BlackBerry vs. Apple: Turnaround by the Numbers

    As we watch BlackBerry struggle with its turnaround, perhaps it would be good to look back at Apple’s turnaround and gain some perspective. These things are hard, and particularly difficult when a firm has to focus on quarterly numbers. The first three years of a turnaround are the most difficult because the CEO has to hold on to the investors and customers even though all financial trends will continue to be negative for a period of time.

    Steve Jobs had three major steps: Consolidate and simplify, stabilize, and then haul product out of the pit. BlackBerry is actually in far better shape than Apple was when Jobs took over, but it lacks Jobs’ charisma and the Apple fan base is unmatched in the industry, both of which offset the initial problems. Currently, BlackBerry is exploring going private. That could provide an edge, but it’ll still need something to pull it out of the pit. Let me explain.

    Apple: Turnaround in Brief

    Steve Jobs took over a mess. The company had grown overly broad and complex since he’d left, and he had been very public about how crappy the products were before he took over. He needed to eliminate the complexity and then stabilize the customers and investors. He did the first through massive cuts — gone were printers, PDAs, cameras and the enterprise computing unit. He turned Apple back into a company that was much more similar to the one that had existed nearly a decade earlier. This was to both simplify the problem and create something he knew he could run.

    He got Bill Gates to invest millions, which created the impression that Apple was a good investment and stabilizing the investors (the richest man in the world has considerable cache with other rich investors). He marketed the hell out of the products, eventually fixing them and putting them on a current generation OS. Though the company continued to bleed during all of this, he was able to stabilize it and take it off death watch — both of which were important for what was to come.

    This allowed Apple the leeway to look for a halo product. Most would have figured it would be a PC. Instead, it was the iPad, which wasn’t that successful initially but showed promise. Three years later, it owned the music business. The iPad launched Apple back into prominence. Few seemed to realize that Apple was actually a different company and that PCs were legacy offerings. Apple eventually even took computer out of its name.

    Apple’s Unique Advantages

    Apple had three unique advantages going into the turnaround. It had a customer base that was compared to religious organizations and solidly behind whatever the company did. It got its biggest competitor to lay off and not only invest in the company but continue to place its own most powerful killer app, Office, on it. Finally, Jobs himself had learned how to manipulate the masses much like a religious leader and that skill set can move mountains. That was what gave him the ability to get people to buy products he didn’t believe in until he could create products he did.

    BlackBerry’s Unique Advantage

    Clearly, BlackBerry has none of these advantages. In fact, everyone and their brother is trying to go after BlackBerry’s customers at the moment, so it clearly didn’t get a time out like Apple did. However, it does have unique advantages of its own. It has the most secure platform at a time when people are very concerned about security. It has a largely business audience that doesn’t change process or platforms easily. And it starts out being simpler and more focused than Steve Jobs was with Apple. In effect, the first phase of the turnaround was largely done before it started.

    Shared Advantages

    Both companies flipped existing operating systems onto new devices successfully, Apple with NeXT and BlackBerry with QNX. Both OSes came with experienced teams. Finally, both companies were and are well differentiated from their competitors.

    Wrapping Up: What BlackBerry Needs

    BlackBerry needs two things. It needs a reduction in pressure so it can execute, much like Apple got by getting Microsoft to support rather than fight it. If BlackBerry can go private, this would remove pressure. Or if it were purchased by a company in Samsung’s class, this would give it the ability to compete on a more level playing field. Thus the announcement today that it is looking at options.

    BlackBerry also needs an iPod-like offering. I don’t mean MP3 music. I mean a break-out product that either gets consumers or business excited about the company’s future prospects. This is so the market sees it as something different and successful, which is what the iPod initially did for Apple. It got investors and customers to see Apple differently. BlackBerry has to step away from its past for the market to see it has a bright future.

    This week, BlackBerry moved on the first part of this plan. Let’s see if it can move on the second.

    Rob Enderle
    Rob Enderle
    As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.

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