BERRY’S TURNED SOUR: A CASE STUDY ON BLACKBERRY

7/25/2019 BERRY’S TURNED SOUR: A CASE STUDY ON BLACKBERRY

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BERRY’S TURNED SOUR: A CASE STUDY ON BLACKBERRY

Submitted by

Aditi Sharma

A0101914089

B 12

MBA (G)

Under the Supervision of

Prof!!or Ram!h Ba"#a

1



ABSTRACT

This case study wi provide an insi!ht to a premier or!anisation" how it nourished itsef in the

competitive arena and thus captured a remar#abe share" !obay$ This case depicts the various

strate!ies adopted by Bac#Berry to sustain durin! the chaen!in! times" and how the decisions

ta#en by other companies vary from decisions ta#en by Bac#Berry%s bosses and what outshines

them from their stru!!in! competitors$ &&Bac#Berry is a company whose name was

synonymous with &Smartphone' eary on$ (t had a commandin! share and owned the corporate

mar#et$ )orporations ed device buyin!$ But that corporate he!emony was aso its demise$ (t

reied on sein! to corporate (T buyers and oc#in! them up with on!*term contracts and

server*based soutions$ (t fe behind on innovation" #ept its app ecosystem cosed and

proprietary" and faied to reco!ni+e the rise of consumer*driven (T buyin!$ ,ow it finds itsefstru!!in! to han! on to some respectabe share in a corporate mar#et it ar!ey created$''

KEY $ORDS

Bac#Berry" revoutioni+ed the mobie industry" wireess emai handin!" security" reiabiity and

productivity

%NTRODUCT%ON

Based out of -ateroo" .ntario" )anada" /esearch in otion &'/('' was the parent company

of Bac#Berry$ 3i#e many other companies" /( was aso an idea of a coe!e dropout$ i#e

3a+aridid and ou!as 5re!in founded /( bac# in 1984$ They were very much impressed by

the wireess technoo!y and wanted to e6pore it even further$ They were so much fascinated by

the wireess technoo!y that they turned /( into first wireess data technoo!y deveoper in

,orth America and the first company outside Scandinavia to deveop connectivity products for

obite6 wiress pac#et*switched data communications networ#s in 1988$ By the start of 1990"

the company was abe to earn revenue for more than a miion doars

2



By 1991" the company had started deveopin! software to support a compete wireess e*mai

system$ By the end of 1997" Bac#Berry was abe to introduce severa #inds of wireess

modems" pa!in! technoo!y" !ateway systems$ The company was abe to !et isted on the

Toronto Stoc# 6chan!e in 199 and was successfu in raisin! funds worth more than US 11:

miion from investors for its ambitious future pans$

(n 1999" after anay+in! the mar#et trends and demands" /( finay aunched its first device

under the brand Bac#Berry$

The name Bac#Berry was not an idea of the founders of /( but it was a creative outcome of

3e6ioon brandin!" )aifornia's ;resident's avid ;ace# brain who ri!ht from the be!innin!

wanted to #eep the name of the product fruity and ended up choosin! the name Bac#Berry and

/( decided to ta#e the same forward for indefinite period of time$

The very first /( device which was Bac#Berry 8:0 was ony a pa!in! device with no voice

support 6hibit 1$

(n the first year" Bac#Berry had ony 2:" 000 users$ (t was aso beieved by many other anaysts"

that the decision ta#en by /( woud be a faiure but the company had sufficient money aon!

with abundance of #nowed!e that enabed them to !o search for mar#ets other than )anada"

which finay heped them to !et isted on ,ASA< in 1999 which heped them to raise US

2:0 miion from the same$

3



R%SE O& BLACKBERRY

/( reinvented the <-/T #eyboard with its Bac#Berry 8:0 and intended to move forward$

/( desired to ta#e over the position of the ruer of the mobie industry*,o#ia" the very

famous*,o#ia -ordwide$

Therefore" to combat its shortcomin!s" /( aunched its very first fu*fed!ed mobie phone

Bac#Berry :810 which supported both voice and data$ Thou!h it was not the perfect start for

