To Re-Boot BlackBerry Boots CEO but Death Spiral Looms


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After months of looking for a buyer, BlackBerry has given up plans to sell the company and has indicated their intent to raise one billion dollars in an attempt to re-boot the brand.

To do that, however, they’re booting Thorsten Heins, their current CEO, who’s said to be leaving by month’s end. Succeeding him will be John Chen, former CEO of Sybase, quoted as saying, “BlackBerry is an iconic brand with enormous potential, but it’s going to take time, discipline and tough decisions to reclaim our success.”

That depends on how you define “iconic brand.” BlackBerry once a market leader, has lost most of its share to Apple’s iPhones, Samsung, and phones running Google’s Android software. In the smartphone category, those are the ones that have become iconic, i.e., brands that best meet consumers’ Ideal for such mobile devices, so it’s probably going to take a lot of time and tough decisions to make any gains at all.

Blackberry in Death Spiral

According to leading-indicator Brand Keys Loyalty and Engagement Indices, the death spiral of market share and sales puts a real damper on any potential for a fast or significant brand comeback. This October’s brand rankings look like this, with percentages indicating how well the brand is seen to meet expectations the brands’ own customers hold for their Ideal smartphones:

Apple 92%
Samsung 89%
LG 84%
Nokia 82%
Motorola/HTC 80%
Blackberry 54%

If you think the BlackBerry evaluation is low, you might be interested to know that it was 14% higher at the beginning of 3Q ’13 when it had a 4% share of market. As of the latest quarter, they account for less than 2% of new smartphone shipments, so pretty much an engagement death spiral too. And its been reported that the company market cap is only $4 billion, a 95% drop in five years. Somehow you’d expect more from an “iconic” brand.

It might be worth pointing out to Mr. Chen that being “iconic” as the term gets tossed around today – a synonym for “recognizable” – doesn’t quite work as well as it did in years past. Today you need to be recognized for standing for something that emotionally differentiates you from the pack. And, at the very least, are able to meet expectations consumers hold for the Ideal in your category. If you can’t, they just fly away to other brands. Anyone remember Pan Am?

Robert Passikoff
Robert Passikoff, Founder and President of Brand Keys, Inc., pioneered research in loyalty and engagement, creating the Brand Keys Customer Loyalty Engagement Index® ,the Sports Fan Loyalty Index® , and the Women's Wear Daily Fashion Brand Engagement Index® . His first best-selling book, Predicting Market Success provides marketers a 21st century perspective on predictive loyalty metrics. His newest book is The Certainty Principle: How to Guarantee Brand Profits in the Consumer Engagement Marketplace.


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