What BlackBerry needs to do to survive

The future prospects of the iPhone are clear. Apple is going to continue to sell more iPhones and make more and more money from them until the day when Apple can afford to have its new 2.65 million square foot headquarters made from a single block of precision-milled aluminum.

Android is secure. The free mobile OS will continue to gain sophistication and solidify its lock as the number one installed worldwide phone OS, despite making just a little money for a great number of companies. Eventually, civilization will become so paranoid about the unclear “How is Google making money from this?” question that we will habitually say “It’s bliss. All is well. We are not concerned” through clenched smiles any time there’s an Android device nearby.

Even Windows Phone — which, after gains in market share is now described as a “niche” mobile OS instead of “mostly ornamental” — is safe. It’s the exclusive OS of an exciting range of phones with features available nowhere else. Microsoft also needs it to succeed and the impossibility of catching up with Android or iPhone at this point gives them plenty of time to win fans and build credibility. Microsoft won’t collapse as a company because of the low-single-digit market share of its phone platform.

But we can’t say the same of BlackBerry. And where Windows Phone’s share has climbed to the heady space of “mid-single-digit” share, the latest numbers show BlackBerry’s dropping to 1.5 percent.

That stat looks even worse (if such a thing is even possible) when you recall that BlackBerry released BB10 early this year. It was a floor-to-ceiling rethink of the OS. BB10 kept what users liked about BlackBerry, while adopting all of the best lessons of the post-iPhone world.

Some features, like BlackBerry Balance, even surpass what Android and iOS are capable of. BlackBerry handed its users nearly all of the features that they’d been screaming for since the day when Steve Jobs crank-called Starbucks in front of 3,000 people with a preproduction first-gen iPhone.

BlackBerry had a strong quarter when BB10 was released. Alas, this now appears to have been a burst of pent-up demand. Subsequent data shows that the new hardware and OS didn’t do anything to stem the bleeding and keep BlackBerry users in the fold. The company ultimately reported about a billion-dollar writedown in a subsequent quarter, blaming that on unsold phone inventory.

So who’s still using BlackBerry phones, anyway? Pretty much the same people who always did. The BlackBerry is still a “company car.” It’s not as exciting as the three families of phone that vastly outsell it. But like a midrange Toyota, a BlackBerry phone is reliable, familiar, and most importantly very easy to maintain in fleets.

Which is why one could say that the central product of BlackBerry all along hasn’t been the hardware, but the BlackBerry technology for slinging data between hardware. Companies truly value BlackBerry Messenger. And the BlackBerry Enterprise Server saves them trouble and money; it’s the server system that synchronizes company data between networks and devices effortlessly and securely, and gives fine-grained control over almost every aspect of the function, accessibility, and abilities of a company-owned phone. It’s a system built fundamentally as a business communications and admin tool. BlackBerry Enterprise Server wasn’t designed as a set of upgrades for a consumer-oriented OS or syncing service.

Finally, BlackBerry has many of the same workforce advantages as Windows and Office. It’s a well-understood system and when you need to hire or replace support staff, there’s little shortage of expertise available.

It’s also important to look at the market charts for the US versus the rest of the world. The word “iPhone” is practically synonymous with “smartphone” here, but elsewhere, people will assume your prized gold iPhone 5s is actually a Samsung Android device, if you’ve got it in a chunky case.

The numbers are better overseas. But in 2012, even BlackBerry’s strongholds in Asia went the Ozymandias route.

Yup, bleak times. BlackBerry still has a lot going for it, however. Customers are cold on the hardware, but the company is still delivering software and services that business users want and are willing to pay for. The company just released BlackBerry Messenger client apps for Android and iOS, resulting in 20 million new users of the service. Sure, they’re mostly rubberneckers downloading a free app that’s received lots of coverage in the tech press; 20 million users is also a fraction of the attendance that other free chat apps have. But the number indicates that the public is still plenty aware of BlackBerry Messenger, and that they aren’t quite ready to dismiss this company yet.

Further, business reporters more qualified that I (meaning: “people qualified to write about financial matters”) agree that with about two and a half billion dollars in cash on hand and no debt, BlackBerry has plenty of time for course corrections.

In the meantime, a Special Committee has been formed to figure out the next step. They’re going to be bought by somebody. They won’t suffer the ignominy of Palm, bought by a suitor and dropped almost as quickly, its engineers wafting away as spores to deliver Palm OS features and aesthetics to other mobile platforms.

No, BlackBerry will be bought by another tech company with little experience in phone hardware but an eagerness to enter that market. A company like Lenovo or Facebook, two companies reportedly to have at least taken meetings with BlackBerry on that subject … though I can’t imagine Facebook’s interest after their lack of success with Facebook Home. If not that, then it’ll be an investment group that’ll take the company private and put BlackBerry under less pressure to do (theatrical fist slam on boardroom table) SOME-thing.

The one certainty: BlackBerry will stop making hardware. BlackBerry got killed by great Android phones and by Apple phones, and by corporate users who demanded that the IT department let them use those phones on the company network.

In a way, rebuilding the company around software and services could wind up being a great relief to everyone still employed there. Hardware is dicey. Apple does great with the iPhone because iOS, iOS apps, and Apple services are so valuable and the iPhone is the only game in town.

The Android market is more realistic. It’s a blood and bile-filled scrum in which there are always at least a half a dozen great phones with similar features. Android phone makers will try almost any new idea in the hopes that a different screen, a better camera, or a different case style will attract a customer’s eye in the phone store. And if a company guessed wrong, they’ve missed a launch cycle and are stuck with an ungodly pile of stock. It’s all a mug’s game, for sure.

It’d be a nice irony (and a good positive ending to the story) if BlackBerry struggled to wrap a hand around the hilt of the weapon that nearly ended them, pulled out inch by painful inch, and then used that same weapon in offense.

BlackBerry phones were killed by “bring your own phone”?

Fine. Then BlackBerry should let corporate users bring any Android phone they like. Google’s OS can be customized on a broad and deep level; practically any user-facing interactive component can be completely replaced just by adding a new application. BlackBerry could turn any Android 4.x phone into a mere host for a floor to ceiling BlackBerry user experience, with the added benefit of the complete Google Play app library.

BlackBerry will long serve as a cautionary tale. I myself was surprised when I looked at the historical charts of mobile OS market share, and was reminded that BlackBerry continued to grow and gain in the first few years of the iPhone’s release. This tracks with Apple and Google’s campaign to finish building out their respective operating systems and harden them for enterprise use.

We forget that it took years for these two things to develop. They began as colorful caterpillars that couldn’t even cut and paste text. Then they entered a larval stage in which they were good personal phones. They emerged from the chrysalis not so much as delicate butterflies, but as techno-organic BlackBerry death delivery systems.

But in the meantime, life continued to be good for BlackBerry.

Just because the line on the graph keeps going up and investors are happy doesn’t mean that there isn’t something out there about to beak its way out of a laughable shell and ruin everything. At the end of the day, the only valuable metric of success is proof of life.

ABOVE: The Blackberry Z10