The encyclopedia · Strategy & Leadership · Strategic decision · 2007–2013
BlackBerry dismissed the touchscreen and its smartphone share fell from half to near zero
BlackBerry owned the smartphone market, then the iPhone redefined it around touch and apps. Clinging to its keyboards, BlackBerry's share fell to near zero.
BlackBerry · Apple · 2007-06
What happened
Research In Motion's BlackBerry dominated the early smartphone market, especially in the United States and among businesses, thanks to its physical keyboard, push email and secure corporate network. At its peak around 2009-2010 it held roughly half the US smartphone market and tens of millions of users worldwide. When the iPhone launched in 2007, RIM's leadership was confident: the BlackBerry's keyboard and enterprise features, they believed, were what serious users wanted.
That confidence became complacency. The iPhone and then Android redefined the smartphone around a large touchscreen, a web browser and an app store — a vision of the phone as a pocket computer, not a communication device with a keyboard. BlackBerry's first touchscreen answer, the 2008 Storm, drew poor reviews. The company kept betting on physical keyboards and its existing strengths while Apple and Google captured developers, apps and consumers. Its US user base peaked in late 2010 and then fell steadily.
The decline was fast and brutal. BlackBerry's stock fell about 87% between 2010 and 2013, a drop attributed largely to the iPhone. A last-ditch reboot, BlackBerry 10, arrived in 2013 — too late. By 2016, BlackBerry accounted for well under 1% of US smartphone users. The company that had defined the smartphone pivoted to software and cybersecurity, and eventually stopped making phones altogether. 'BlackBerry' went from a synonym for smartphone to a case study in missing a market you created.
Why it happened
- BlackBerry's leadership underestimated the iPhone, believing business users would always prefer a physical keyboard and secure email over a touchscreen.
- The company was slow to build a competitive touchscreen device and app ecosystem; its first attempt, the Storm, was poorly received.
- Its huge installed base and enterprise lock-in created a false sense of security, delaying the pivot.
- Apple and Google moved faster on the things that came to matter most: a great browser, an app store and a developer ecosystem.
The lesson
Your strengths can become your blind spots. BlackBerry's keyboard and enterprise lock-in made it slow to see that customers now wanted a touchscreen and an app store, not a better keyboard.
Aftermath
BlackBerry survived by reinventing itself as a cybersecurity and enterprise-software company under CEO John Chen, and its brand lives on in licensed phones and in the software inside cars and embedded systems. But as a smartphone maker it is the textbook example of an incumbent that created a category and then lost it to a better definition of the product. The lesson is a staple of strategy courses: the features that made you dominant can blind you to a shift in what customers value, and the installed base that feels like a moat can become an anchor.
Sources
- BlackBerry Limited — Wikipedia (smartphone leader, iPhone competition, decline)
- The Guardian, 15 October 2023 — The rise and fall of the BlackBerry (smartphone status symbol displaced by the iPhone's touchscreen; no phones manufactured since 2016)
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