Black Future for Blackberry? A Tech History Lesson for RIM

By

Published November 12, 2011

| FoxNews.com

Here today, dot-gone tomorrow?

Once high-flying RIM, the maker of the very popular Blackberry line of smartphones, is today fighting for its very survival, battling to keep its core business in the face of a string of service outages and far-cooler technology from its competitors.

The company's problems seem to be growing: A Bloomberg report last week highlighted the company's struggling stock price, calling RIM "a wounded puppy." This week, Google announced it would end support for its Gmail app on Blackberry handhelds.

In the light of these market challenges, we look at six other one-time tech juggernauts that went from heavyweight to scrap heap. Is there a lesson to be learned in history?

Wang

History: At its peak in the 80s, computer giant Wang was a billion dollar company with tens of thousands of employees. Wang moved from calculators and word processors into the computer market, making a very popular word processing program and leading in the early mainframe-class computer world.

What happened: The personal computer market consolidated around "IBM-compatible" systems: cheap Windows-powered computers, while Wang PCs ran a proprietary operating system too focused on mere word processing. Meanwhile the mainframe market consolidated around far more powerful "big iron" servers by competitors like IBM. The mid-range market Wang occupied simply dried up.

Lesson: Know your market. And if that market is shifting, business needs to shift accordingly.

Lotus

History: Lotus turned the early personal computing world on its ear with its Lotus 1-2-3 spreadsheet app, which helped prove why a personal computer was worth having on every desk. The company owned the market for years, and Lotus SmartSuite, the company's Microsoft Office-like collaboration suite, helped cement Lotus' tremendous success in the software market.

What happened: In a word, Microsoft. The popularity of the Windows platform and the software Microsoft built to run on it contributed to Lotus' slumping sales. The company struggled to keep pace, buying and branding other software programs to compete, but a version of its software built for Windows 95 was too little, too late.

Lesson: Beware of the smaller, more agile company. But also beware the big guy who'll steal your money and eat your lunch.

Palm/Handspring

History: Everyone remembers the Palm Pilot, a spin off from 3Com that basically created the market for personal digital assistants (PDAs). Palm inventor Jeff Hawkins left to create Handspring, which turned the PDA into a portable computer and blew open the market. Along the way the two companies helped to create the vibrant smartphone market.

What happened: Handspring was reabsorbed back into Palm, which struggled to update its operating system for years without success. By the time Palm brought out WebOS, the modern version of its smartphone platform, it was too late.

Lesson: DO mess with success. Without continued innovation, companies flounder.

AOL:

History: The name America Online is for many synonymous with Internet access. Those ubiquitous floppy disks and CDs -- distributed in seemingly every magazine and mailed out across the nation -- introduced us to the World Wide Web, not to mention email. For many people, AOL's website WAS the Internet.  

What happened: Despite as many as 30 million users at one point, cheaper dial-up accounts from other companies ate into AOL's profits. And as Netscape and Internet Explorer browsers offered access to the entire Internet, the company's web portal suffered.

Lesson: Looks can be deceiving. Despite shrinking in size over the years, AOL still operates one of the world's most popular websites and has millions of customers. The company earned $191.9 million from subscribers in the third quarter of 2011 -- 36 percent of total revenues.

Kodak/Polaroid

History: Polaroid's invention of the instant film camera in the 50s transformed photography, making it a fun pastime consumers could all cheaply and immediately enjoy. Kodak has a much longer history: Founder George Eastman invented roll film in the late 1800s, and his company dominated the camera market for decades.

What happened: No one could predict how quickly digital cameras were to transform the photography business -- but both Kodak and Polaroid were far too slow to catch on. Kodak has continued research and development, and still earns billions thanks to digital camera sales, yet the company has struggled, seeing its stock delisted and share prices slump.

Lesson: Watch the trends. These are companies that failed to see an emerging market before it hit them over the head.

U.S. Robotics

History: If you wanted to get online in the 80s and early 90s, odds are good you owned a modem from U.S. Robotics. The company was largely responsible for pushing the Internet access market forward, developing proprietary technologies that meant faster and faster modems -- and continued product sales.

What happened: The V.90 standard for modems meant an end to U.S. Robotics proprietary forms of online access, and the market for modems dried up as consumers switched first to DSL access and then to cable (both using modems that came from the carrier, not the local hardware shop).  The company still exists -- and still makes modems.

Lesson: Success doesn't always mean victory.

URL

http://www.foxnews.com/tech/2011/11/12/heavyweight-to-scrap-heap-whats-future-for-rim/