AH Tech Talk: How the Mighty Fall – Blackberry Announces $1 Billion Loss and 4,500 Layoffs – Death is Near!

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Blackberry has just laid-off 4,500 people, and have announced a loss of $1 billion for the last quarter, failing to turn the Z10 into a success. A lot of us knew this was going to happen since a couple of years ago, and some of us even saw it coming since 2007, after the iPhone launched, because it wasn’t that hard to see that the leaders in the market at the time (Blackberry and Nokia) would think they have a lot to lose by “radically” changing course towards making smartphones the way Apple was making them (No physical buttons? One day battery life? What kind of craziness is that?!).

They resisted until they couldn’t anymore, to change course. Nokia basically waited until it replaced its CEO to do that, and that pretty much happened to RIM/Blackberry, too, although the former CEO bought the new QNX OS a few years before, but it wasn’t until after the new CEO took over that they finished the new BB10 OS for Blackberry.

This is what happens when companies get disrupted (Mike Masnick from TechDirt made a great short video explanation of it), and it’s the leaders of the industry that fall the hardest, because they usually are the slowest to change, and by the time they do change, the disruptors, or the nimbler companies that changed course much faster, are already very established in the market, and already have strong “new type of products” and brands.

Such a company would be Samsung, for example, which used to be 2-3x smaller than Nokia in the smartphone and feature phone markets, but they understood Android is part of that “future” that the iPhone jumpstarted. They understood that if they take advantage of it quickly, and make the best such “touchscreen smartphone” with Android, they can get ahead – which is exactly what they ended up doing, and Samsung is now the world’s largest smartphone manufacturer.

Unfortunately for Blackberry, even if they understood what was going on (they tried making some faulty touchscreen phones early on), they reacted way too slowly to it, and didn’t take it very seriously. By the time they really woke up and realized that if they don’t do touchscreen smartphones right, their company could collapse, it was already too late.

Now Blackberry is in the situation where it has to sell the company, if someone even wants it anymore. I assume there will be companies who will at least want their patents, and I hope Google will be one of the companies to buy some from them, because they should have much higher quality patents than Motorola did (and more recent).

Blackberry also owns elliptic curve cryptography patents through a company called Certicom that they bought earlier, and I’d really like to see Google or someone else buy them, and make them public domain, because most cryptographers agree that ECC is the future of cryptography, and it would be quite hindering for security on the Internet if those patents were used to attack the companies using such cryptography (especially now after all the NSA revelations). It would be even better if Blackberry themselves did it as a nice final gesture, but something tells me they’ll try to squeeze every last cent out of the company when they sell it in pieces.