.idc.com/getdoc.jsp?containerId=prUS23916413">shipped less than</a> 4.6% of all smartphones. </p>
<p>BlackBerry achieved its popularity because, at the time, it offered businesses a secure way of giving their staff access to email. The characteristic BlackBerry keyboard provided an efficient means of navigating and dealing with email. Compared to other phones on the market, especially the clunky Windows-based phones of the time, the BlackBerry was far better. More importantly, it was a phone that corporate IT departments liked. BlackBerry’s rise to prominence was during a period when decisions about corporate mobile platforms were still exclusively a decision made by the IT crowd. Users had no say, but generally didn’t complain because there was clearly nothing better.</p>
<p>But then things changed. Apple and Google caught up and surpassed BlackBerry in providing tools to keep the IT department happy. This allowed the IT departments to give their staff, usually led by the executives, the ability to use their own devices at work, increasingly iPhones and Android smartphones. By comparison, the BlackBerry began <a href="http://www.nytimes.com/2012/10/16/technology/blackberry-becomes-a-source-of-shame-for-users.html?_r=0">to be seen</a> as being outdated and even “embarrassing” to own.</p>
<p>Of course, as with Nokia and Microsoft, RIM has sought to reinvent its phones based on a new operating system. The new OS, BlackBerry 10, was <a href="http://techcrunch.com/2013/01/30/rims-first-blackberry-10-devices-to-make-u-s-debut-in-march-coming-to-all-four-major-carriers/">launched this week</a> alongside two new phones the Z10 and Q10. Reviews of the phones and the OS have been largely positive, highlighting innovative features such as the use of gestures to navigate between applications, preview email and enage with social media. But universally, and almost without exception, the opinion has been that it is too little, too late. There is also the stigma of BlackBerry. If it is <a href="http://www.dailytech.com/Uncool+Apple+iPhone+Loses+Ground+in+Asia/article29763.htm">now becoming</a> “uncool” to own an iPhone, this is nothing compared to how uncool BlackBerry is perceived to be. BlackBerry was never really a consumer-oriented phone even in its heyday, and it is consumers — not businesses — that make up the largest portion of the smartphone market now.</p>
<p>Other than providing yet another option for a smartphone that is not Apple, Android or Windows or from brand loyalty, there is no compelling reason for anyone to choose a BlackBerry. RIM/BlackBerry has done well to convince the number of application developers it has to port their applications to the new platform — offering cash incentives helped. However, there will only be a fraction of the applications that are available for iOS and Android. </p>
<p>The story of RIM is another object lesson of a company and its leaders who refused to acknowledge that their success could be fleeting and who ignored competitive threats until it was too late. Even recently, European managing director Stephen Bates <a href="http://www.bbc.co.uk/news/business-21258205">refused</a> to mention or discuss the iPhone when pressed by the interviewer. All questions about how BlackBerry 10 compared to the iPhone were simply ignored. It was almost like there had been an edict from the CEO banning any mention of Apple or Samsung under the threat of some extreme penalty!</p>
<p>The launch of BlackBerry 10 may slow BlackBerry’s decline into irrelevance, but BlackBerry’s final destination is still the same.</p><img src="https://counter.theconversation.com/content/11892/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Glance does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Research In Motion (RIM), who as of this week officially changed its name to BlackBerry, has come a long way since its beginnings in Waterloo, Canada in 1984. Started by two engineering students, Mike…David Glance, Director, Centre for Software Practice, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/28092011-08-11T02:46:36Z2011-08-11T02:46:36ZHackers squeeze BlackBerry for spilling juice on London riots<figure><img src="https://images.theconversation.com/files/2843/original/aapone-20110809000336814423-britain_riots-original.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Has TeaMp0isoN missed the point with its latest hacking stunt?</span> <span class="attribution"><span class="source">Kerim Okten/AAP</span></span></figcaption></figure><p>The hacking of BlackBerry’s <a href="http://blogs.blackberry.com/">official blog</a> by the mysterious collective <a href="http://en.wikipedia.org/wiki/TeaMp0isoN">TeaMp0isoN</a> raises serious questions.</p>
<p>This <a href="http://theconversation.com/hacking-cracking-and-the-wild-wild-web-738">black-hat</a> hacking group, founded in 2009, has so far claimed responsibility for <a href="http://www.zone-h.org/archive/notifier=TeaMp0isoN">more than 1,400 attacks</a>, including the <a href="http://slatest.slate.com/posts/2011/06/25/tony_blair_hacked_by_group_team_poison.html">extraction and release of private information</a> belonging to former British prime minister Tony Blair.</p>
