What happened to Blackberry?

Last Updated on December 3, 2018 by Dave Farquhar

In the late 90s and early 2000s, the gadget that said more than any other that you had arrived was the Blackberry, a little device from Research in Motion that let you read your e-mail and respond to it from anywhere. And then it became old-fashioned just as quickly as it burst onto the scene. What happened to Blackberry?

You might be surprised to hear the company is still around and that you can still buy Blackberry phones. But the device that made it famous, not retro enough to be cool again, isn’t its future. And it knows it.

Blackberry’s rise

What happened to Blackberry?
What happened to Blackberry? It shifted from hardware development to a focus on software. Ultimately, computer security software.

Research in Motion was founded way back in 1984 by engineering students Mike Lazardis and and Douglas Fregin, who studied at the Canadian universities of Waterloo and Windsor, respectively. It’s a classic case of how a seeming overnight sensation can take years to develop. The company specialized in wireless communications, and its early successes centered around card readers and cash registers.

In 1999, Research in Motion released the product that made it a household name: The Blackberry 850 pager, which got its name from its miniature QWERTY keyboard’s resemblance to the fruit. It was different from other pagers in that it didn’t just talk to phone networks. It could also talk to a Microsoft Exchange server. This transformed e-mail. With a Blackberry, you could read and respond to e-mail even when you weren’t at your desk.

Some people called their Blackberry a “Crackberry,” because they’d develop a tendency to compulsively check the device for new e-mail messages, like a drug.

Blackberry, Exchange, and Windows

When the Blackberry 850 came out, many IT departments still focused on minicomputers and mainframes. The one I worked at was no exception.

That changed at my then-employer when some of the higher-ups discovered Blackberry 850s. The organization wasn’t too keen on throwing out its existing e-mail system. Part of the organization turned to shadow IT and stood up an Exchange server. Exchange was harder to manage than other corporate e-mail systems, and it certainly wasn’t cheaper, but it had the cool gadgets. If the Palm Pilot and Outlook wasn’t enough to get you to migrate to Exchange from a minicomputer or Lotus Domino and Lotus Notes, Blackberry probably was. Research in Motion changed its name to Blackberry, trading on the name recognition.

The Blackberry 850 gave Exchange a competitive advantage, and it took Windows along with it. If you wanted a Blackberry, you had to be on Exchange, and you had to be on Windows. This pushed Macintoshes to the fringes of corporate IT, although Apple would have its revenge. You probably have a pretty good idea how that happened. But it took a few years.

Adding the Internet

The product line quickly moved from just being a pager that could read and respond to e-mail, and pivoted to the smartphone market. By that I mean making phone calls, Internet access, and everything. This allowed Blackberry to move downmarket. Executives liked having access to e-mail all the time. Non-managerial types did often not, because it meant work encroached into non-working hours.

But once Blackberry devices had Internet access, non-managerial types wanted one. Having e-mail all the time was a burden. Having Internet all the time was a convenience. Soon, you started seeing billboards from cell phone providers touting the benefits of their service tied with a Blackberry.

And then, almost as suddenly as it burst onto the scene, you didn’t hear a lot about Blackberry devices anymore. What happened to Blackberry? Apple happened.

Apple’s revenge

In 2008, Apple released its first iPhone, a smartphone with a capacitive touch screen. This meant the screen could cover almost the entirety of the device. Some people preferred physical miniature QWERTY keyboards at first, but the larger screen made Blackberry devices seem old-fashioned. Apple’s operating system did a better job of encouraging third party software development. Blackberry tried to compete, even introducing a touch screen, but just couldn’t match Apple’s marketing.

And the iPhone worked with just about everything. This relegated the Blackberry to what we call “legacy” in IT. It survived in a niche, partly due to security, but it was no longer the must-have status symbol.

What happened to Blackberry? Transformation happened

What happened to Blackberry next? In 2013, the company quietly shifted from mobile to software under CEO John Chen. In November 2018, Blackberry surprised everyone by purchasing Cylance Inc For $1.4 billion. Cylance is a company that specializes in corporate antivirus based on artificial intelligence, giving it an advantage over McAfee and Symantec. It recognizes behavior, rather than mathematical equations, which means it does a better job of recognizing viruses that modify themselves as they work.

Cylance has a booming business because Symantec and McAfee and similar antivirus programs are much easier to fool. Officially, Blackberry bought Cylance so it could use its AI in other products, which fits into its overall strategy of shifting from hardware development to a focus on software.

But it’s possible Cylance could become Blackberry’s biggest source of revenue. I see it as transformational, like when Atari bought hard drive maker JTS and adopted its name. But I expect it to go better than the Atari-JTS venture did, since the transformation involves a proven portfolio.

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