BlackBerry lesson: adapt or die in the Internet Age

SAN FRANCISCO — BlackBerry has joined Yahoo, Nokia and other technology industry stars felled by an Internet age in which companies are forced to evolve quickly or perish.

Canadian-based BlackBerry announced Wednesday it would halt in-house production of smartphones, marking the end of an era for the once-dominant handset producer.

Originally known as Research in Motion, the company earned a dedicated following of "CrackBerry" addicts and introduced millions to the smartphone.

But, its luster faded with the introduction of the iPhone in 2007 and the large number of low-costs Android handsets that followed. 

BlackBerry travelled a road well-worn. 

Finland's Nokia, once the world's largest mobile phone maker, has seen its smartphone business go up in smoke as well.

Internet pioneer Yahoo recently inked a deal to sell its core business to US telecommunications firm Verizon after years of struggling in vain to revive growth in an online search market usurped by Google.

"What they have in common is that they haven't reacted well to rapid change from their original positions," said Endpoint Technologies Associates analyst Roger Kay. "Tech has high velocity."

The tech sector is young and fast-moving in an Internet culture that praises "disruption" and "revolution" of industries and lifestyles.

Among mottos found on the walls of leading social network Facebook is "Move fast and break things."

Smartphones themselves have become seemingly indispensible, with people typically replacing handsets every year or two in order to have the newest features or capabilities.

Resting on laurels 

Changing to capitalise on a new trend can be daunting for companies comfortable with products that keep revenue flowing for the moment.

"It reminds me of all those old singers going to Las Vegas to do whatever it is they do when they should really have just stopped," Kay said of tech companies sticking with what early hits.

"Everybody wants to do an encore and get paid again."

When Apple launched the iPhone in 2007, some critiques questioned why the California company was "cannibalising" its successful line of iPods.

The iPhone became a global sensation, and a main driver of stellar profit for Apple.

Kay noted that when Yahoo ruled Internet search it became clear their model was under attack by a newcomer called Google.

Yahoo may not have seen the threat, or may have blinded itself to the need for change because its old business model continued to pump revenue, according to Kay.

And while there are individual specifics underlying the downfall of incumbent mobile phone titans, they all faced the sudden and simultaneous rise of two powerhouses.

Apple disrupted smartphones and lifestyles with its iPhone, and Google fired back with an Android mobile operating system that any consumer electronics maker was free to use.

The Google and Apple one-two punch was enough to essentially "pivot" a smartphone market that incumbents thought was too stable to rattle, according to independent Silicon Valley analyst Rob Enderle.

"None of the big firms were prepared to deal with it," Enderle said of two companies new to the smartphone scene fuelling a revolution.

Unlike the birth of search engine Google on a young and growing Internet, mobile phones were an existing market that incumbents felt they knew well and were "completely taken aback by the combination of Apple and Google", according to Enderle.

Reinvention 

Veteran technology firms being overtaken by newcomers is not necessarily inevitable, if established companies have the wit and courage to re-invent themselves, adapting to survive.

Analyst Kay noted IBM, a century-old technology company that has embraced transformation time and again, even shedding products along the way.

Computer chip giant Intel shifted its focus to microprocessors for mobile devices to adapt to how Internet-connected devices were evolving.

Apple itself was a computer company on the brink of bankruptcy when it staked its future on iPods and iPhones in a winning move that made it one of the most profitable companies on the planet.

The future is a question mark for Microsoft, once the world's largest company, which has fallen behind Apple and Google as the PC industry declines and which is refocusing on enterprise services.

But reinvention is not a cure-all, and needs ongoing commitment to change along with vision of where markets are heading.

IBM now seems tangled in endless restructuring, with revenue declining for more than four years; Intel continues to struggle to find the kind of success it had with big computer chips.

Analysts have taken to wondering whether Apple itself has become too dependent on the iPhone, and is taking too long to come up with "the next big thing".