Blackberry crumble: what do developments mean for law firms

Earlier this week, Blackberry (until this year known as RIM) the company behind the once ubiquitous Blackberry device, issued a most unusual statement ?that clearly intimated that they were keen to find a buyer, or merger partner for the company. This is unusual in the sense that most tech companies only admit this sort of thing when the game is more or less completely up for them. Blackberry have decided that they need to accept intervention in their fortunes rather than ?run them out themselves.

If you look at RIM's market capitalisation, it has plummeted to a fraction of its previous high, where at one point it was briefly the most valuable company in Canada. It is a remarkable slide, and one that mirrors the fortunes of Apple back in the 90s. Apple ?of course made a spectacular turnaround, but it remains to be seen if Blackberry can do the same.

The current low value of the company is a reflection of problems that Blackberry have faced in recent years. If we look back to 2007, Blackberry were in a remarkably strong position. They had a huge foothold in the corporate market, due in part to the secure (encrypted) transport mechanism for emails, and partly due to the compression that they used to make messages as small as possible, minimising mobile data use, and significantly lowering cost of use.

They also had a range of devices, and offered server side software that allowed companies to apply policies to devices (and thus users) and remote wiping that brought lawyers and other professionals peace of mind if a device was lost or stolen. A further trump was the introduction of BBM, their messaging system that allowed users to transmit messages to other Blackberry users free of charge. This produced an unexpected surge in sales of devices to individuals, particularly the younger generation.

Keeping up

The problems for the company started in 2008 with the release of their first touchscreen device, the Storm, to allow them to compete with Apple and other touchscreen phone manufacturers. Having used one of these, my recollection was that it was a terrible device, and the sales reflected that. It would be a further two years before they could bring a decent touchscreen to market, all the while watching Apple and Samsung grow their market share significantly. This was compounded by the release of their tablet device, the playbook, which when it hit the market was expensive, complex to use, and limited in the number of applications that were available for it. Sales were poor until the company wrote down half a billion dollars to underwrite huge discounts for them. Since then they have sold steadily, but still only have a very minor share of tablet sales.

Blackberry's most memorable problem came in 2011, when issues with their software meant that 70 million users could not send or receive emails for a few days - a significant amount of time for most. This stemmed from the unique Blackberry way of transmitting emails, one whereby all traffic was handled by their servers, working in conjunction with a device called BES server that ran in users own networks, attached to their email system. This was the way Blackberry provided users with security and control, but was clearly a single point of failure, and a spectacular failure when it eventually went wrong.

Loss of faith

Another outage in 2012, not as widely reported but more than likely just as damaging really did not help. At the same time the delays in getting their latest device, the BB10 to market meant a loss of business to competitors, and a loss of faith from investors. Apple have a regimented timetable for releasing new devices, and Samsung seem to roll them out at will. It is simply not the kind of marketplace that can or will suffer delays in getting products to end users.

Another of the key differentiators that Blackberry employed and enjoyed, the security and control of their BES server, was attacked and quickly overtaken by mobile device management software vendors in the last couple of years. Companies providing this software could control and secure any device, not just Blackberry's, making for a more flexible mobile environment.

Ready-made platform

Blackberry, despite their struggles, still own a lot of useful technology. The attraction to buyers will vary, and commentators suggest various possibilities but for me there is one that stands out. Samsung are now a global giant in the world of mobile communications, but rely on Google for the operating system on their devices. Analysts, including myself, have speculated that they need to develop their own system as Google are likely to increase their own hardware options in the future. Buying Blackberry would give Samsung a ready-made platform, at what is now a bargain price.

Unless Blackberry can find a buyer or partner that is prepared to perpetuate the brand, there is a possibility that Blackberry devices will disappear as a choice for lawyers over the next few years. Many law firms are now using competing devices and mobile device management, so sentimentality aside, there is little to be concerned about. For those currently forced to use Blackberry devices, there may also be a small note of celebration at the thought of now getting an iPhone or similar.

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