Roger Fingas
An excerpt from an upcoming book on the rise and collapse of Canadian smartphone maker BlackBerry suggests that while the company — then known as RIM — had some appreciation for 2007's first-generation iPhone, it did not see the device as a threat given RIM's core customers.
"If the iPhone gained traction, RIM's senior executives believed, it would be with consumers who cared more about YouTube and other Internet escapes than efficiency and security," reads one portion of an excerpt from Jacquie McNish and Sean Silcoff's Losing the Signal, as published by the Wall Street Journal. The company believed that its central business customers cared more about security and efficient communication — for instance through the signature BlackBerry physical keyboard — than having the full internet in their pocket.
At the time, most phones had extremely limited Web and video functions and clumsy button-based browsers. The iPhone was the first smartphone with a Web browser comparable to the desktop, as well as an all-touchscreen interface. Apple moreover negotiated with AT&T to allow unlimited data, something unheard of when most data plans were still measured in megabytes.
RIM executives allegedly did not fully understand the iPhone or why people were buying it, another argument being the device's poor battery life. Once the company did react it partnered with Verizon on the touch-based BlackBerry Storm, but the former pushed RIM into shipping the product quickly, resulting in a botched phone that many people returned despite initially strong sales.
The Storm was a watershed moment, not only hurting RIM financially but wrecking public opinion and its partnership with Verizon. The company then had no idea of which path it needed to take. "We're grappling with who we are because we can't be who we used to be anymore, which sucked...It's not clear what the hell to do," said one of the company's former CEOs, Jim Balsille.
Losing the Signal is available for $20.81 from Amazon and is due to ship on May 26.
Christine McKee
Malcolm Owen
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Amber Neely
108 Comments
As a denouement to the mid-2000s upheaval wrought on the cell-phone market by the iPhone, this book may have historical value, but the RIM co-CEOs have long since been shown to be fools. Better just to forget about them now, except for use as a case study on what not to do in the face of a misunderstood existential threat to your business. Also, hindsight is 20/20.
Even about a year and a half ago, Blackberry was still promoting high network efficiency, even though that hasn't been an issue for years. That efficiency hammers the Blackberry on high bandwidth networks such as most all organizations have now, because it doesn't use that bandwidth properly. Therefore, high bandwidth files operate slowly. This is one of the reasons the Blackberry has been mostly abandoned. They were acting as though networks were still in the late 1990's.
This is a classic tail of industry disruption where the dominant player is blinded by success and is unable to react to a new paradigm. There are a lot of people that could see the writing on the wall far before Blackberry acknowledged that they had a problem. At that point it was too late.
really?!
If there isn't already, there will one day be a business school case-study on what to do when Apple enters your market. The company that will be the focus of that study will be Nike. First, partner with Apple. Then, about a year before the Watch comes out, get out of the fitness band business and focus on fitness software. Nike even let Apple hire away some of the Nike Fuelband engineers, no lawsuit on the horizon.