In May 2012 I wrote:
The pattern may be that companies either have short post-trauma lives of about two to three years or relatively long post-trauma lives lasting 4 to 5 years. What determines this life expectancy and how long do RIM, Nokia and LG have?
via Post-traumatic life expectancy of phone vendors | asymco.
These comments came right after BlackBerry (then RIM) announced a loss and thus entered what I called the “post-traumatic” phase of its existence. The observation I have been making is that once a company begins to generate negative operating margins from phone sales, that phone business never recovers.
The question then becomes one of gauging how long they have before the business is sold, dissolved or merged. Since that update, both Nokia and RIM have tentatively agreed to be sold. If the sales go through then we can update the graphs as follows:
[Graph note: solid bars in the second graph indicate companies which exited and thus the duration of life post-trauma.
The Theme Foundry has been building premium WordPress themes since 2008. They recently released Collections — a unique and beautiful WordPress theme for sharing, designed by Veerle Pieters. Visit the live demo of Collections to see it in action, or purchase it now for $79.
What makes The Theme Foundry special?
- A focus on quality over quantity. You won’t find a huge assortment on their site — they keep a small, curated collection of premium WordPress themes.
- Exclusive partner with WordPress.com (the official hosted WordPress provider). Each and every theme goes through a stringent audit process from some of the best WordPress coders in the world.
- Whole team support. You get fast and friendly support from the team that actually built your theme, not a part time support rep.
Sponsorship by The Syndicate
Publicly, Mr. Lazaridis and Mr. Balsillie belittled the iPhone and its shortcomings, including its short battery life, weaker security and initial lack of e-mail. […]
Internally, he had a very different message. “If that thing catches on, we’re competing with a Mac, not a Nokia,” he recalled telling his staff.
From How BlackBerry blew it: The inside story – The Globe and Mail
The whole article is worth reading, detailing as it does the decision process inside BlackBerry during the painful disruption of its core business.
What struck me most however was how similar their decisions were to those of Nokia at about the same time. Consider:
- The engineering priorities placed on optimization around constrained hardware. Although engineers knew how to build the right products, the business priorities caused them to be deployed in the wrong direction.
- The delays these misdirected efforts caused. Mobile phones have narrow windows of opportunity but long lead times. A strategic mistake is very costly and most probably impossible to remedy. In the case of BlackBerry, buying QNX came too late while for Nokia the deprecation of Symbian was catastrophically managed.
- The feedback loop from network operators which shut down any initiatives for improved user experiences. Your best customers provide all the wrong information when the market is being disrupted. Ignoring them is impossible while complying is a strategic mistake.
- The demand from network operators to develop “killers” to competing platform-based products and the subsequent “jumping at the opportunity”.
- Listening to large buyers at the expense of users. While BlackBerry was guided to omit consumer features from its enterprise buyers, Nokia never secured enterprise buyers of any significance. Nevertheless it created the “E series” business-friendly phones which suppressed features like cameras and music.
- The celebrity sponsorships and wasted promotional efforts in the face of structural failures. This is manifested today by HTC as well.
The parallelism of this synchronized failure can be seen in the following graph showing smartphone volumes.