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

Recruitment Genius: Office Administrator

£16000 - £20000 per annum: Recruitment Genius: Established managed services IT...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Recruitment Genius: Plant Fitter - Construction Industry

Negotiable: Recruitment Genius: This well established construction equipment d...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + Uncapped Commission: SThree: As a Trainee Recruitm...

Day In a Page

Read Next
Bahrainis on an anti-government protest in May  

Hussain Jawad's detainment and torture highlights Britain's shameless stance on Bahraini rights

Emanuel Stoakes
August 1923: Immigrants in a dining hall on Ellis Island, New York.  

This election demonises the weakest

Stefano Hatfield
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003