Blackberry, Nokia, & Others: Same Boat, Different Directions

Editor’s Note: This is a guest post from longtime reader Bugbog.  With Blackberry announcing a ~40% reduction in workforce (4500 jobs!) and an exit from the consumer market, I think this is a timely piece.  We’re seeing an end to an era where companies thrived by having all their eggs in making mobile devices.  You really need a strong ecosystem and diverse company to survive.  I think many people overlook how vertically integrated Samsung really is and how they came to be dominant.  Now on to a brief look back at history.  –Suril

Nokia, RIM (Blackberry), Motorola, Palm/HP, and HTC. All pioneers and trailblazers in the mobility age. All made great profits from their ventures. However they all currently have one, or a number of things in common; They are all either in a downward spiral, losing money, or have been broken up and sold!

What the heck happened?

The greatest threat to companies when generational changes come upon them, is the desire to just “motor” on and do nothing. If, however, when that strategy becomes blindingly obvious as to lead to total failure, then they can either panic, soldier on with a strategy they lack the capacity to fulfil (due to constraints of time & money), or prevaricate till it is too late to do anything that will effect positive change! If anything, the companies mentioned above just about cover the spectrum of first generation mobility leaders.

Let’s take a look at the results of their varying business decisions that have led to their current/final positions:


One of The Creators of the Mobile Industry itself! Rode the popularity creation wave in the 80’s and 90’s, rode the flip-phone wave in the 00’s, but missed the birth of the smartphone (in the early – mid 00’s).

With diminishing dividend return’s to the shareholders Panic set in, and Motorola succumbed to “activist” shareholders, causing them to ‘split’ the company up in order to ‘maximize’ profits. Hence Motorola Mobility. This resulted in them having less capacity (i.e. financial backbone) to suffer projected losses. And although they were part of the initial Android bandwagon, going full-bore with, and achieved early high profits from it, they were also one of the first to foresee/project [achieve] future losses too, with an inability to compete effectively once Samsung started to shift its manufacturing weight into the picture.

End result: Sold to Google! (Google, in turn, has sold on other pieces, and is keeping the company, literally, at arm’s length, with virtually no apparent benefit to either party, other than Motorola benefiting from Google’s financial muscle!)



A tragedy on so many levels. Although one of the first companies to react to the generational shift (to give credit, where credit is due!), they were, unfortunately, also one of the first to succumb to it.

Although they did many things right; creating their own O.S., hardware & app store. [IMO] their strategy failed when, upon the initial failure of their offering to capture the iPhone halo effect, they didn’t attempt to ‘mix things up’, offer multiple size/type devices (4″+ devices were in vogue even then!). Instead they Soldiered on till they ran out of funds and absolutely had to sell the company.

End result: Sold to HP! Unfortunately for them, HP is a company with a history of [literally] destroying the value of any company they acquire. HP continued Palm’s initial strategy with no change whatsoever, and decided to jump-in the tablet market too. They bet big, lost a bundle, and that’s all she wrote, as far as the brand Palm was concerned! (The brand has been dissolved and WebOS has been sold off to another company).



This company, undeniably, had the longest run of its business model. Churning out iteration after middling iteration, for nigh on 10+ years! That the co-CEO’s did not believe their successful run was coming to an end is not surprising.  They Soldiered on for a couple more years. Even when, at a very late hour, they finally decided to instigate changes to their core O.S., they still refused to evaluate current tech history, and factor in the length of time and money it would take to achieve financial equilibrium.  (For example, in the year of Microsoft’s absence, Android took hold, and has ever since proved a formidable block to all other competition.

They prevaricated for quite a while, finally changing (i.e. ousting) their co-CEO’s, but the new CEO Soldiered on with the previous strategy, neglecting (or refusing) to evaluate any other alternatives. In short betting big on BB10, which was almost two years late. A time period in which they released little or no new products at all!

Once you bet all-or-nothing on one strategy, you really leave little room for alternatives. And when that strategy fails, it becomes a noose around the company as a whole, and affects and weighs down everything else they may wish to do.

