Anatomy of failure: Mobile flops from RIM, Microsoft, and Nokia
Research in Motion’s BlackBerry PlayBook is so bad that Verizon Wireless may not bother carrying it—a spokesperson said so the day after the PlayBook debuted to customers. AT&T won’t let BlackBerry users download the essential app (BlackBerry Bridge) that brings email and communications apps to the PlayBook. Carriers are arms dealers, selling weapons to anyone for a price, but even they are drawing the line at the PlayBook.
That’s a huge fall given that the PlayBook’s creator, RIM, is the successful patriarch of the mobile market—inventing the smartphone category, in fact. And RIM is not alone.
Like RIM, after lots and lots of promises leveraging its Windows savvy and market strength, Microsoft produced its own disastrous mobile platform, Windows Phone 7. It’s not as bad as the PlayBook, and if you really want one, a carrier will sell you a unit. Dell too jumped on the Android bandwagon and produced a series of awful tablets, after a failed foray into making its own smartphone. (Remember the Axim?)
The list goes on. Nokia had to kill its signature Symbian OS after a new CEO forced it to admit that the OS was at end of life after several years of self-denial, and the company’s efforts to create a successor had all failed. It then jumped from the frying pan into the fire by adopting Windows Phone 7 and delayed new products until 2012. Then there is the parade of successful, largely Asian PC and display makers (original equipment makers, or OEMs)—such as Acer, Lenovo, and ViewSonic—who promise and even sometimes ship sloppy, ill-conceived devices in hopes of getting into a growing market. How enticing!
Why are such established technology powerhouses failing so spectacularly in mobile? How can they not see the self-destruction in their approaches? For RIM and Nokia, the failings threaten their medium-term existence. For Microsoft and Dell, the failings prevent them from growing where the market is moving.
There are several reasons, and one of them is not Apple. Sure, Apple worked its design magic on first the smartphone and then the tablet, bringing to market the same zeal, elegance, consistency, and ecosystem advantages that have made the Mac the only PC with a growing market share. But Apple had done that with the original Mac, yet was still beaten by others. The fact that Apple’s mobile products are truly the best doesn’t explain why the competitors’ products are generally so bad.
The answers have to do with an essential flaw found in most companies: They can’t easily change gears because doing so means dropping the focus on what has worked and brings in the money now for an unproven, untested, risky shift. Clayton Christensen captured and described this phenomenon wonderfully in “The Innovator’s Dilemma,” an often-cited business book most businesspeople don’t seem to actually follow.
When Apple introduced the iPhone in 2007, it seemed to be a left-field change for the Mac maker, a bet that it could enter and succeed in an alien market. That wager paid off, with Apple now the highest-valued public technology company in the world. But in 1999 or whenever CEO Steve Jobs decided to shift from being a PC maker into a consumer device maker (2001’s iPod was the result, which led Apple to the iPhone and now the iPad), that proposition had very long odds. At the time, Apple was in critical condition, so the company had the freedom to take its chances.
RIM, Nokia, Microsoft, and Dell haven’t been desperate enough to truly think different. When the iPhone came out, they all pooh-poohed it as a toy that would at best appeal to Mac loyalists. (Never mind the example of the iPod.) Today, iPads already outsell Macs 4 to 3 and iPhones outsell Macs 5 to 1—that shows why mobile is so important to computer vendors. In addition, iPads are credited with torpedoing the netbook market and shrinking the PC market.
Why RIM, Nokia, and Microsoft blew themselves up
RIM particularly played up its cozy relationship with security- and control-minded CIOs who would never let such toys into the enterprise. Nokia and Microsoft had the same paternalistic, insular point of view. (Dell’s story is more like that of the OEMs—I’ll get to that shortly.)
They were talking to the wrong people. CIOs and IT managers are generally conservative, risk-averse, and traditionalist—especially at large companies and even moreso at regulated ones. In their worldview, change is bad, and so is user freedom. These Neanderthal IT leaders are a lagging indicator of what’s really going on. They dismissed the PC, the Internet, and e-commerce, too. But betting on them—and the large checks they kept writing—let RIM, Nokia, and Microsoft blindly traipse into irrelevance.
Meanwhile, individuals—whether or not in businesses—were acting on years of HR advice: They were being self-empowered. Now, they had more and more tools to apply that power. The PC was first, then the Internet, then software as a service (Salesforce.com has created a huge business by explictly seeking out these people and avoiding CIOs). In 2007, Apple added mobile to their arsenal, and they picked it up with a vengeance.
Fast-forward three years to 2010, and even CIOs stopped resisting and began embracing iPhones. If RIM, Nokia, and Microsoft had any doubt their world was fast changing and they were soon to be polar bears on shrinking ice floes in a climate-changed world, those questions had to have evaporated last year. However, they had spent so much time resisting the change that they didn’t know how to embrace it, and they had almost no time left to figure it out.
Nokia simply flailed. Microsoft jettisoned its existing platform (Windows Mobile) and started over again. That could have worked, except the team decided to pretend the previous four years had never happened, so its new mobile operating system covered a fraction of the iPhone’s iOS and Google’s Android capabilities. It wasn’t even a me-too product; it was a “what’s an iPhone?” product. RIM followed a similar trajectory, but it had even less of a clue about what an iPad competitor should be—in fact, it didn’t want to even accept the notion that its tablet would compete with the iPad. All this happened in the year that the iPad became the most quickly adopted enterprise technology ever.
Microsoft and RIM compounded their poor results of their insular, disconnected thinking by deciding to throw away their previous core mobile markets—businesses—and aim for 20-something hipster kids. Clearly, both companies’ management teams were going through midlife crises and imposed their cracked view of a hipster on their product planning.
Microsoft came out with the “social” Kin, aimed explicitly at kids, who reacted the way all kids do when a 40-something parent tries to act cool: They quietly laughed and went elsewhere. Microsoft then did the same with Windows Phone 7, but with a little less explicit hipster pretension. The result was an elegant UI, but the rest of the product was unusable by its business and adult customers: no security or management capabilities, awkward Office implementations (virtually unchanged from the iffy Windows Mobile 6 version), no copy and paste, no support for HTML5, no multitasking. There was nothing, in other words, that the iPhone platform (followed by Android) hadn’t made table stakes two years earlier.
RIM was even worse than Microsoft in this regard. The PlayBook has no manageability and almost no security capabilities, yet it relies on the user having the most conservative smartphone there is: a BlackBerry. The pairing makes no sense, and it’s inconceivable why RIM would throw away its history and come out with a device that is less secure than any competing product.
Plus, despite the word “play” in its name, it had nothing truly playful or cool. No apps stand out (despite having hired away much of DataViz’s mobile apps team), and a 35-year-old title (Tetris) is its hallmark game. If RIM was comfortable trashing its security history, it didn’t seem to know what to bring to the mix instead.