Blackberry and Its Decline
http://dealbook.nytimes.com/2013/11/04/blackberry-abandons-effort-to-sell-itself-c-e-o-to-step-down/
A Takeover Bid for BlackBerry Collapses, and Its Chief Executive Vacates His Post
One of the formerly biggest players in the mobile phone industry, BlackBerry is currently in dire straits. Indeed, right now it has very little competitive advantage in both the mobile industry, in which Android and iPhone are dominant, and the new software and services industry it is trying to enter, in which other companies already have established and successful software that allow corporations or governments to control their employee’s handsets. As a result of its uncertain future, a recent takeover bid for BlackBerry has failed, and even its CEO has stepped down. In many ways, this almost dramatic decline of BlackBerry can be attributed to many of the concepts learned in class.
When purchasing technology such as a smartphone, there is a wealth of reviews and information on which phone has the highest specs, is most cost-effective, etc. Although people do not precisely buy a cellphone solely based on the signal of the person who bought before them, but the signals of a few cellphone reviewers can have an incredible information cascading effect on buyers. The top few reviews that come up when searched will have a significant influence on consumers, and these consumers will send signals to other potential consumers, causing an information cascade. In the case of BlackBerry, mediocre reviews coupled with high reviews of other smartphones can be attributed as a factor in its decline. Furthermore, the direct benefit principles cover in class also apply. As BlackBerry’s market share gradually decreased, it eventually passed its unstable equilibrium, and BlackBerry’s supposed popularity became less than its actual popularity, causing people to deviate away from BlackBerry as less and less people use. By direct benefit principles, the BlackBerry is tending to the stable equilibrium of 0, which is roughly what is happening as BlackBerry is more or less leaving the cellphone industry and entering the software/services industry, as talked about in the article. Ultimately, the principles of Networks have far reaching effects into our daily lives, and this is one example of such.