BlackBerry’s fall is a symptom of technology’s new world order

Global sales of smartphones have now passed those of regular phones

Share

So “Crackberry” has cracked. BlackBerry brought the world  convenient mobile access to email, something so addictive that it gained the drug-inspired sobriquet. Now a business worth some $80bn at its peak in 2008 is now worth less than $5bn, if the present private bid for the company goes through. It changed the way we live, but as so often happens, innovation has not been enough to generate sustained commercial success.

It is a fascinating story, which will be chewed over in business schools for years to come. But it is also part of a wider story about the ways in which the communications revolution is changing power relationships in the world economy.

Last month Gartner, the research organisation that specialises in the communications industry, revealed that sales of smartphones had passed those of regular phones for the first time. In the second quarter of this year we bought 225 million smartphones, out of a total of 435 million. There are now six billion mobile phone contracts in the world, out of seven billion people – more  than the four-and-a-half billion with access to a working loo.

Mobile phones, and now smartphones, have seen a faster take-up than any other technology: faster than television, far faster than cars, faster even than the Internet. As such it has several unusual features. For a start, this is a demand-driven revolution, rather than a supply-driven one. We don’t have to be told by advertisers that this is something we want when we don’t really need it. Second, the technological lead that any company can sustain is extremely fragile. Nokia was the world’s largest phone maker but has seen a collapse in its market share and been forced to sell that bit of its business. Currently the smartphone business is dominated by Samsung and Apple but that lead could be overturned in a few years. This is utterly different from just about every other area of the corporate world, where once a strong market position is achieved, it is takes a long time to be dislodged from it.

Third, this is the first set of technologies where North America and Western Europe do not dominate the market, even in its present still-early stages. The top six markets are China, India, the US, Brazil, Russia and Indonesia, in that order. This is a technology where the markets are led by the BRICs.

That leads into the most interesting and important debate about the future balance of the world economy. Here are a set of technologies developed in the West: BlackBerry are just one of a number of companies whose innovations and commercial zeal have got us where we are now – Apple, Facebook, Google, Vodafone and so on. The rest of the world has adopted what we in the West created. Naturally there has been innovation elsewhere too, as the Samsung-Apple patent war shows. It may sound harsh, but basically the emerging world has grabbed  our technologies, sometimes developing them, but often directly copying. Their economic success (which I much admire) has been built by their brawn, but on the ideas of our brains.

That raises a host of issues, of which from the emerging world perspective the most important  is: can the BRICs get beyond  middle-income status? Since technology is universally available, maybe countries’ economic progress will be distinguished by the quality of their human capital and the solidity of their social structures.

And the big issue from the developed world perspective? Well how do we maintain our lead, when everyone else can chase along so fast behind us?

What this US housing boom might bring

Print the money and it has to go somewhere. We in the UK fret about the unaffordability of housing and the need to increase the supply of new homes. But even in the US, where supply is less of an issue, house prices are booming. The annual rate of US house inflation is currently 12.3 per cent, according to the Case-Shiller index published yesterday.

In the US, as here, the boom in prices has underpinned consumer demand and boosted the turnover in existing homes, but as yet has only just begun to generate new housing starts. As you would expect. The question is will this continue and, if so, what implications are there for monetary policy? Was the Fed wrong not to start tapering down its monthly purchases of Treasury securities?

Well though prices were up in these latest figures, the pace seems to be easing. Long-term mortgage rates are rising – up 1.3 points to 4.4 per cent. So in a way the market is leading the Fed in tightening policy instead of the other way round. The big thing to watch, and most relevant to us here, is whether house prices pick up through the autumn. If they do, the pressure on the Fed to tighten will become irresistible. If our own housing market carries on climbing, ditto.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Offshore Engineering Design Manager

£50000 - £60000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Offshore Wind Grid Connection Specialist

£50000 - £60000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

SEN Science Teacher

£21804 - £31868 per annum + SEN allowance: Randstad Education Chelmsford: Are ...

History Teacher

£90 - £120 per day: Randstad Education Hull: Randstad Education are looking fo...

Day In a Page

Read Next
A Palestinian man carries the body of a one-year-old baby Noha Mesleh, who died of wounds sustained after a UN school in Beit Hanun was hit by an Israeli tank shell  

Gaza is too busy burying its children to report on its injured owls

Mira Bar Hillel
Abd Mubin Rahim of Malaysia falls to the floor after an unsuccessful lift during the Men's Weightlifting  

Usain Bolt was right about the Commonwealth Games, but we shouldn't blame the organisers

Teddy Cutler
Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices