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

iJobs Job Widget
iJobs General

JavaScript Developer (Angular, Web Forms, HTML5, Ext JS,CSS3)

£40000 - £45000 per annum + Benefits + Bonus: Harrington Starr: JavaScript Dev...

BC2

£50000 - £70000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

SAP Data Migration Consultant

competitive: Progressive Recruitment: My client, a FTSE 100 organisation are u...

Programme Support, Coms, Bristol, £300-350p/d

£300 - £350 per day + competitive: Orgtel: My client, a leading bank, is curre...

Day In a Page

Read Next
 

i Editor's Letter: The final instalment of our WW1 series

Oliver Duff Oliver Duff
 

Simon Usborne: The more you watch pro cycling, the more you understand its social complexity

Simon Usborne
A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice