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New book says BlackBerry ignored iPhone threat because it misunderstood market

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.


Headquarters of RIM, now BlackBerry, in Waterloo, Ontario. | Source: The Globe and Mail


"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.