Once dubbed the ‘CrackBerry’, the smartphone company suffered a calamitous decline in the business it helped revolutionise
BlackBerry, once the global leader in smartphone technology, has put itself up for sale after years of falling sales and failed revamps.
Once seen as so habit-forming its users dubbed it the “CrackBerry”, Blackberry has suffered a calamitous decline as rivals revolutionised the business it did so much to start. On Monday the company previously known as Research in Motion (RIM) announced it had decided to “explore strategic alternatives”. Buyers are being sought, though the company could also go private or be broken up. Few analysts expect a turnaround.
Unable to match Apple‘s iPhone for cool or the sheer range of devices from Samsung and others using Google’s Android mobile system, its market share has collapsed from close to 50% in the US in 2009 to less than 3%, according to figures released last week by the analyst IDC. On the day the news broke, the Z10, BlackBerry’s latest, much-hyped device was being offered for $19.99 by US mobile retailer Wirefly. It was selling for $199 when it was launched earlier this year.
For BlackBerry watchers, the news is no surprise. The company lost $84m in the last quarter and announced 5,000 layoffs last year. “The beginning of the end started some time ago,” said Stuart Jeffrey, analyst at Nomura Securities. He said the company’s statement suggested it no longer had any confidence in its ability to get out its current predicament. BlackBerry, he predicts, is likely to re-emerge as a software company, perhaps with some contracts for super-secure government devices, but “without the handicap of all those uncompetitive handsets”.
How a company that once defined the smartphone messed up so badly is likely to become a classic case study for business schools around the world. The first BlackBerry device, an email pager, was released in 1999 and allowed busy execs to collect and reply to their messages on the go in a way that revolutionized business communications. The BlackBerry Curve, Pearl and Bold followed shortly after, adding cameras and features to broaden the company’s appeal to consumers.
But then in 2007 came the iPhone. At first BlackBerry relied on its ties to the business community and its perceived advantages in security to fend off Apple’s attack. It didn’t work. Apple’s Steve Jobs had spotted that mobile devices were becoming media devices – powered by the increasing prevalence of Wi-Fi and more high powered mobile networks – music and games were set to be as important as email in the smartphone future. Google was soon chasing Apple in the mobile market with its Android operating system, Blackberry fell further behind. The arrival of apps let people personalise their mobiles and further changed the ways they used their devices.
When Apple launched the iPad, BlackBerry responded with its own tablet the PlayBook, which proved a massive failure and underlined how far behind the company had fallen. Blackberry was left looking clunky and uncool in a sector that was becoming ever more fashion conscious and fast moving.
In 2012 Marissa Mayer, a hotshot former Google exec, was drafted in to revamp Yahoo, another tech giant with an image issue. One of her first moves was to scrap company BlackBerrys. “We literally are moving the company from BlackBerrys to smartphones. One of the really important things for Yahoo’s strategy moving forward is mobile,” she told Fortune magazine, suggesting BlackBerry was neither a smartphone nor important in mobile.
Even Barack Obama, for long BlackBerry’s most high-profile fan, seems to have cooled on the company. As a candidate in 2008, Obama criss-crossed America with his BlackBerry seemingly glued to hand. After his election there were fears he might have to end his CrackBerry addiction due to security fears. But he fought hard, and successfully, to keep the device. “Let the man have his BlackBerry,” John Podesta, co-chairman of Obama’s transition team, told security chiefs. Without it “he’d be like a caged lion padding restlessly around the West Wing, wondering what’s happening on the other side of the iron bars that surround the People’s House”.
The president is still a BlackBerry man and could be spotted bashing away at his device during his inauguration in January. But daughters Sasha and Malia stole the show snapping pictures of their kissing parents on their iPhones. And even Obama now reportedly prefers to use an iPad for security briefings.
BlackBerry launched its latest operating system, BlackBerry 10, and three new devices this year. They got positive reviews. But, says Carolina Milanesi, analyst at Gartner, it was too little and way too late. “They have suffered a fate a lot of big guys suffer from. They were the first to market, they created the smartphone as we know it. They just didn’t see what was coming next,” she said.