End result: Blackberry has placed itself up, and open, for any method of sale, further damaging its current handset prospects. And the longer this drags on, the worse it’ll be for them.



Ahh HTC. One of the original Smartphone ODM’s (primarily for the old Windows Mobile, precursor to Windows Phone), where they saw some success. And when they finally launched as an own brand, they saw even greater [modest] success. They were the first port of call for Google, to help them build the first Android device. And when Windows Mobile curtained, (in preparation for Windows Phone), they were the first to go full-bore with Android, achieving phenomenal success, until, of course, the coming of the complete [and incomparable] vertical integrator: Samsung!

It’s tough to see where HTC has really gone wrong (apart from its lack of comparable scale, ability and financing).  One thing has become increasingly clear though, it simply cannot continue to Motor on, doubling down on its current strategy, which it has been following for the last 18+ months.

End result: HTC is a Downward spiral, projected to post negative results by the end of 2013. The “One”, on which it has banked so much, is not pulling them out of it.  Something needs to be done! (Maybe change their CEO?!)

Resulting likelihood? They’ll either need to make profits within the next year, or sell the company. (The alternative is to go bankrupt!)


And finally we come to..


Also one of the founding companies in mobile technology. They saw immense success in the market, throughout 90’s to the mid 00’s, even becoming and holding on to the top spot for quite some time.

Despite the advent of the smartphone era they Motored on for far too long with an ageing O.S! To be fair, they were developing their own O.S., unfortunately with their staid management setup, that was taking too long, would have cost too much, and [ultimately] would have led to the situation that Blackberry finds itself in today.

Fortunately for them, they hired an outsider (for the first time in their history), and the rest, as they say, is history!

The CEO made [bold??] decisions, (no prevaricating here!); went full bore with Windows Phone, stream-lined it’s staffing and manufacturing processes, ramped up Smartphone innovation and production, and…

End Result: Nokia did turn around and was becoming profitable once again. Unfortunately they ran out of time and money and sold their Hardware & Services division to Microsoft (with caveats). So, although they are no longer a handset manufacturer, they have retained the brand name and the option to restart as one some years down the line.


The one thing the above analysis shows is that everyone has a limited time in which to do something! Doing nothing is not an option. Continuing with a particular policy or strategy due to stubbornness or pride is not good business sense, especially if you don’t factor in whether or not you have the applicable funds to weather out any possible resulting losses!

And, if you’re going to be sold, it’s better to be wanted by someone, than be desired by no-one.

Given all the losers detailed above, I would certainly think that the path Microsoft/Nokia is taking certainly has the better hand to make a success of things, don’t you think?

  • Willem Evenhuis

    could it be that a culture change is in order? A bit if competition is healthy, but I can’t help the view that the big boys are taking competition a bit too literally. All these recent buyouts, so called ceo resignations is not good for the human health of a company climate.

    • kimck99

      Perhaps. However, my (arm chair) analysis is that most CEOs tend to have ego and with success, they tend to milk the cow far to long before implementing any new strategy. I can’t think of a company where a CEO of a large company risked short-term financial/market expectations for long term change.
      For example, Bill Gates’ singular vision was a computer on ever desktop. Pretty straight forward statement. Not sure what Ballmer’s is/was. However, they sat in the Enterprise space far to long and did not prioritize the consumer space – thus lagging in the mobile market.
      Don’t get me wrong, there have been many large companies where they change direction, however, rarely do I see that occurring with one CEO in charge. (I’m sure some of you will be able to provide examples. Perhaps Google as they branch from Search but as far as I’m aware, greater than 90% of their revenues comes from Ads from Search and now possibly YouTube).
      Sometimes, I think a CEO can be hampered by market/shareholder expectations and also are for a lack of better word, one trick ponies. They get/were success implementing or spearheading one strategy. But, once they succeed, that CEO doesn’t necessarily have another strategy they are willing to bet their future. It’s not until a different CEO comes in and implements their vision. (For example, Roger Mulally of Ford or Stephen Elop – granted the jury was still out on his strategy before the acquisition.)
      I guess it’s human nature that one you are successful, it’s hard to change what you are doing. It’s like when you are in your 20’s, you have grand ideas. Then you get married, have kids, mortgage, etc. and you have good paying job. Then at 40, it’s hard to “implement a new strategy” without risking what you have for the family. People do it but often times it because something was forced on them (like being laid off) before they risk doing something different and become successful.
      Just my two cents.