/( as the stoc#s remained ow and vaued at US 1$: per share$

Bac#Berry :810 ac#ed the very basic reuirements" such as" it did not have any buit in

microphone or spea#er$ .ne had to aways pu! in proprietary headphones to use the handset for

more than a mobie phone$ The company continued to aunch a series of Bac#Berry devices"one after the other$

-ith the aunch of Bac#Berry @210" the company was finay successfu in deiverin! a pa!er

inside the phone and ater" with the aunch of Bac#Berry 270 the company provided a

compete product which had a the necessary features" i#e the coored screen and most

importanty with the internationa roamin! capabiities$

'O$ BLACKBERRY %N&LUENCED T'E MARKET

Bac#Berry devices were initiay chosen because of their convenience" and were then ta#en to

another eve as a business traveers' device" as these phones were abe to access e*mai$

Bac#Berry was not Cust a business device" as the prices oweredD it made them more reasonabe

and cheaper for peope to buy a handset$

4

Si

A Bac#Berry phone is portabe and can cip onto your bet" or fit in your purse easiy$ (t%s

much smaer than havin! to brin! a aptop computer with you to respond to emai whie

travein! for business



The Bac#Berry ma#es it easy to communicate with a ar!e !roup of peope at once$ By

chec#in! your emai you can access maiin! ists from your office to send a messa!e to

everyoneD this is much more reiabe than te6tin!" as each individua mi!ht not have te6tin! on

their ce phones$

BLACKBERRY SUCCESS

By the end of the year 2004" Bac#Berry customers were more than two miions" which ceary

shows how we the company #new to reach its tar!et audience and was aso we aware about

the strate!ies to be adopted in order to perfecty position its brand$ By the ne6t year" the

company was abe to doube its customers$

There was a time" in the initia sta!es when /( had to tac#e with the teecom operators" but by

the end of 200:" wordwide operators were runnin! after /( to carry its Bac#Berry service in

their respective re!ions$ By 200@" Bac#Berry became a #nown brand in the !oba mar#et" and

was very much desired by everyone$ The very famous competitor" ,o#ia" #ept on up!radin! its

devices to compete with the Bac#Berry devices$ By the end of 200@" Bac#Berry was in a

situation to #ic# out competitors i#e ;am" >;" e" io etc" and was abe to become the

favourite !ad!et" not ony for the business cass" e*mai addict se!ment" but aso the ceebrities

and many other poiticians 6hibit 7 were aso seen usin! the device" which was another hi!h

for the company$ The company was abe to !et its investor's confidence" which made the

5

&*+,tio+

,ot ony can you use the Bac#Berry ;hone as a ce phone"

but you can send te6t messa!es from it chec# your emai

and" on some modes" even surf the (nternet$

&at*r!

,ewer Bac#Berry ce phones have added a feature

simiar to i;ods and i;hone" in that they have touch

screens to ma#e it easier to seect appications and surf

the (nternet

=>(B(T2? The >andy

Bac#Berry evice



company's share reach upto US 124$:1" ma#in! the company's worth over US @$7: Biion

and it thus became )anada's most vauabe company$

$

Bac#Berry was abe to capture :miion subscribers wordwide in its poc#et" which was yet

BLACKBERRY AT %TS PEAK

After receivin! so much success" /( had become a #nown and mature brand across the !obe$

The company was abe to receive stabe infow and outfow of cash$ The !rowth was hittin! an

6

=>(B(T7? The US ;resident" Barac# .bama" shows off his Bac#Berry" with a charm

=>(B(T4? Bac#Berry's mar#et share in 200@



a time hi!h$ /( was abe to !et 10$miion subscribers under its shed by the year 200$ The

company aso adopted a very convincin! strate!y" whereby it pued a its competitors" into its

partners" ri!ht from ,o#ia to ahoo" a had some or the other reationship with /( which

tremendousy boosted the company's voumes$ 200 was the year when Appe (nc$ entered into

the mobie industry with the aunch of its i;hone$

Amost every Cournaist in the word predicted Appe's fa which un#nowin!y tar!eted

Bac#Berry users$ The ony feature that an i;hone and a Bac#Berry had in common was the

abiity to ma#e cas and send messa!es i;hone was a competey different device when

compared with the traditiona Bac#Berrys but what made an i;hone an immediate competitor