<p>The TeaMp0isoN hackers <a href="http://blackberryrocks.com/2011/08/09/teamp0ison-hacks-official-inside-blackberry-blog-leaves-message-rim/">defaced</a> the InsideBlackBerry blog – which publishes tips and news for the BlackBerry-user community – <a href="http://static.blackberryrocks.com/wp-content/uploads/2011/08/teampoison-hacks-blackberry-blog.jpg">publishing a missive</a> stating they were outraged by the intention of Research in Motion (RIM) – a BlackBerry manufacturer – <a href="http://www.theinquirer.net/inquirer/news/2100406/rim-offers-help-uk-police-track-rioters">to cooperate with UK police</a> to identify <a href="http://theconversation.com/the-english-riots-it-wasnt-youth-gangs-2805">looters</a> and rioters.</p>
<p>While the Apple iPhone is the most popular smartphone in the UK, <a href="http://stakeholders.ofcom.org.uk/market-data-research/market-data/communications-market-reports/cmr11/uk/1.39">BlackBerry is the smartphone of choice</a> among young adults (16 to 24 years old) and teens. </p>
<p>In both demographics, BlackBerry holds a 37% market-share, the next-most-popular device being the iPhone, preferred by 25% of young adults and 17% of teens.</p>
<p>BlackBerry devices have a <a href="http://www.networkworld.com/news/2010/102510-android-security-improves.html?page=2">long-standing reputation</a> for data security – users’ information is encrypted using the <a href="http://www.tropsoft.com/strongenc/des3.html">Triple DES</a> and <a href="http://theconversation.com/cracking-bin-ladens-computer-code-unlikely-1096">AES</a> encryption schemes.</p>
<p>TeaMp0isoN argued that innocent people will be caught up and wrongly punished because “the police are looking to arrest as many people as possible to save themselves from embarrassment”. </p>
<p>TeaMp0isoN claim to have broken into BlackBerry’s database and stolen private account information. They have – ironically enough – threatened to publish such information should RIM go ahead with plans to give the police access to user’s personal information.</p>
<p>The hacking collective also say they do not support the rioters except for those “that are engaging in attacks on the police and government”.</p>
<p>So what are we to make of this particular hack? Do the TeaMp0isoN hackers have a point – however poorly expressed – that RIM should not be assisting police? Is RIM acting in an illegal or immoral manner by saying they will cooperate with the police?</p>
<h2>Legality</h2>
<p>Let’s look at the issue of legality first. In EU countries (and in Australia and the US) any company offering communications services to the public is bound by legislation relating to <a href="http://www.efa.org.au/Issues/Privacy/tia.html">Lawful Interception</a>. </p>
<p>These obligations include delivery to law-enforcement agencies of the content of communication, as well as information about that communication, such as recipients, location, time of day and so on. </p>
<p>In the past, it’s usually been the responsibility of the telecommunications companies to provide relevant information to law-enforcement agencies. </p>
<p>But with the advent of newer players in the communications field – such as internet service providers (ISPs) and <a href="http://en.wikipedia.org/wiki/Application_service_provider">application service providers (ASPs)</a> – the obligation falls just as strongly on them. </p>
<p>EU legislation has followed the US in not differentiating between carriers (telecommunications companies) and carriage service providers (ISPs and the like). </p>
<p>Consequently, BlackBerry, as a company operating a communication service used in the UK, almost certainly has obligations to cooperate with the police in their investigations.</p>
<p>Of course, there are all sorts of issues related to international law that complicate matters, and there are many technical challenges in carrying out intercepts of internet traffic.</p>
<p>But RIM, in saying they are going to cooperate with the UK police, are most likely doing nothing more than stating they will do what they are obliged to do anyway.</p>
<h2>Morality</h2>
<p>So what of the morality of RIM cooperating with the police? From the outside it seems difficult to understand how looting shops, torching cars and houses and <a href="http://www.heraldscotland.com/news/home-news/why-do-we-have-to-kill-one-another-why-are-we-doing-this-1.1116906?localLinksEnabled=false">killing innocent bystanders</a> can be justified. </p>
<p>Assisting the police to bring a swift end to the riots would seem to be the morally correct thing to do – so if RIM can assist, it should. </p>
<p>The moral good of stopping the violence would seem to outweigh dubious concerns about the police wrongly arresting people.</p>
<p>Finally, there is the question of the morality of a shadowy, anonymous group of hackers attempting to blackmail a company to accede to its demands. </p>
<p>Personally, I think that’s morally quite indefensible.</p><img src="https://counter.theconversation.com/content/2809/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Philip Branch does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The hacking of BlackBerry’s official blog by the mysterious collective TeaMp0isoN raises serious questions. This black-hat hacking group, founded in 2009, has so far claimed responsibility for more than…Philip Branch, Senior Lecturer in Telecommunications, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.