Wednesday, 13 May 2015.
In 2009, Blackberry, known as Research in Motion, was a leading player in the smartphone industry (Palenchar, 2013). The company had a 20 percent share of the smartphone market and had almost a monopoly in the business services sector using its business solutions. At that time, the company valued over $83 billion. US (Blackberry Still in a Jam, 2013). However, three years later, in 2012, the company’s share in the smartphone market declined to 5%. She also experienced financial shocks. It was a big decline for the company, which showed dominance a few years ago
This report examines the reasons for the low performance of the Blackberry and the subsequent financial problems that the company faces
According to Downes and Nunes (2014), the big destruction associated with the new type of innovation can significantly affect business stability over a short period of time. A large explosion of destructive effects has a significant impact on technology companies, as it is the result of the introduction of the best and cheap destructive technologies in the market (Downes and Nunes 2014). Due to the availability of the Internet, consumers may be aware of the major destroyers. If the disrupters are popular, they can influence the growth of the new organization through the use of operational technologies
In 2007, the market was presented with a touch screen, which was presented on the market by Apple iPhone. But Blackberry leaders continue to argue that “they had such a dominant position in the market, which was so lucrative.” They do not want them to be seen as their monopolistic position, the edges of the goods, which are radically different (Hessman, 2013). The Blackberry did not produce any innovative products or solutions, but was stuck in order to do what they consider to be workers at the time, thereby losing a significant share of the market
Unsatisfied product sales have led to financial problems faced by Blackberry. The company has released a Playbook tablet for the iPad, which was introduced by Apple (Blackberry Still in a Jam, 2013). However, the sale of Playbook Blackberry has been very disappointing, because it has not been able to sell well. The latest product of Smartphone is Z10, which also faces low sales, which was even much smaller than the expected company (Blackberry Still in a Jam, 2013)
The enterprise market is one of the major Blackberry drivers. However, it is under serious pressure
Problems with Blackberry face serious cash flow problems. The company reported a loss of 965 million units in the quarter. The company’s revenue fell 45 percent in 2013, and its position at the end of the third quarter fell from $3.2 billion to $2.6 billion in 2013. In addition, Blackberry had to write off $960 million in inventory (Blackberry Still in a Jam, 2013). This was influenced by bad sales of Z10. The Blackberry money is therefore associated with inventory that cannot be sold. As a result of the poor cash flow, the company introduced a rationalization programme, which created about 4,500 jobs, accounting for 40 per cent of the total workforce. As a result of the company’s inability to switch to its Z10 Smartphone shares, cash flows emerged as a result of the failure
The company’s profit forecasts were adversely affected by the launch of its flagship product. The Z10 smartphones were launched after several delays (Hessman, 2013). The technological market is dynamic and constantly in motion. The delay in starting the product significantly reduced the profitability of Blackberry (Blackberry Still in a Jam, 2013). The operating system for Blackberry is also outdated compared to Apple iOS and Google Android. This resulted in Blackberry being at a very disadvantageous position on the market
Blackberry has lost track of user preferences in smartphones. He used the keyboard on his phones for the first time. People who wanted to print from phones preferred to use the phone because it was much easier. However, “many smartphone users have switched to the sensory models” in the recent past (Austin, 2013), even though the touch screens have their demerits when it comes to input due to many typographical errors, improved screen size and improved user interface. Smartphones manufactured by Blackberry that supported the physical keyboard are no longer attractive to customers. This resulted in a significant loss of the Blackberry market share on the touchscreen smartphones
For many reasons, the low performance demonstrated in Blackberry was low. The company has no innovative skills and is unable to provide the desired solutions. Moreover, due to competition in the enterprise market, it also had poor earnings. The bad sale of the Z10 Smartphone flagship product has a multiplier effect to lower the profitability of the company, which hinders the flow of cash. The connections between all these factors contributed to the low performance of Blackberry
Osten, I. .. (27 September 2013). The future of the Blackberry is in doubt, the amateur keyboards are their own.
Connors, V. (27 September 2013). Blackberry posted losses like phones without sale. Inventory inventory requires about $1 billion.
Downes, L & Nunes P. (2014).
Hessman, T. (2013). Long failure on top. Extracted from www.industryweek.com
Blackberry still in a jam. If you are not private, this will not solve the company’s problem. (28 September 2013).
Company profile: Research In Motion Limited. (2013).
Palenar, J. (11 February 2013). Analysts: BlackBerry Facing Tough Battle. Extracted from www.twice.com