“People can choose what device they want for work these days, and they don’t want BlackBerry. Brand is important, cool factor is important, and BlackBerry lost out on that. But even that’s not enough these days,” she said. “You need the eco-system, you need to offer the same experience on different devices.”
Smartphones these days are more about music, photos and video than they are about email. BlackBerry for too long relied on its business customers to keep it in the game, said Milanesi. “But these days you don’t want to be boring in business.
Nokia awarded contract to build 4G network on the moon
Nokia has been awarded a contract to establish a 4G network on the moon. The contract is one of several that NASA is awarding to companies as it plans a return to the moon.
The $14.1 million contract was given to Nokia’s US subsidiary and is a small part of the $370 million total awarded to companies such as SpaceX. The cellular service will allow astronauts, rovers, lunar landers, and habitats to communicate with one another according to Jim Reuter, the Associate Administrator for NASA’s Space.
The 4G network that Nokia will build will be miles superior to the form of communication that was used during the early missions to the moon.
This is not Nokia’s first attempt to launch an LTE network on the moon. It planned to do so in 2018 in collaboration with PTScientists, a German space firm, and Vodafone UK to launch an LTE network at the site of the Apollo 17 landing but the plan never came to fruition.
Stripe acquires Nigeria’s Paystack for $200M+ to expand into the African continent
When Stripe announced earlier this year that it had picked up another $600 million in funding, it said one big reason for the funding was to expand its API-based payments services into more geographies. Today the company is coming good on that plan in the form of some M&A.
Stripe is acquiring Paystack, a startup out of Lagos, Nigeria that, like Stripe, provides a quick way to integrate payments services into an online or offline transaction by way of an API. (We and others have referred to it in the past as “the Stripe of Africa.”)
Paystack currently has around 60,000 customers, including small businesses, larger corporates, fintechs, educational institutions and online betting companies, and the plan will be for it to continue operating independently, the companies said.
Terms of the deal are not being disclosed, but sources close to it confirm that it’s over $200 million. That makes this the biggest startup acquisition to date to come out of Nigeria, as well as Stripe’s biggest acquisition to date anywhere. (Sendwave, acquired by WorldRemit in a $500 million deal in August, is based out of Kenya.)
It’s also a notable shift in Stripe’s strategy as it continues to mature: Typically, it has only acquired smaller companies to expand its technology stack, rather than its global footprint.
The deal underscores two interesting points about Stripe, now valued at $36 billion and regularly tipped as an IPO candidate. (Note: It has never commented on those plans up to now.) First is how it is doubling down on geographic expansion: Even before this news, it had added 17 countries to its platform in the last 18 months, along with progressive feature expansion. And second is how Stripe is putting a bet on the emerging markets of Africa specifically in the future of its own growth.
“There is enormous opportunity,” said Patrick Collison, Stripe’s co-founder and CEO, in an interview with TechCrunch. “In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30% every year. And even with wider global declines, online shoppers are growing twice as fast. Stripe thinks on a longer time horizon than others because we are an infrastructure company. We are thinking of what the world will look like in 2040-2050.”
For Paystack, the deal will give the company a lot more fuel (that is, investment) to build out further in Nigeria and expand to other markets, CEO Shola Akinlade said in an interview.
“Paystack was not for sale when Stripe approached us,” said Akinlade, who co-founded the company with Ezra Olubi (who is the CTO). “For us, it’s about the mission. I’m driven by the mission to accelerate payments on the continent, and I am convinced that Stripe will help us get there faster. It is a very natural move.”
Paystack had been on Stripe’s radar for some time prior to acquiring it. Like its U.S. counterpart, the Nigerian startup went through Y Combinator — that was in 2016, and it was actually the first-ever startup out of Nigeria to get into the world-famous incubator. Then, in 2018, Stripe led an $8 million funding round for Paystack, with others participating, including Visa and Tencent. (And for the record, Akinlade said that Visa and Tencent had not approached it for acquisition. Both have been regular investors in startups on the continent.)
In the last several years, Stripe has made a number of investments into startups building technology or businesses in areas where Stripe has yet to move. This year, those investments have included backing an investment in universal checkout service Fast, and backing the Philippines-based payment platform PayMongo.