      • Bugbog

        In the past, it just used to be hostile takeovers, nowadays it’s “activist” shareholders that agitate for change and implementation of different strategies/directions by companies.

        Mostly I just think that the value the shareholder desires from his investment never actually aligns with the long-term requirements of the companies.

  • Nathan

    For someone with all the majors and minors Suril claims to have, how can he claim that 4500 employees is 50% of Blackberry’s workforce? Reports elsewhere list their workforce at 12,700 employees. I would like to see the math that shows this as 50%.

    • nohone

      According to the AP, it would reduce their costs by 50%. The AP also says that it will reduce the workforce by 40%. So he made a mistake. Would you mind showing us all these majors and minors you have that taught you how to be such a useless ass?

    • surilamin

      I calculated the number after accounting for this reduction they announced today (an error on my part). I’ve updated the article to reflect what the AP is reporting.

  • TWPandora

    I do
    not believe the part on Nokia is entirely accurate. Nokia did not run out
    of money, in fact the devices division was expected to be profitable by either
    fourth quarter of this year or early 2014. Their strategy is now
    beginning to pay off around the globe, it’s taking double-digit market
    share in over ten countries and second place, ahead of Apple in at least two
    countries. The biggest challenges right now are in the US and China, the
    largest markets but even without them, Nokia can still be profitable and hold
    out as their strategy in these countries mature. In my opinion Microsoft intended
    to buy Nokia all along assuming it was successful, and purchased it
    now to get it at a reasonable price before the stock price started to take its
    success into account.
    I do not disagree that Nokia waited too long to
    implement its new strategy and if Microsoft waited any longer to implement its
    new mobile strategy, its mobile division might have gone the way of HP’s.
    Microsoft knows that for it to stay viable overall, it has to be successful in
    the mobile space because that is the future growth of both hardware and
    software. Since MS is well diversified, extremely profitable and has
    the desire, it will eventually succeed in both the phone and the tablet
    space. In my opinion, their strategy and implementation of having
    one OS across desktops, laptops, all-in-ones, convertibles, tablets, phablets,
    phones and entertainment systems is well ahead of both Google and Apple and
    with Windows 9 hopefully will be fully executed. This is a major competitive
    advantage that will pay dividends moving forward and give MS a leap frog over
    its competitors. This feat is much more complicated then they get credit

    • Bugbog

      I’ve had this percolating in my brain for awhile, and wrote it barely 24hrs before the Blackberry news broke.

      Yes Nokia was doing very well indeed, (I did state as much), however Nokia DID run out of Time & Money, due to the unforeseen necessity of purchasing the remaining 50% of NSN!

      That adversely affected their Credit & Cash reserves, hence the crunch time of sell, or undertake some other method of beholden financing.

      As far as I’m concerned, Nokia got the best of all possible deals!

      -They got Billions in cash for the sale of D&S division

      -They got an additional Billion+ for licensing of their patents, as well as evidential confirmation (legal and commercial) of their patent’s monetary value, assisting in their efforts to monetize them.

      -They get the option to resurrect the brand name of their handset division in the near future, should they desire to re-invest in it.

      -They get to retain the rest of the business as a continuing commercial entity, with little to no disruption.

      -They get additional credit financing, regardless of the outcome of the sale

      Now, compare the direction and decisions that Nokia made with those of Blackberry (who seemingly chose the very opposite all along the way), and tell me who has come out ahead so far?

      • Tips_y

        Congrats on a perceptive article!

