Can “Network Externalities” save BlackBerry

http://seekingalpha.com/article/3003466-blackberrys-john-chen-looks-to-teach-haters-about-network-externalities

In recent years the Blackberry company has been in steady decline. With new smart phone manufactures eating up the market Blackberry has been losing subscribers at a rate of 3 million per quarter.  The CEO of BlackBerry however believes that the BlackBerry company can make a turn around.  CEO John Chen believes the key to BlackBerry’s turn around will be “Network Externalities”.  Network externalities are the changes in benefits a user of a product receives, when the number of people using it increases. BlackBerry hopes to reach these positive network externalities with the introduction of a partnership with Samsung and the release of BlackBerry’s newest product BES 12 EMM.   BlackBerry’s product BES 12 EMM is an operating system that will improve security for smartphone users and allow a phone to have two numbers, which makes it easier for companies to pin point how much to pay employees for work related phone calls.  Studies suggest that in years to come, many employers will have a bring your own phone to work policies. BlackBerry hopes to fit into this niche with their BES 12 EMM product, which claims to have the best security system. The network externalities come in when more people start to use the BES 12 EMM.   With more people using BES 12 EMM it would make companies more secure, improve ease of use of the network, and create a stronger network. The positive network externalities do not end with users and the BlackBerry company.  With the use of the BES 12 EMM system partner Samsung would benefit, as well as Google with the increases in network security and revenue. If BlackBerry stays ahead in the market, positive network externalities just might put them back on top.

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2 thoughts on “Can “Network Externalities” save BlackBerry”

  1. an interesting read, but I can’t see BB making a comeback anytime soon unless they begin to offer a product that can interact with the android market and not compete with it. BB’s downfall was that while the rest of the world was adopting a more ‘fun’ way of using mobile devices (i.e. through developed appstores) they focused on maintaining their current corporate image. What BB failed to realize is that mobile phones are not just for men in suits anymore everyone who has a smartphone expects it to have a handful of apps and features, and if they cannot provide those then they can’t grow as a company. Businessmen like to play too, so if BB wanted to grow they should have worked on developing an appstore or adopting someone else’s so as not to lost the users that pick a phone for it’s selfie camera for snapchat/instagram and its ability to play candy crush.

  2. I believe that BB have a chance at making a comeback if they can introduce some unique features on their device that there competitors have yet to offer. For example, the two numbers to one phone thing is slightly unique, but is it really enough for companies to make a purchase? In such a competitive market, I’m not sure if BB’s new phone has enough to offer to pass the tipping point. Let’s hope that their marketing strategy will help them reach enough people to bring them back in the game.

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