I’m not making a prediction here — I’m pondering a possibility. I spent a day with BlackBerry last week and it brought back memories of how Apple displaced the company around a decade ago. I, like a lot of folks at the time, thought what Apple was attempting was impossible. However, after the fact, it didn’t even look difficult.
BlackBerry largely has completed its pivot to software and services, but a wave of new phones from its partners apparently will be coming to market shortly. Now, BlackBerry isn’t even going to try to displace Apple, so this is a “what if” look at how the company might go about doing to Apple what Apple did to it.
John Chen, BlackBerry’s CEO, is more Steve Jobs like than Tim Cook is, and Apple is hardly at the top of its game at the moment.
I’ll do some serious speculating and then close with my product of the week: the Holley Sniper EFI that can make your old car run like a new car.
Steve Jobs’ Magical Move
If we drop back a bit over a decade, Apple was dominant with the iPod but Steve Jobs realized that smartphones had the potential to absorb that market and displace it. Anticipating that wave, he first partnered badly, but he learned from his mistake and then developed his own device. Jobs made the decision to cannibalize the iPod and critically harm that market as he pivoted Apple to smartphones. In the process, he drove Palm out of the market, and dropped Research In Motion (RIM, BlackBerry’s previous company name) to its knees.
Even Microsoft was critically damaged, and the market disruption was instrumental in causing Bill Gates to fire his best friend, CEO Steve Ballmer. Anyone who might have suggested that any of these things would happen before the iPhone shipped would have been laughed off the stage. Yet in hindsight, it doesn’t look impossible at all. Steve Jobs made it look easy.
Ironically, there were people at both Palm and Microsoft who developed plans for an iPhone-like product before Apple. However, executives in both firms thought the ideas were stupid, and that anything but a business focus for those devices was stupid. They killed the programs, only to lose their own jobs as Apple pounded them for their mistaken views.
I think the real irony here was that Jobs saw a threat that he thought was a common vision, but he was the only top executive who seemed to hold it at the time. Given that Apple was the trigger for Android, it makes you wonder whether we’d still have iPods and BlackBerrys today had Jobs not made that pivot.
The market shift came with a lot of pain — not just for companies like Nokia, Palm and RIM, which had been dominant, but for users as well. Keyboard phones could be used blind — you could feel the keys. Business apps weren’t as numerous or as distracting. You could use those older phones and do something else at the same time more easily.
With screen-centric phones and virtual keyboards, people have to look at the devices. That makes multitasking while walking or driving far more dangerous, resulting in a substantial number of accidents and deaths, and spurring laws preventing the use of smartphones while driving.
As a side note, there is a growing interest in flip phones again, which suggests the market is looking for a change.
New vs. Old Apple
The Apple of this decade is very different than the Apple of last decade. Under Jobs, the company launched and sustained the iPod, iPhone and iPad. This decade, the company basically killed off the remains of the iPod, saw the decline of the iPad, and saw the iPhone’s growth stall (a revenue increase came from higher prices, not greater sales volume).
The Apple Watch didn’t rise, even though it arguably was the best in class. Macs once again are in decline, having lost ground to both Microsoft and HP. The HomePod, at least right now, is an embarrassing failure.
Apple seemed unable to do wrong last decade. During this decade, it has appeared unable to do right. If the U.S. continues down a trade war path with China, Apple may drop into decline due to the loss of China sales.
The firm continues to have massive financial resources, and it remains massively profitable, but it clearly has been off its game when it comes to execution. Its need to maintain margins has put it into a litigation war with one of its biggest suppliers, forcing it to use inferior components from firms like Intel.
This goes a long toward saying that compared to last decade, Apple is a bit of a mess at the moment. The market seems to be resisting the direction it has taken. By the way, I don’t think this is because Apple’s products suck — it is because it has lost the demand-generation and marketing capabilities that Jobs drove and funded.
That is not an uncommon problem, by the way. A textbook CEO mistake — literally, one that is covered in most Marketing 101 courses — is cutting marketing to increase margins. However, it seems that few CEOs took Marketing 101.
The World Has Changed
Back when the iPod came to market, and even when the iPhone arrived, the world for these devices was relatively safe. We did have malware and hostile nations, but they seemed focused on attacking PCs rather than phones, for the most part. Few knew about efforts of spy organizations to compromise phones.
Now we clearly have major efforts by all the major powers to penetrate these new classes of personal devices. You can even buy a box that allegedly will break the security on an iPhone. Once they have compromised your phone, these devices can listen to and report your conversations; turn on your cameras and, without your permission, capture intimate pictures; and help an attacker steal your identity.