of Bac#Berry was with the price brac#et which both of them shared$ i;hone was aunched as a

premium phone$ /('s products aso had premium price ta!s$ >ence" the mar#et" the tar!eted

audience was same but the product offerin!s were different$

-ithin a year of i;hone's aunch" i;hone was abe to capture 10$E smartphone mar#et share

and Bac#Berry hit 19$:E mar#et share$ Both the payers were a!!ressivey steain! business

from ,o#ia but were aso on the ver!e of becomin! head on competitors$ -ith the competition

becomin! tou!her" /( panned to competey chan!e its strate!y$ The company which has been

producin! mobie phones with the <-/T #eypad aunched its very first compete touch*

screen phone" the Bac#Berry Storm$ This not ony indicated how scared the company was with

the i;hone but it aso indicated how ri!orousy Appe was !ainin! popuarity in the mar#et$

.n a cosed front" there were rumours of a technoo!ica deveopment been ta#in! pace by

Foo!e" which was deveopin! an operatin! system it acuired in 200:$ Foo!e reeased the first

version of Android n 2008 but it was not commerciay avaiabe ti 2009$ 2009 was aso the

finest year for /($ /( had done a ot of hardships in smartphone mar#et and it had

maintained 20$E mar#et share in the smartphone mar#et wordwide$ i;hone was aso not much

behind" with its 1$1E and the newy aunched android had mere 7$:E share but considerin!that it was first year of its commercia e6istence" the share was somethin! to worry about for the

two maCor mobie manufa!turers$

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T'E COLLAPSE O& BLACKBERRY

Bac#Berry Storm was officiay decared as a faiure" which even worsens the situation$ Foo!e

with its aunch of Android )upca#e" ater on became a commercia hit$ obie phone

manufactures such as Samsun!" >T) and 3F hit hi!h as soon as they switched to Android

,o#ia was brutay hurt with the rise of these 7 maCor brands" but sti somehow was stru!!in!

to stay in the mar#et$ Smartphone were e6pensive to buy" and were thus not everyone's cup of

tea" therefore common peope sti preferred to stay with ,o#ia$ Bac#Berry had no such

aternative$ (t did brin! down price of its mobie phones" chan!ed its mar#etin! strate!ies and

tried to attract the youn!er se!ment of customers and beieved that with the aunch of some

cheaper version it wi be abe to ta#e over ,o#ia's share in the mar#et" but in vain$ 2010 was a

maCor setbac# for Bac#Berry$ Appe i;hone stood hi!h at 1@$E in the wordwide smartphonemar#et share" Android sur!ed to 2:$:E and Bac#Berry fe to 14$8E$ The year aso mar#ed the

aunch of Appe's i;ad$ Appe had !ained enou!h popuarity with its i;hone and thus panned to

estabish an a new product se!ment$

/( responded to it very uic#y to the same$ (t announced the deveopment of a tabe named

;ayboo#$ /( was tryin! to copy Appe at every eve$ Foo!e was aso not behind$ (t aunched

Android >oneycomb in 2011 and then entered in the tabet race$ /('s Bac#Berry ;ayboo#

was commerciay avaiabe in 2011 and the initia reviews decared the ;ayboo# as a

faied attempt$ /( was constanty osin! its share in the ma r#et which made its

board to constanty #eep revisin! it s str ate!ies $ /('s stoc# price hit the a*time ow

eve$ Bac#Berry's share aso dropped to 8$8E and Android stood as the #in! of smartphone

mar#et$

2012 was a sient year for /( across the !obe$ The two founders made Thorsten >eins as the

new )hief 6ecutive$ The company aso reported its first net oss in ei!ht years$ As the revenue

was decinin!" empoyees" a across the !obe were trimmed" and the company made no si!na

which coud si!nify that it wi be aunchin! new variants with the desired features in to the

mar#et$ -hie other operatin! systems were offerin! thousands of appications" Bac#Berry

coud ony offer few hundreds of them and reied maCory on its Bac#Berry essa!in! service

which was the ony savin! !race of /( and probaby the ony incentive for which peope had

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been buyin! the not so !ood oo#in! Bac#Berrys$ Bac#Berry which was the most adored

phone of the business cass" soon started to be repaced by the i;hone$

;eope had no option but to chan!e their smart phones accordin!y obviousy" as no one wanted

to stic# around with a Bac#Berry when they had more !ood oo#in!" trendy and feature rich

handsets to carry with them$

By the end of 2012" Bac#Berry had nothin! in its bas#et to offer other than the teaser

advertisements for its upcomin! handsets and operatin! systems which #ept on deayin! for

on!$ The year ended with cear si!n si!nifyin! the end for /(" aso the share of Bac#Berry

dropped to 1$1E in maCor mar#ets" it was the end of /('s amost after two decades

.ther maCor !rowin! companies around the !obe such as 3enovo and Foo!e started spendin!

more on /esearch and eveopment in order to device strate!ies to capture the share which was

once hed by Bac#Berry$ .n the other hand" /( was stru!!in! with cash and criticism from

everywhere hovered over the /($

T'E BEG%NN%NG O& T'E END

The new )." Thorsten >eins started with a positive start" committin! that the company's

investment in <,= woud certainy be fruitfuBut in arch" >eins decared on an investor ca"

and pubicay decared about the terribe the situation the company was fafcin!$

>ardy any new product was aunched by Bac#Berry$ The new Bac#Berry 10 software" based

on <,=" was initiay suppose to arrive in the be!innin! of the year 2012" but was ater deayed

ti the ne6t subseuent year" which further ead to :" 000 Cob cuts$ Thou!h the Bac#Berry

;ayboo# deivered with certain chan!es in it" but apart from that" no innovation was created by

the company$

An innovation did arrive in ate Ganuary" 2017 with the aunch of a new mode of mobie phone"

Bac#Berry H10$ Thou!h it was better than the previousy aunched Bac#Berry touch*screen

devices" yet it faied to meet the customer's e6pectations$ The body of the phone was different"

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the software was enhanced" but the overa e6perience was sti ac#in!$ The company foowed

up with the aunch of <10" <: and H70 throu!hout the year" but the overa mar#et share #ept on

shrin#in!$ (t was visibe that the charm Bac#Berry devices once carried was on! !one$

M%STAKES DONE BY BB

UNDEREST%MATED iP'ONE

After the successfu aunch of Appe i;hone in 200" which was a brea#throu!h in the fied of

fu touch*screen mobie phones" /( aunched a simiar cate!ory phone #nown as Bac#Berry

Storm$ As Bac#Berry did not have prior e6perience in the touch screen cate!ory" not too much

of surprise" it was defeated bady by i;hone$ (t faied to create a uniue identity of its own thus

decarin! Appe's US; predominant$

/i!ht at the onset of the aunch of i;hone" it boosted the sta!nant smartphone mar#et and it

cau!ht the rest of the industry off !uard I !ave customers a new set of features which were not

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=>(B(T :? Bac#Berry's ,et (ncome and the entire smartphone mar#et share



restricted to ony e*mai inte!ration but !ave them a whoe new word of Apps I -eb browser$

.n the other hand" a other companies incudin! /( were focusin! on a physica #eyboard

phone but i;hone swept the !ambe in its favor for the obvious reasons$

SUREPRESS TOUC'SCREEN

As discussed above" Appe had created a hu!e mar#et for itsef due to the immense !ood uaity

touch*screen I of course for its ease of use$ -hereas" /( had a touch*screen that fet i#e a #eypad

I user e6perience was worst$ The Sure;ress touch*screen was out an out faiure as one woud have

to !ive e6tra pressure to ma#e a tap$ eanwhie" in September 2008" Foo!e introduced its own

mobie touch*screen operatin! system" Android$ ,ow that a new payer had arrived" /( #new it

woud be !ettin! even tou!her$

BLACKBERRY OS -

The i;hone had been on the mar#et for three years when /( introduced .S @ in ate 2010$ Android

and i.S had robust app stores" mutipe devices" and e6cited deveopers$ /( introduced a much

better .S of atey with better socia interaction" new Apps and much more$ But to the dismay of

/(" it was ony a mar!ina up!rade over Bac#Berry .S : in comparison to i.S which faied to

#eep the users oyaty for a on!er time$

LACK O& %NNO.AT%ON

/( aunched many smartphone which faied to !ive a fi!ht" too much popuar i;hone I

Android phones$ As a resut of continued reCection" it amost stopped manufacturin! the cassic

phones it used to be #nown for$ )orporates were oya to Bac#Berry even after the aunch of

Android and i;hone for a on!er time but youn!er !eneration made a shift to i;hone and other

devices due to ac# of innovation in hardware and other important characteristics" which became

imperative for the current !eneration which unfortunatey" /( coud not provide$ (t's not Cust

comparin! /( with other eaders in the mar#et" but /( itsef ost its power I contro over its

customers due to ac# of innovation and customer research$

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TOOK CUSTOMER LOYALTY &OR GRANTED

/( enCoyed a monopoy for its Bac#berry essen!er Service" which was concentric tocorporate eJmai server I interna messa!e e6chan!e$ The company beieved it had an

unbrea#abe stron!hod on the corporate mar#et as it woud remain the defaut choice$ (t aso

supported this with a research statin! its own 4:E share of the US smartphone mar#et$ But with

new innovations bein! shown up by Appe I Android every passin! year" Bac#berry faied to

maintain its share of corporate cients$ .n the contrary" Appe introduced iessa!e" which was a

free SSKS service between Appe users$

=>(B(T@? Bac#Berry's .vera Gourney of Throu!h Thic# and Thin

SO $'AT S'OULD BLACKBERRY DO NE/T

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Bac#Berry is not Cust any other brand$ (t started from scratch and was abe to achieve the fruits of

success in a very short span$ The company has !rown itsef in a these years and has been praised by

a set of customers in the !oba mar#ets$ (t sti has a substantia user base" ots of assets" and

cruciay a tonne of usefu mobie patents$ So what shoud be the ne6t move for the companyL

The company shoud focus on enhancin! the brand ima!e" and shoud aso start spendin! it's

proceeds more on /esearch and eveopment" mar#etin! and saes strate!ies" and shoud hi!hy

emphasise on increasin! the attractiveness of its products and services which wi hep it to push its

products in the mar#et$ (t shoud consider the foowin! points to!ether" and then form a comebac#

pan?

• Beieve that they sti have a user base out in the mar#et" which are wiin!y

waitin! for their return$

• A faster or better up !radation of the BB10 is very much reuired"

• They shoud aso switch their od Bac#Berry operatin! system" and shoud

switch to better and faster software i#e Android$

• The company had a competitive advanta!e with the access of Bac#Berry

essen!er Services in their device" but that was not the ony feature

enabed the users buy their products

• Advertisin! shoud be a!!ressivey in order to promote their products in the

mar#et

• 5urther chan!es can aso be done in the hardware of the devices" considerin!

the chan!in! demand patterns of the customers$

(n a recent interview with Gacuie c,ish and Sean Sicoff" when as#ed about the future ofBac#Berry" Sean Sicoff repied optimisticay and saidD &'Bac#Berry has two thin!s !oin! for

it? vauabe assets * incudin! thousands of patents and M2 biion in net cashD and ). Gohn

)hen" a veteran fi6*it artist" whose turnaround pan is bac#ed by committed on!*term

sharehoders$ -hen you di! in" however" the business offers itte to cheer about$ Bac#Berry

!enerates 40E of its revenue sein! smartphones and amost as much from service revenue

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fowin! from its oder smartphones sti in use$ espite the aunch of severa new modes"

Bac#Berry device saes continue to drop? the company sod 1$7 miion devices to end users in

its atest uarter" down from 1$@ miion the previous uarter and 1$9 miion the uarter before

that$ Gohn )hen has indicated he needs to se 8 miion to 10 miion for devices to remain a

viabe business$ The trend does not oo# promisin! for him to do that$

Those service revenues are another probem$ Bac#Berry !enerated M1$@ biion ast year from

those service fees" cose to haf of tota revenue$ The company e6pects those service revenues to

fa by 1:E uarter to uarterD that means )hen wi derive Cust over M800 miion from services

this year and" if the trend continues" about M420 miion ne6t year$

The bri!ht spot is Bac#Berry%s software and technoo!y icensin! business$ )hen has promised

to doube those revenues to M:00 miion this year and he%s off to a !ood start" !eneratin! M17

miion in the first uarter" up over 1:0E$ But most of the !ain was from a icensin! dea and it%s

not cear he can steadiy deiver thoseD without icensin!" software is !rowin! by 20E year*over*

year$ ;us" the company admits it won%t be abe to turn its BB instant messa!in! app into a