        • Bugbog

          Thanks! :)

  • hatch villaverde

    well written observation. SLOW CLAP!!!!!!! Im still rooting though for NOKIA!!!!

  • Bugbog

    Thanks Surur for posting this! :)

    You could say that my article, coming mere hours before Blackberry’s announcements, is slightly prescient. (Just kidding! :) )

    But one person that it does show as somewhat prescient is Stephen Elop!

    From the moment he took over the CEO position at Nokia, he’s been banging on about the current requirement for any smartphone vendor to be aligned with a rounded eco-system! Especially one with deep enough pockets to continue expanding, and fleshing out it’s offerings.

    Palm didn’t have this (trying as it did to latch on to that of Apple’s iTunes). Look what happened!
    Blackberry doesn’t have this (seeking inadequate compatibility as it does with that of Android’s app system). Well, we are watching what’s happening in real-time! :(

    Currently, as a Smartphone vendor, if you don’t have some form of vertical integration in your portfolio, then it will become increasingly difficult to compete!

    Next Target: HTC; Buyout or Bust?!

    (It’s like a version of the Euro-zone palaver played out in the tech world!)

    • Tips_y

      Nice piece of work – congrats!

  • Tips_y

    Great article!

    HTC has a back-up position – they can always down-size and go back to being an ODM. From that position, they can re-think their strategy and rebuild from there.

    On BB, Thorsten Heins should tender his irrevocable resignation and perhaps honorably forego the $55M golden parachute, for not having a Plan B!

    • Bugbog

      Unfortunately I don’t believe this is an option for HTC.

      If one recalls, at the time when HTC ‘rose’ as an ODM, orders for the far-east were still being routed through some of the “off-shore” Chinese territories.

      Nowadays orders are placed with the factories directly, something HTC itself utilizes.

      Apart from not even having the capacity (one of the main reasons why it can’t compete with Samsung), I doubt it can compete on cost either!

    • donzebe

      HTC could have focus more on windows phone.

  • SategB

    ” Continuing with a particular policy or strategy due to stubbornness or pride is not good business sense” – A very strong point made for why the last 7 years of Ballmer extend and defend stratigy for windows and office has now put MSFT behind the curve of where the market is going.

    The weakness in the write up is why these companies found themselves in such dire straits. The all suffered innovative disruption as predicted by Clay Christerson of HBS. Furthermore to say we should be happy that MSFT has not fail as bad as other should make us happy ignore the fact other has succeeded during this time that could had been either MSFT or Nokia if they was more innovative and less poorly managed. The aurthor completely exonerate both from these sin by simply stating things could have been worse.

    • Bugbog

      I actually did state the reason why all the companies found themselves in their current positions; namely that they were victims of a generational/disruptive shift!

      Nor did I exonerate Nokia for it’s failing, what I congratulated them on was their [late stage] decisiveness that set the company/division up in a prime position to be suitable for acquisition as a desired entity.

      You’ll note, of all the companies listed above, only Nokia was really decisive, innovated, and had worth, both as an acquisition (in part), as a brand entity able to stay independent (in part), and also in position to successfully monetize its patent assets.

      Motorola: split off from its parent, sold high, but with low innovation, negligible worthwhile patent assets (only SEP’s), still being dismantled internally, and almost irrelevant as a sales entity!?

      HTC: Going down.
      Palm: Gone
      Blackberry: ?? Still to be seen, but not looking good at all.

      Nokia? Innovative, rising brand, acquired whole. In position to continue rising (even if they are now part of another company!)

      • SategB

        It is inconceivable to me how one can compliment a company that went from $36 billion market cap to selling off a primary part of the company for 20% of that in 2 years as something good.

        To make that into anything beyond the huge failure it was show a lacking of business understanding verging on naive at best.

        • Bugbog

          Market Cap’s rise and fall. Intrinsic value depends on profitability. Nokia’s profitability, based on selling 80-95% dumbphones, went down.

          Yes, they re-tooled, which was showing positive signs of becoming profitable, however, with the cost of the NSN full acquisition, they ran out of time and money.