The next big wave is artificial intelligence. It’s fascinating is that even though Apple arguably was first with Siri, it underinvested massively in developing the technology, allowing companies like Amazon and Google to take a stronger lead with better offerings.
In Apple’s defense, it seems to be trying to reverse this, but the fact that it started as the leader and then dropped to become a follower is troubling.
As we move from 4G to 5G, with the promise of far greater bandwidth and network performance, there are growing opportunities to host applications on the cloud and bypass Apple’s app store advantage. (Recall that Jobs wanted to have hosted apps initially, but the network and cloud just weren’t ready.)
What this means — much like what Steve Jobs avoided by creating the iPhone in the first place — is that an opportunity exists for a company to take the initiative from Apple, just as Apple took the initiative from Nokia, Palm, Microsoft and RIM (BlackBerry).
Security and Safety as Killer Apps
This is the opportunity that I think exists for a company like BlackBerry. Just as entertainment was the pivotal capability that Apple used to redefine the smartphone market and dominate it, security and safety are becoming equally compelling.
BlackBerry still dominates areas where security concerns are high, particularly in government.
While its current-generation devices run Android, they run it on top of a security layer that makes their licensed phones far more secure than other Android and iOS devices. This is the primary reason I still carry a BlackBerry phone.
I was part of an effort to quantify identity theft years ago, and the conclusion was that recovering from it could consume a year of the victim’s life and cost US$250K. BlackBerry’s DTEK capability is both unique and increasingly critical to those who are most concerned about their devices being compromised — and yet they still can run the vast majority of Android apps seamlessly.
BlackBerry is now more similar to Microsoft (Surface aside) then it is to the old BlackBerry, in that it doesn’t make its own phones, but its licenses its solutions. It is largely hardware-independent, which gives it the opportunity to leverage the capabilities of its licensees more effectively. Granted, it doesn’t yet have any tier one phone makers selling its products, but that could change. Samsung has licensed its technology in the past.
Being based in Canada gives BlackBerry an advantage when it comes to resisting attempts by both China and the U.S. to compromise the security of the devices it licenses. This is a unique and powerful advantage for those who really don’t want any government spying on them. I expect that a growing number of us have this concern at the moment, thanks to the Facebook disclosures.
As I said at the top, this is more “what if” than prediction. BlackBerry appears to have no interest in going after Apple, and Steve Jobs was unique in his unshakable belief that the impossible wasn’t.
Still, all the elements exist, much as they did a decade ago, to pivot the market to a new leader. The question is who will put them together to create something new and compelling.
One thing that is missing is Jobs’ ability to spin the market to his vision. He picked up that skill studying religious leaders in India. Being a manipulator with nearly unmatched capability gave him competence in marketing and an influence that remains unmatched in the market today.
Without that capability — even with Apple’s relatively weakness — an effort to displace the company would be problematic.
The question is, without Jobs, will anyone — including Apple — risk stepping up? Another firm to watch is Lenovo, which tried and failed to buy BlackBerry. It still could license from BlackBerry and build something amazing.
I have a car addiction and it is bad. My current project is taking a 1970 Jaguar XKE that was brutalized by a bad 327 Chevy engine transplant in the 1970s, and then an engine rebuild in the 1990s that was done by idiots, and making it drivable again. Compared to today’s electronic cars, these old cars are relatively unreliable. Often, fitting modern technology to make them better is problematic.
One of the best products I installed was the Holley Sniper EFI (electronic fuel injection) system.
This is a simple bolt-on product with matched plug-and-play accessory gauges. In a Jaguar, particularly of this era, the wiring can be problematic (some people equate Lucas electrics with something created by Satan).
However, with this solution and an easy couple hours of work (the hardest part is you need to create a fuel loop into the gas tank), you get a car that starts right up warm or cold, runs reliably, tunes and times itself (if you add the matched distributor), and has accurate gauges that actually look good in the car.
It isn’t a cheap date, given that the full solution costs around $3K, but it has a relatively low degree of difficulty for the install (if you have it done, the labor generally will come to less than half a day), and you go from hoping the engine will fire to knowing it will fire.
It really makes an amazing difference. If you haven’t driven an old car in a while, there is setting the choke, then pumping the gas to prime the carburetor and praying you don’t flood the engine, and then cranking the engine until it fires. With this, you turn the key and the car starts. Enormous difference.
Because the Holley Sniper EFI helped turn my old unreliable car into an old reliable car and made a bunch of gauges that sort of worked actually work, it is my product of the week. It is interesting to note that Jaguar is developing a program to turn these aging works of art into modern electric cars called “XKE Zero.” That likely will be my next project.
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