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BlackBerry to cut 4,500 jobs, predicts 2nd quarter loss of $950M

162 points| mrcharles | 12 years ago |cbc.ca

152 comments

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[+] spodek|12 years ago|reply
The timeless story of Ozymandias -- https://en.wikipedia.org/wiki/Ozymandias -- (if you don't know the 1818 sonnet by Shelley, read it before downvoting. It's relevant and timeless)

I met a traveller from an antique land

Who said: "Two vast and trunkless legs of stone

Stand in the desert. Near them on the sand,

Half sunk, a shattered visage lies, whose frown

And wrinkled lip and sneer of cold command

Tell that its sculptor well those passions read

Which yet survive, stamped on these lifeless things,

The hand that mocked them and the heart that fed.

And on the pedestal these words appear:

`My name is Ozymandias, King of Kings:

Look on my works, ye mighty, and despair!'

Nothing beside remains. Round the decay

Of that colossal wreck, boundless and bare,

The lone and level sands stretch far away".

EDIT: Thanks for the link to the excellent Breaking Bad video. For what it's worth, I haven't seen an episode since season 3 so didn't realize the coincidence. My pop culture connection would have been to Watchmen.

[+] absherwin|12 years ago|reply
Kipling's The Palace is also fitting perhaps even more so for those building today's successful platforms: http://www.kipling.org.uk/poems_palace.htm.

WHEN I was a King and a Mason - a Master proven and skilled

I cleared me ground for a Palace such as a King should build.

I decreed and dug down to my levels. Presently under the silt

I came on the wreck of a Palace such as a King had built.

There was no worth in the fashion - there was no wit in the plan -

Hither and thither, aimless, the ruined footings ran -

Masonry, brute, mishandled, but carven on every stone:

"After me cometh a Builder. Tell him I too have known.

Swift to my use in the trenches, where my well-planned ground-works grew,

I tumbled his quoins and his ashlars, and cut and reset them anew.

Lime I milled of his marbles; burned it slacked it, and spread;

Taking and leaving at pleasure the gifts of the humble dead.

Yet I despised not nor gloried; yet, as we wrenched them apart,

I read in the razed foundations the heart of that builder’s heart.

As he had written and pleaded, so did I understand

The form of the dream he had followed in the face of the thing he had planned.

When I was a King and a Mason, in the open noon of my pride,

They sent me a Word from the Darkness. They whispered and called me aside.

They said - "The end is forbidden." They said - "Thy use is fulfilled.

"Thy Palace shall stand as that other’s - the spoil of a King who shall build."

I called my men from my trenches, my quarries my wharves and my sheers.

All I had wrought I abandoned to the faith of the faithless years.

Only I cut on the timber - only I carved on the stone:

"After me cometh a Builder. Tell him, I too have known."

[+] jmduke|12 years ago|reply
There's something particularly ironic about calling Ozymandias timeless.
[+] themckman|12 years ago|reply
Certainly relevant, but, Breaking Bad fan?
[+] dev_jim|12 years ago|reply
Jeez man, Breaking Bad was just last week. Show a little originality in your postings.
[+] martythemaniak|12 years ago|reply
I've been thinking about RIM lately and I think they basically had chances to turn themselves around, but took neither.

The first was in '08/'09 - shortly after the iPhone. Some companies (Google, Samsung) saw where the industry was going, made the appropriate decisions and are now profiting handsomely. In hindsight, that was the right time for RIM to acquire QNX and start on BB10, which might have done very well had it come out in 2011. With decent hardware, a solid OS, their own style and riding on BBM (big at that time), they might have staked a sustainable 10-15% chunk of the market.

The second chance was '10/'11, around the time of Nokia's Burning Platform Memo. This is when RIM started on BB10, but as we see now, it was already too late. Had they bet heavily on Android and on their strengths (security, gov & enterprise sales), they might be doing pretty-well today.

I hope the Waterloo area survives this well.

[+] ChuckMcM|12 years ago|reply
These are always more easily seen looking from the future into the past, than they are in the past looking to the future.

Few companies, with the market share RIM had, see threats as 'near term'. Fewer still have a deep appreciation for the entirety of the technology stack and the time it takes to move things. This is especially true of young executives but can happen to anyone.

RIM's technology stack matured over many years, from idea to business juggernaut. What that tells you is that moving the stack is also going to take years, so if you're experienced you start looking 5 - 6 years out not 1 - 2 years out.

When the iPhone hit, and Google was close behind, that was a huge signal. But Ballmer and Microsoft dismissing it, was a huge counter-signal. If you're an enterprise IT company, and the biggest company in Enterprise IT in the market place is dismissing the iPhone as a 'fad', you might be inclined to believe them rather than your own people who are saying "this is a threat".

At some point you get behind the power curve. In airplanes once you are behind the curve there is literally nothing you can do which will prevent you from eventually crashing. The same it true in companies. RIM apparently decided early on that Microsoft was a more credible indicator of the future than Apple/Google for their marketplace. And they have paid the ultimate price for that.

[+] rogerbinns|12 years ago|reply
They lost me for two reasons. The first was updates and bug fixes. For example on my BB pausing the music player resulted in the battery being drained flat in less than an hour. They fixed that but of course the update never made it my phone and carrier. Add in 5 minute boot times, and randomly finding it locked up and needing a physical reset. Or the survey on a website about what your favourite app was to daily reboot your phone!

The second reason was them not standing behind their hardware. The warranty was a year. The bluetooth module failed after one year and 3 months, and it turns out this happened to a large number of people with that model. Tough luck.

There is so much choice these days, that narrowing down is done by using any reason. That is why I wouldn't touch another BB and as a recommender to my friends they don't either. This kind of thing can be fixed, but it requires a long track record of redemption. (HTC is also on the do not touch list due to a lack of sustained redemption.)

[+] incision|12 years ago|reply
>"...their strengths (security, gov & enterprise sales), they might be doing pretty-well today."

Yeah, while pretty much everyone witnessed and understands the failure of RIM to respond to the iPhone and hardware/OS missteps it might not be so well known that they were failing to properly service their existing strengths at the same time.

In my experience, lots of Enterprise/Government folks really didn't and likely still don't care about touchscreens and apps (for their employees), just email/PIN.

Problem was, the sometimes painful software/support plus lengthy, too frequent SRP outages ensured that BES and the Blackberries connected to them would be abandoned at the first opportunity.

[+] w1ntermute|12 years ago|reply
They should've moved to Android by 2011, when it was obvious that it was going to become dominant. If they'd built touchscreen phones with slide-out keyboards (like the Motorola Droid) and built an Android-based OS that also included their proprietary messaging and email solutions, I imagine they would be quite successful now.
[+] Pxtl|12 years ago|reply
Yeah, I really worry about Waterloo. The city is basically a company town. If Rim folds, all the geeks could roll up their tracks and head for Toronto or the USA, leaving the city broken. I mean, they'd still have the university...but that's not enough.
[+] rorrr2|12 years ago|reply
They still have their chances with Android.

All they have to do is make the best damn Android devices.

Considering they have money, they can do it.

Other than that, nothing short of miraculous futuretech invention-acquisition will save them.

[+] bsaul|12 years ago|reply
started developping apps for mobile in 2009. at that time, i aimed for ios development and blackberry. it took me 2 months to get my first app on ios, and i thought "ok, now let's start learning about blackberry".

So, i downloaded their doc. iirc, they had three ways to develop apps. one was using web technology, and you couldn't do much. then they had two different sets of java apis : an old, discontinued one, with which you seemed to be able to have things work, and a new one, soon to be released, and undocumented.

so i installed their sdk, on my mac, and tried to run a "hello world". but their sdk required windows, because the simulator didn't exist on mac. i had just bought and dual-boot installed a windows 7. but the sdk was just for xp, so i had to run an XP vm inside my windows. then i launched eclipse, to launch the simulator, to launch the Java program that was supposed to run my hello world.

i never was patient enough for that hello world to show.

then i said " well...let's get back to that once a customer ask for a blackberry development".

and guess what, that customer never came.

[+] JesseObrien|12 years ago|reply
I had almost this exact same scenario happen to me. As a developer, I was excited to see what new fun things at the time (2009) were coming out of RIM. To my dismay, like yours, I couldn't even get a hello world to run after much tinkering and configuring. After I learned that they didn't even use the SDK they released into the wild in their own development, I knew it was a lost company. Dogfood and all that.
[+] epoxyhockey|12 years ago|reply
so i installed their sdk

In 2010, I didn't even get this far.

[+] maxsilver|12 years ago|reply
It's unfortunate, as someone who just purchased a Q10 (switched from Android), I think they've finally got their act together and released something excellent.

The Q10's battery life is great, the hardware keyboard is solid and travels well. The Paratek antenna gets the best reception and data connection of any device I've ever used. The BB10 software isn't great, but it's decent. (It's certainly far better than where WebOS / iOS / Android was when they launched. Even today, BB10.2 is significantly better / more powerful than Windows Phone 8, even if the UI is less well defined).

