BlackBerry and Microsoft: The Fight to Reclaim Past Glory

Both BlackBerry and Microsoft have been in far stronger positions with regard to personal technology. At one time, Microsoft was contending for leadership in smartphones against Palm and BlackBerry, and BlackBerry took leadership only to lose it to Apple and then Samsung. Microsoft put tablets on the map in the early part of last decade, but it missed a memo and Apple refined them to success -- pointing out that beauty, price and battery life rule in something you hold.
In the end, I think both companies are on a path to turn around their fortunes and they are making progress. Because BlackBerry is fighting for its life, it is making more of the necessary moves more aggressively.

We live in a fickle world, though. Leaders during one period may be gone the next, as Palm, Compaq and Netscape have demonstrated. Still, death can be defeated -- as IBM, Apple and the U.S. auto industry have demonstrated. There is a path back. Microsoft is still a major power, and BlackBerry isn't yet in as much trouble as Apple was when Steve Jobs reclaimed the helm.

Fascination

I'm kind of fascinated by some of the Apple fans who post. During much of the last decade, many of those who were most visible made fun of people who had called Apple dead prior to its recovery. Now, many of those same people are convinced Microsoft and BlackBerry are dead, showcasing that they didn't really learn from the mistakes of the folks they ridiculed.

One thing you learn in this business, particularly after watching IBM and the entire U.S. auto industry come back from the brink, is that it really isn't over until it is over. A significant change in leadership can turn a loser into a winner, and there is no better example than Apple -- which went from death watch to the most highly valued company in the world in one short decade.

It does take time, and in a world with TV programs that solve major conflicts in 30 minutes to two hours, I can understand why folks point at a failure and scream "death!" However, we don't live in a TV drama or situation comedy.

BlackBerry's condition

Of the two firms, BlackBerry is in the most trouble at the moment. The cause is that for an extended time, it thought it was unbeatable. Once it became clear it was vulnerable, it tried to chase Apple instead of doubling down on its own strengths. That attempt ended badly.

Samsung did demonstrate that with massive spending, you could catch Apple from behind and bypass it -- but even with its massive resources (Samsung spent three times as much as Apple), it still needed Google to get the job done, and BlackBerry simply didn't have those kinds of resources. Nor did it have Google's help to get apps.

When you are outmatched, you have to focus on your strengths and tightly target your unique users. Business segments like government, pharmaceuticals, legal, banking (particularly trading), and healthcare have compliance and work requirements that favor BlackBerry's unique strengths and direct sales model.

BlackBerry is focusing on this segment and its strengths -- and like Dell and BMC, it is going private so it isn't distracted by having to meet financial analyst quarterly pressures as it attempts to turn reverse its fortunes. This is what IBM did and it worked. IBM stepped away from all of its consumer efforts and focused on its core business. The result: IBM is once again one of the most powerful technology companies in the world. The strategy works, but it will take a number of years to make this happen. IBM started in the early 90s and wasn't really out of the woods until the end of the decade.

Part of undertaking a turnaround is getting on the right path -- and now, finally, BlackBerry may be on the right path. Granted, it still has to execute.

Microsoft Situation

Surface 2 is a vastly better set of products than the Surface Microsoft debuted last year. However, the issue isn't just building something better. If you improve your product by 100 percent and the leader improves theirs by 200 percent, your efforts are considerable -- but you'll still lose. The issues for the first-generation Surface were threefold: The products weren't as attractive as the iPad, the most competitive product using the ARM processor; they didn't use Outlook ,and folks who might have used it saw it as crippled as a result; and the Surface Pro was not only too expensive and too heavy -- it had lousy battery life.

Oh, and instead of marketing like it is now, showcasing the product's advantages over the iPad, Microsoft focused on the keyboard's unique way of attaching to the device. The campaign drove interest, but it didn't drive sales.

Now I'd still like to see Microsoft focus more on the appearance, but it has improved the ARM-based product so that it isn't crippled, and on specs, it is better than the iPad for the money. The exception is app support, which is improved but still lags Apple. The Intel-based product I still struggle with a bit, because it is an Ultrabook with a small screen, and the target of this product is more MacBook Air than iPad.

Given that I'd suggest a different industrial design with a larger screen, Ultrabooks with 11-inch screens typically don't sell that well. However, having said that, if there were a product that would get folks to consider a full-fledged laptop in a tablet form factor, this would be it. It is small, light, and with the new battery keyboard, it has segment-leading battery life.

If folks see this as a more portable and flexible MacBook Air or a more capable iPad, the Surface 2 might pull off a surprise win. I think the odds are against this, but we've seen folks win before when the odds were against them. The iPhone is the perfect example of this.

I'd put my money on the ARM version of Surface as being the better seller.

Conclution:It Isn't Over

The old saying is that "it isn't over until the Fat Lady sings," and that lady hasn't sung for either company. Microsoft will be getting different leadership shortly, and while I think its strategy is weaker than BlackBerry's, it has vastly more funding -- and resources can often make a huge difference.

In the end, I think both companies are on a path to turn around their fortunes and they are making progress. Because BlackBerry is fighting for its life, I think it is making more of the necessary moves more aggressively. I doubt Jobs would have been successful had Apple not been on death watch; in fact, it wouldn't have brought him back if that hadn't been the case, given that he was fired for cause.

BlackBerry clearly has that fear, and Microsoft's resources may be preventing it from making the dramatic moves needed to truly turn around its tablet and smartphone trends. We'll see.