Signs of Life at Blackberry

The BlackBerry Ltd. Classic smartphone is displayed during an event in New York, U.S., on Wednesday, Dec. 17, 2014. BlackBerr
The BlackBerry Ltd. Classic smartphone is displayed during an event in New York, U.S., on Wednesday, Dec. 17, 2014. BlackBerry Ltd. is going back to its roots with a keyboard-equipped phone that looks like the original 'crackberrys' that made the Canadian smartphone maker a household name. Photographer: Michael Nagle/Bloomberg via Getty Images

Just when many had considered Blackberry dead, it is showing signs of life. The company took a wrong turn when it lost its focus and tried to chase the consumer market that rapidly became the domain of the iPhone and Android platforms. In the early days, it had some unique advantages -- a QWERTY keyboard with real keys instead of a touchscreen, better security, faster speed, and longer battery life -- the kinds of benefits enterprises and governments want. It appears that with the introduction of the Blackberry Classic, the company is going back to the future.

Where things started to go wrong

The seeds of Blackberry's demise started from the beginning when the company (originally called RIM or Research In Motion) was product-driven rather than market driven. For the co-CEOs (another problem from a management structure point of view), the world existed inside the four walls of their company and in the heads of their "brilliant" product designers and developers. They were oblivious to what their constituents wanted. At the beginning, they were brilliant, and their Blackberry phone was so popular and addictive to members of its target audience that it was often called the "Crackberry."

Formidable competitors entered the market

Apple entered the smartphone market with a virtual keyboard product it dubbed the iPhone. Not long after, Google copied the look and feel of the iPhone with its Android platform, which various manufacturers adopted rather than reinvent the wheel. The iPhone and Android quickly ate into the Blackberry's market share.

Disparaging the competition

RIM did what many companies do when they lose business to formidable competition. They started to "badmouth" their competitors by calling them amateurs at the same time they copied the virtual keyboard and touch screen design of their products. In fact, when RIM introduced its Playbook tablet computer to compete with the iPad, it used the headline "Amateur Hour is Over." The problem is that RIM shot itself in the foot with numerous journalists calling RIM an amateur. More importantly, the companies they were disparaging in their advertising -- Apple and Google -- became the most valuable tech brands in the world.

Years of floundering and mounting losses

The combination of disparaging competitors while emulating their designs and chasing after their consumer audiences backfired and started a downhill slide that saw the firing of the business founders and co-CEOs as well as considerable corporate instability and mounting loses.

Loss of brand identity

To make matters worse, RIM changed its corporate brand to Blackberry -- the name of its formerly popular smartphone product line. This was a huge mistake that showed its underlying weaknesses in marketing. The name RIM was firmly established, and gave the company a flexible platform on which it could build other product lines. By changing the name to Blackberry, any negatives associated with the Blackberry product line or operating system would likely spillover to all other products and harm them too. That is what happened.

The advantage of company and product brand separation

Marketing-savvy companies use their company brand judiciously. It is the reason why the Coca-Cola Company called its original diet cola product -- TAB, with no reference to Coca Cola in the name. TAB was a risky product because it used saccharin (the only artificial sweetener at the time), which left a funny after-taste in numerous taste tests. For similar reasons, Toyota called its luxury brand Lexus. In their market testing, they discovered that baby boomers (the key target audience at the time) remembered early Toyotas as small and ugly -- images that were incompatible with a luxury brand. It is also why Clorox does not put its name on its Hidden Valley brand of salad dressing.

What is encouraging about Blackberry now

Blackberry's new CEO, John Chen, is making moves that show he has a marketing brain. He has done research and discovered that the company's key target audience is the enterprise market -- comprised of business and government users and those that want keys on their smartphones. To satisfy the needs of this market, he has introduced the Blackberry Classic, which offers a QWERTY keyboard with real keys, better security, faster email, greater speed and longer battery life. What a novel concept. Be market driven, identify the audience that prefers your products over competitors, find out why, and give that audience what they want. When everyone else is "zigging," or chasing after the consumer market, Mr. Chen has correctly surmised that it is perhaps a good idea to "zag" and target the enterprise market of businesses and governments. Also, what is great about Mr. Chen. He has given the financial markets a realistic view of where the company stands today. His predecessors seemed to brag and boast that they were going to take down competitors.

The outcome is already good

What is the result so far? Since he has taken over, Blackberry's stock has risen 28 percent. Assuming there are no major hiccups and based on what I have seen so far, I think that Blackberry is moving in the right direction for the first time in many years. Finding out what the target audience wants (that it is not getting from competitors) and giving it to them is the right, market-driven approach. I wish Mr. Chen and Blackberry the best of luck.

CORRECTION: An earlier version of this post incorrectly spelled the name of Blackberry CEO John Chen.