M100 miion per year business" as was the pan$ Bac#Berry sti has time" options and assets"

but it%s destined to become a much smaer company before we #now how bri!ht a future it

has$''

Bac#Berry's share presenty stabii+es at 0$:E" !obay" under the new )hief 6ecutive .fficer

Gohn )hen$ (n the company's new pan" )hen states that they are pannin! for a comebac# with a

new ran!e of Bac#Berry devices with advanced features$ >e aso caims that &Bac#Berry's new

strate!y and !ood software wi brin! some users bac# to its own phones$ The Bac#Berry e*mai

system is constanty rated the best of its competitors and" as security and coud breaches remain

a probem nowadays" the company has a chance at convincin! professionas that the e*mai is

the common an!ua!e of business and bein! safe is better than bein! in ine with the miions of

peope who own an i;hone or a Samsun! device'$

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0UEST%ONS

<1$ escribe the maCor winnin!s for Bac#Berry which heped it to withhod a

stron! ima!e in the Smartphone mar#et

<2 >ow can Bac#Berry cope up with the deveopments done by its competitorsL

<7 NBac#Berry beieved that it's #itty wi aways hod the maCority of the

customersO$ )omment$

<4 iscuss various mar#etin! strate!ies that Bac#Berry shoud adopt to attain its

ost mar#et shareL

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RE&ERENCES:

Egham, K. (2009), Gartner, Worldwde !mart"hone !ale# $ea%hed &t# 'owe#t

Growth $ate Wth 3.7 er ent &n%rea#e n *o+rth +arter o- 2008, $etreed

-rom htt"/www.gartner.%omnew#roomd910112

emer#, . (2010), rod'-e, +mer# ont 'e, ndrod # !tll *ar -rom

the o", $etreed -rom

htt"/www.drodl-e.%om20100607n+mer#dontleandrod#-ar-rom

theto"

G+#tn, !. (2013), +#ne## me, he *atal #ta:e hat oomed la%:err;,

$etreed -rom htt"/+#ne##.tme.%om20130924the-atalm#ta:ethat

doomedla%:err;

a+ll, . (2013), *ore#, 'e##on# *rom he *all <- la%:err;, $etreed -rom,

htt"/www.-ore#.%om#te#tomta+ll20130923le##on#-romthe-allo-

la%:err;

)a!na" G$ 2014" Associations ,ow" Bac#Berry%s Strate!ic ista#es" and >ow to Avoid Them"

/etrieved from https?KKwww$asaecenter$or!K/esourcesKA,owetai$cfmL(tem,umberP@:2880

Wheatle;, . (2015), !l%on ngle/ la%:err; # "o#ed to ma:e a #t+nnng

%omea%: n 2015, $etreed -rom

htt"/#l%onangle.%omlog20150115la%:err;#"o#edtoma:ea

#t+nnng%omea%:n2015

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http://siliconangle.com/blog/author/mikewheatley/

http://siliconangle.com/blog/author/mikewheatley/



otroc" F$ 201:" Austraian ,ationa /eview" oes Bac#berry have the potentia to ma#e a

comebac#L /etrieved from http?KKwww9$austraiannationareview$comKBac#Berry*potentia*

comebac#K

!harma, $. (2015), the Gloe and al, Wh; la%:err; ha# a =ghtng %han%e at

a %omea%:, $etreed -rom

htt"/www.thegloeandmal.%omte%hnolog;+#ne##te%hnolog;wh;

la%:err;ha#a=ghtng%han%eata%omea%:art%le23312419

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BERRY’S TURNED SOUR: A CASE STUDY ON BLACKBERRY

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Transcript of BERRY’S TURNED SOUR: A CASE STUDY ON BLACKBERRY