Their story, to me, seems almost down to timing. They're executing pretty well right now, it's just two to three years too late.

It will be sad to watch all that hardware die. In a year or two, there probably won't be any devices available that have a large battery, solid hardware keyboard, and decent cellular data reception.

[+] GrinningFool|12 years ago|reply
This is frustrating - I agree that they've finally gotten their act together, particularly with 10.2. The writing has been on the wall for a while - I stopped building apps for them earlier this year.

I've tried Android and iPhone and don't particularly want to return to either one. The former because of too many apps that want all the permissions under the sun while the OS offers a complete lack of fine-grained controls of them[1], and a subpar UI experience (subjective, I know). The latter due to lack of control without rooting it. My windows 8 desktop experience has spoiled that OS for me on a phone, fairly or otherwise.

But it begins to look like I will have no choice very soon. I hope they manage to pull out of this - they're still releasing a new flagship, and have other irons in the fire - but it's not looking good.

[1] as in 'yes, let the app get to GPS, but no do not let it get to my personal data or phone info'. Something BBOS legacy offered, and BB10 only slightly less - when you make an app you were expected to plan for the user to deny functionality and degrade nicely.

[+] contextual|12 years ago|reply
Agreed. The Q10 is a great phone, and the OS is the best I've used on any smartphone (iphone, lumia). The touchscreen / physical keyboard combo is awesome and unique to BlackBerry. They have a winning product here.

I can't wait for the Z30. That should bring more people to the fold.

[+] rimantas|12 years ago|reply
Alas, Q10 does not compete with iOS from 6 years ago.
[+] derefr|12 years ago|reply
Seems to me the best thing that could happen to them would be a bankruptcy followed by either a sell-off, or a split-off, of their design division (and all associated hardware contracts.) Then you'd have the equivalent of a fresh start-up making these phones, with no debts. They'd probably do pretty well.
[+] mrcharles|12 years ago|reply
Was digging up some numbers. In 2010, BlackBerry still sold more phones than Apple.

How the mighty have fallen.

[+] gummify|12 years ago|reply
What were the real problems then that led to their fall? Lack of technology innovation? badly run company and operations? lost touch with the consumer? All of the above?
[+] eli|12 years ago|reply
I was really hoping they could turn it around -- by all accounts the new phones are pretty nice and the mobile OS market could use some more serious competitors. But they have virtually no apps and no clear path to getting apps. Combine that with BYOD policies that let employees bring their own phones instead of having one issued and their whole sales model goes out the window.
[+] bio4m|12 years ago|reply
Speaking as an enterprise customer on long upgrade cycles, RIM/Blackberry badly judged the situation vis a vis their enterprise customer base.

The new Z10 was not compatible with their large install base of Blackberry Enterprise Server. Anyone still running BES at the time the Z10 was introduced was likely to be a shop interested in security and control of the mobile platform their end users were using.

Which is why businesses like my employer and many others kept buying BB OS7 devices (did you notice they didnt break numbers out and actually mentioned BBOS7 as a significant portion during their investor call ?)

TL;DR: They thought all their enterprise customers would upgrade fast, they guessed wrong.

[+] tossaway1900|12 years ago|reply
We're closing in on the launch of cross-platform BBM, and much of the work for that wasn't even done internally. They contracted that stuff out. Now they're cutting actual BB people. A lot of it is dead weight, and the usual bloated middle management, but I can't wait to see who else gets the axe here.

Make no mistake, the goal is to sell the company at this point. That is why BBM is suddenly the focus. They know that they aren't going to stay afloat with phone sales. They'll cut to the bone, and beef up one of their main commodities (BBM) until the sale happens.

[+] iamshs|12 years ago|reply
NO. Teary eyed. :(

3.7 million phone sales are nothing. Only if they had copied iOS the Samsung way in time.

[+] kunai|12 years ago|reply
Why? The problem isn't with the phones. The Z10 and Q10 are fantastic and BB10 is probably the best business-centric OS ever written. The problem is that the applications are just not there, and that people associate BlackBerry with reboots, battery pulls, and outdated, clunky software, even though that's not the case.

It's an image problem, not a phone problem. They can't market like Apple used to. If they could, they would get more sales, but their marketing is just pitiful.