          I would estimate that the remainder of the Brand, which they are still in control of, is still worth in excess of $21Billion.

          All-in-all, I’ll say that isn’t too bad.

  • Yuan Taizong

    As BlackBerry is laying off people, it would be easier for Microsoft to integrate B.B.’s top talents into the company if they’d ever buy them, BlackBerry’s security features is something I’d rather not see attached to an iPhone or even worse, Android if Google would buy them, because then Microsoft would have little to lean on.

  • DKJr

    Good and balanced article. Totally agree with all the writer has highlighted.

  • Nokian

    Good Article except for one small point……it is utter bullshit

    You seem to have left out the bit where Elop destroyed Nokia.

    Can we please have less of these pointless amateurish articles please ?

    • donzebe

      The truth is, if Elop did not come in Nokia would have been gone. He was the only one willing to go where no one was thinking. The only partner at the time that could have keep Nokia relevant was Microsoft.

      Thank Elop for saving thousand of jobs.

    • Bugbog

      Although you are well entitled to your opinion on how much ‘good’ Stephen Elop was for Nokia. The main point I was trying to put forward was, in relation to all the other OEM’s listed above, Nokia’s ultimately has not fared too badly!

      As we are seeing, it could have definitely fared much worse!

  • donzebe

    Well written and balance article

  • Rikikrik

    This article lacks one very important fact. The fact that Nokia’s phone business has another leash on life, with a financially strong acquirer, Microsoft. Palm and Blackberry are already dead or almost dead. Nokia Windows smartphone market share is still growing strong, surpassing the Iphone in many countries. Nokia global phone market share is second to none, except Samsung. Asha phones market share is stabilizing. Under Microsoft we can expect the phone business to grow, just like Skypes and Yammers’s growth after being acquired by Microsoft. Skype grew from 800 million accounts to 1.2 billion after the first year under Microsoft. Yammer grew by more than 30% under Microsoft. The acquisition of Nokia’s phone business means that Microsoft can develop and produce phones cheaper and thus more profitable. It also gives Microsoft the needed muscles to compete against Android in the cheapest segment. Furthermore it gives them the needed scale to compete effectively by integrating their services and apps in the Asha and feature phones models. I think it will be positive for their advertising and search business. I expect the newly acquired Nokia phone division to grow under Microsoft, just like Skype and Yammer. So I disagree totally that Nokia can be compared to Blackberry and Palm of whom both are essentially dead.

    • Bugbog

      I did state as much. Concluding that Nokia was growing (rising like a Phoenix from the ashes, so to say).

      However the main thrust of the article was to focus on the current state of the Original Mobility Manufacturers from when they were independent entity’s. Which, ultimately, Nokia H&S was no longer able to continue as! (A situation some have already achieved, and which all others will [probably] sooner or later become!)

      So, I agree that Nokia is growing. I also concur with the benefits that Nokia will achieve under Microsoft’s wing. Which itself, was another contrasting conclusion that I came to, when compared to the other companies in the article.

      Of all the companies listed, Seemingly Nokia H&S division, under Microsoft, has the best chance of continuing success; a continuation of the strategy implemented by Nokia before they sold it.

  • tomakali

    Exception here is Nokia did not fail, they turned profitable…
    with a lot of interesting products lineup… it is certain they can breach 25% marketshare before Q4 2014.
    Nokia was saved from disaster, unlike other acquisition the Brand Nokia still lives atleast for the next 10years with the strength of Microsoft.
    Other brands, BB, HTC etc has to save their brand on their own…
    IMO, HTC has to take up the privileges of what Nokia had from Microsoft to sustain next 5 years. HTC exclusive to WP will keep them to innovate ONE series to next level…

    ANDROID Cannot save HTC
    GOOGLE willnot save HTC
    Microsoft Can save HTC

    • Bugbog

      This article is less about the “fail”, but more about the direction the original owners were taking before the ‘generational shift’, what decisions they took immediately after, and where they have ended up now.