Collison said that while acquiring Paystack after investing in it was a big move for the company, people also shouldn’t read too much into it in terms of Stripe’s bigger acquisition policy.
“When we invest in startups we’re not trying to tie them up with complicated strategic investments,” Collison said. “We try to understand the broader ecosystem, and keep our eyes pointed outwards and see where we can help.”
That is to say, there are no plans to acquire other regional companies or other operations simply to expand Stripe’s footprint, with the interest in Paystack being about how well they’d built the company, not just where they are located.
“A lot of companies have been, let’s say, heavily influenced by Stripe,” Collison said, raising his eyebrows a little. “But with Paystack, clearly they’ve put a lot of original thinking into how to do things better. There are some details of Stripe that we consider mistakes, but we can see that Paystack ‘gets it,’ it’s clear from the site and from the product sensibilities, and that has nothing to do with them being in Africa or African.”
Stripe, with its business firmly in the world of digital transactions, already has a strong line in the detection and prevention of fraud and other financial crimes. It has developed an extensive platform of fraud protection tools, but even with that, incidents can slip through the cracks. Just last month, Stripe was ordered to pay $120,000 in a case in Massachusetts after failing to protect users in a $15 million cryptocurrency scam.
Now, bringing on a business from Nigeria could give the company a different kind of risk exposure. Nigeria is the biggest economy in Africa, but it is also one of the more corrupt on the continent, according to research from Transparency International.
And related to that, it also has a very contentious approach to law and order. Nigeria has been embroiled in protests in the last week with demonstrators calling for the disbanding of the country’s Special Anti-Robbery Squad, after multiple accusations of brutality, including extrajudicial killings, extortion and torture. In fact, Stripe and Paystack postponed the original announcement in part because of the current situation in the country.
But while those troubles continue to be worked through (and hopefully eventually resolved, by way of government reform in response to demonstrators’ demands), Paystack’s acquisition is a notable foil to those themes. It points to how talented people in the region are identifying problems in the market and building technology to help fix them, as a way of improving how people can transact, and in turn, economic outcomes more generally.
The company got its start back when Akinlade, for fun (!) built a quick way of integrating a card transaction into a web page, and it was the simplicity of how it worked that spurred him and his co-founder to think of how to develop that into something others could use. That became the germination of the idea that eventually landed them at YC and in the scope of Stripe.
“We’re still very early in the Paystack payments ecosystem, which is super broken,” said Akinlade. The company today provides a payments API, and it makes revenue every time a transaction is made using it. He wouldn’t talk about what else is on Paystack’s radar, but when you consider Stripe’s own product trajectory as a template, there is a wide range of accounting, fraud, card, cash advance and other services to meet business needs that could be built around that to expand the business. “Most of what we will be building in Africa has not been built yet.”
Last month, at Disrupt, we interviewed another successful entrepreneur in the country, Tunde Kehinde, who wisely noted that more exits of promising startups — either by going public or getting acquired — will help lift up the whole ecosystem. In that regard, Stripe’s move is a vote of confidence not just for the potential of the region, but for those putting in the efforts to build tech and continue improving outcomes for everyone.
#EndSARS Twitter’s Jack Dorsey seeks support with Bitcoin
Billionaire boss of the leading social media platform Twitter, and payments company Square, Jack Dorsey, has joined in support of the #EndSARS protest that has overtaken Nigeria.
A few hours ago, Dorsey took to his Twitter handle to solicit support for Nigerian protesters seeking an end to Police brutality and calling for reforms.
He tweeted, “Donate via Bitcoin to help #EndSARS,” while also retweeting a tweet from the Feminist Coalition informing people of the modes by which contributions can be made.
Twitter CEO has been a longstanding Bitcoin supporter. In the past, he has said Bitcoin is “probably the best” native currency of the internet due to it being “consensus-driven” and “built by everyone.”
Recall, some days ago, Square, Inc. (NYSE: SQ) led by Twitter’s Jack Dorsey on October 8th disclosed that it purchased, 4,709 bitcoins at an estimated worth of $50 million.
Square added it invested in cryptos because it saw it as a tool for economic enhancement via participation in the future of payment systems, which aligns with Square’s objectives.
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