[+] bdcravens|12 years ago|reply
Not sure if I agree with copying bit (I believe they should have carved a niche 2-3 years ago as THE Android keyboard phone to have), but indeed on the phones sold. 3.7M in a quarter? There were 5M iPhone 5 sales during its launch.
[+] toomuchtodo|12 years ago|reply
Or used Samsung hardware in their device! ;)
[+] Touche|12 years ago|reply
I sympathize strongly with the people who lost their job. I don't, however, sympathize with the company that made their decision to go it alone despite overwhelming evidence that there isn't room for another platform. iOS, Android, the Web. That's it. That's all there's going to be for the foreseeable future in mobile. Even Microsoft is failing at this. How much evidence does a company need to see that their strategy was doomed?

It's classic innovators dilemma. BlackBerry could think of nothing but protecting their existing business, even with failure staring them in the face. They should have been planning more for the next phase of the company (whether that be selling enterprise servers or whatever else) and made a small, cheap, play at restoring their phone business (probably by forking Android).

[+] moca|12 years ago|reply
I have built software for large BlackBerry customers and met with RIMM people before. 3 years ago, I had suggested they should create an enterprise-oriented Android phones, such like Amazon created media-oriented tablets. 3 years ago, RIMM was still the #1 in enterprise smartphone market, and they had great chance to succeed in that area.

However, most companies are afraid to compete on fair battle background (Android). So instead of one, RIMM chose to fight 4 battles at the same time, hardware, software, ecosystem, marketing, and it lost on all of them. Now it is too late to change the fate. RIMM management was too afraid to change (really really afraid). It is said when I met RIMM people, and saw they couldn't do anything to save the sinking ship.

[+] methodin|12 years ago|reply
If any new phone wants a decent market share they have to start with the developers - they are the ones who will carry it along until enough 2 year contracts expire to grow the user base. Blackberry simply failed on this front so it's no wonder they are struggling. They followed Microsoft's path of screwing developers which clearly was a bad move.

There is always room for new devices, though. If FF or Ubuntu develop the repertoire with the developers first they have a fighting chance. There are pretty much no companies left that can sell just on their history and existing fan-base alone.

[+] alex_c|12 years ago|reply
>They followed Microsoft's path of screwing developers which clearly was a bad move.

Can you elaborate? From what I've seen RIM made a pretty significant effort to court developers to its platform - the users and revenue just weren't there, so it was not that tempting for developers no matter what RIM said or did.

[+] eliben|12 years ago|reply
It's amazing what a killer the smartphone market turned out to be. Nokia. RIM. Microsoft are in bad trouble. Intel. who else?
[+] colmvp|12 years ago|reply
Is Intel really in any trouble? They're got a huge dominance on laptop/desktop processors, no?
[+] flatfilefan|12 years ago|reply
From what I have gathered they have not managed the growth hiring people below the original level. A company with 12000 employes should be unmanageable because of bureaucracy anyway. After some point new people only slow you down. Hope the old core is still there and something will finally come out of this.
[+] kineticfocus|12 years ago|reply
The juxtaposition of these two headlines on Ars struck me with some awe: "Grand Theft Auto V rakes in over $1 billion in three days", "Blackberry warns of near-$1 billion loss this quarter". Especially since they're more tangible 'billions' than the Instagram deal.
[+] Raphmedia|12 years ago|reply
Good riddance. I was a fan, until I actually had to contact their customer support.

Bought an android right after.

[+] verelo|12 years ago|reply
A long time ago i said RIM is the new Nortel. I think I can continue to stand by that statement.
[+] Finster|12 years ago|reply
Nortel? Or Novell? I guess both apply, but Novell seems to fit much better.
[+] mkr-hn|12 years ago|reply
Relevant Google Trends chart: https://www.google.com/trends/explore?q=google+android%2C+wi...

Blackberry's slide starts around October 2011. News search is a little more flat, but that probably reflects the fact that tech journalists like to compare the rise of one thing to the fall of another. Google search reflects what people are looking for in general, so it covers people looking up information on the phone and OS, not just news.

Oddly, Blackberry is still in the lead on image and shopping search. It was tied with iOS on youtube until recently.

[+] corresation|12 years ago|reply
Why "Google Android" instead of just "Android" (or alternately you could, I suppose, go with "Apple iOS"), because the latter much more closely mirrors what has happened in the market. Unless personal assistant robots have taken off corresponding with Android, I don't think it's being polluted much.
[+] FrankenPC|12 years ago|reply
Queue "bye bye Blackberry". They milked their corporate entrenched position for an admirable duration of time.