BlackBerry smartphones pact will lapse, marking end of an era

Brilliant in their time

Forrester Research principal analyst Julie Ask said BlackBerry's smartphones were brilliant in their time, noting that they had solved some of the problems that had held back mobile phones from driving productivity.

Julie Ask

"Sending encrypted end-to-end email, and doing it over a network with almost no bandwidth… was a huge breakthrough," she said. "That they found a way to send and receive emails so fast, with so little bandwidth at relatively little cost? Brilliant."

Ask said the company innovated in other ways, including a QWERTY keyboard on its handsets as well as the BlackBerry Messenger. The instant-messaging application, released in 2005, came at a time when other mobile messaging options -- such as then-overpriced SMS messages -- were subpar.

Holger Mueller

But Holger Mueller, principal analyst at Constellation Research, said BlackBerry was unable to push beyond those early breakthroughs.

"BlackBerry lost because of its inability to innovate beyond the framework of its success, mainly the physical keyboard and a full-featured browser," he said. "The former was the key to its success, and users still miss a similar productive keyboard today. The latter was the telco standard for the smartphones of the era."

The smartphone dominance the company had enjoyed, Mueller said, was broken by Steve Jobs and the iPhone, which debuted in 2007.

BlackBerry lost because of its inability to innovate beyond the framework of its success.

"When the writing on the wall was clear, BlackBerry failed to innovate," he said. "When they got the smartphone OS right with BB10, it was too late."

Mueller said this was unfortunate, as BB10 was a well-designed, productivity-focused OS. But employees couldn't refuse the sleek new iPhone and its app store.

"That's the irony -- users and CIOs got rid of [their] BlackBerrys despite email volume being up," he said. "Business users went from being productive on the go to [becoming] lurkers and [doing] email at night."

Ask said the market for smartphone devices has changed dramatically, as buyers are looking for different features these days.

"The way Apple and Samsung and their competitors get people to buy is by the quality of the display, the quality of the camera, [and] a little bit about how snappy the phone [responds]," she said, adding that a company's app ecosystem was similarly important. "It's very hard to have a device on the market that doesn't have many users, because then people don't build for it." 

The newer BlackBerry smartphones run on the Android OS, but that provides no assurance that developers will tailor their apps to the devices. Increasingly, she said, ensuring apps work on a company's Android phone means closely mirroring the offerings from bigger firms, like Samsung, Huawei or LG.

BlackBerry's low market share

Tuong Nguyen, senior principal analyst at Gartner, said the relevance of the BlackBerry smartphone brand had waned well before this week's announcement.

Tuong Nguyen

"By the time the company stopped making its own phones, its global smartphone market share was well under 1%," he said, adding that Gartner estimated the company's market share at about .01% in 2016. "In fact, they had started dipping under the 1% threshold [around] 2013-2014."

Nguyen said TCL itself has had a low-single-digit percentage share of the global smartphone market since 2015.

"TCL's licensing of the BlackBerry brand name wasn't expected to -- and didn't -- have a significant impact on this situation," he said.

Analysts were skeptical that the company might return to the market.

Mueller said the market has space for a productivity-oriented company to do well as a software vendor. On the hardware side, however, any company looking to upset the existing vendors would have to excel at a feature like folding screens, projection, augmented reality and virtual reality, he added.

Ask said, although the prospect of BlackBerry devices returning to store shelves might be dim, she hoped the company would continue to shape the mobile market somehow.

"There are such brilliant scientists there that, hopefully, they're contributing in some ways," she said. "They were so good at what they did at the time."