New in OS X: Get MacRumors Push Notifications on your Mac

Resubscribe Now Close

New Book Explores How the iPhone Contributed to BlackBerry's Downfall

Over the past several years, BlackBerry has gone from one of the top smartphone manufacturers to a company that's struggling to stay afloat in an increasingly competitive market. BlackBerry is hemorrhaging subscribers and losing revenue quarter after quarter as it attempts to turn the tide by focusing on marketing secure devices and software to its enterprise customers.

An upcoming book by Jacquie McNish and Sean Silcoff, Losing the Signal, explores the events that led to the rise and fall of BlackBerry, and an interesting excerpt was shared by The Wall Street Journal today, covering the iPhone's contributions towards BlackBerry's (then known as RIM) failure.

As we've previously learned from Google execs, the launch of the iPhone, which stood apart from all other smartphones on the market at the time, took everyone by surprise. Not only was the iPhone incredibly different from its competitors, it also had features that carriers had previously denied other manufacturers like a full web browser and later, an App Store that had no carrier ties.

blackberryiphone
Image via CIO

One of RIM co-CEO Mike Lazaridis' first comments was "These guys are really, really good," but despite that fact, RIM failed to see the iPhone as a threat due to its lack of security and the fact that it had no keyboard, features RIM execs thought would make it unappealing to RIM's core consumers.
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. RIM's core business customers valued BlackBerry's secure and efficient communication systems. Offering mobile access to broader Internet content, says Mr. Conlee, "was not a space where we parked our business."
RIM executives did not understand the iPhone and were "incredulous" that people were purchasing it, realizing too late that form had become as important as function in the eyes of consumers. In an effort to combat the threat of the iPhone, RIM teamed up with Verizon to create a competing touch-based phone -- the Storm.

Verizon pressured RIM into speeding up development on the phone, resulting in a product that was riddled with bugs and issues when it launched in 2008. Despite the flaws, the product was heavily marketed and RIM sold 1 million in two months, leading to a lot of unhappy customers who wanted to return or exchange their devices.

The Storm was a spectacular failure that impacted RIM's relationship with Verizon, ruined its reputation, and cost upwards of $100 million. After the failure, the company was demoralized and at a crossroads, unsure of where to take the company going forward and how to compete with the iPhone and other smartphones in a landscape that was radically different from what the company knew.

RIM was unable to fully recover from failure of the Storm and find its footing, eventually leading to the path that it's on today. "The Storm failure made it clear we were not the dominant smartphone company anymore, said RIM co-CEO Jim Balsille. "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."

The full excerpt from the book is worth a read and can be found over at The Wall Street Journal. The book itself is coming out on May 26 and can be pre-ordered from Amazon for $21.

Top Rated Comments

(View all)

58 months ago
Lesson learned (again): carriers are clueless
Rating: 25 Votes
58 months ago
As someone who made the unfortunate of buying a Storm (was locked into a Verizon contract at the time), I can attest that RIM had no clue what it was doing. The executives never managed to pull their heads from their asses and design something even moderately competitive. I kept the Storm for a whopping 10 months before switching to AT&T for the iPhone. The Storm was complete garbage. The OS deteriorated over time to the point that I couldn't even answer telephone calls and that was with minimal apps installed and plenty of free space on the device.

I would expect any electronics company to take at least 2 years to catch up to Apple when it enters an industry with a groundbreaking device such as the iPhone, but the fact is RIM had 8 years and couldn't produce ****, all the while insisting that business customers needed a physical keyboard. Sure some are probably still clinging to their Blackberries but that is such a niche market.
Rating: 23 Votes
58 months ago

Steve Jobs and I cannot wait to see that day.


I would say "get a life" to both of you, but...

How soon is too soon?
Rating: 20 Votes
58 months ago
Arrogance. It's that simple.

It killed Nokia, and it killed BlackBerry. It nearly killed Microsoft (Before they managed to recover under S. Nadella).

And it'll be what kills Google as well.
Rating: 19 Votes
58 months ago
Ooh, it's from the same people who brought us Rain and How It Contributes to Wet Grounds. :p
Rating: 17 Votes
58 months ago
Moral: Must keep innovating or you will not survive.
Rating: 17 Votes
58 months ago
Yes, looks were important but the iPhone allowed you to send email with any service desired by the customer. With RIM you were locked into their email and servers. They lost a lot of customers just over that.

Also RIMs third party developer program was so exclusive, it was like applying to a country club or private society club. The rush of apps going on the iPhone also overwhelmed RIM.
Rating: 16 Votes
58 months ago
Steve Jobs talking about RIM
October 2010

"First, let me discuss iPhone. We sold 14.1 million iPhones in the quarter, which represents a 91 percent unit growth over the year-ago quarter, and was well ahead of IDC's latest published estimate of 64 percent growth for the global smartphone market in the September quarter. And it handily beats RIM's 12.1 million BlackBerrys sold, in their most recent quarter ending in August. We've now passed RIM. And I don't see them catching up to us in the foreseeable future.
They must look beyond their area of strength and comfort, into the unfamiliar territory of trying to become a software platform company. I think it's going to be a challenge for them, to create a competitive platform, and to convince developers to create apps for yet a third software platform after iOS and Android. With 300,000 apps on Apple's App Store, RIM has a high mountain ahead of them to climb."
Rating: 14 Votes
58 months ago
Boom!! I worked for Vodafone Retail UK in 2008 when the Storm launched.

In my store we all used unlocked iPhone's as our personal phones (the iPhone wasn't available on Vodafone back then). Anyway we had to sell the Storm.

You have not seen a bigger mess than the Storm. The returns were so high that Vodafone changed their Returns Policy so that there were NO RETURNS and all sales were final. Unhappy customers were literally throwing these Storms back at us.
Rating: 13 Votes
58 months ago
Microsoft Exchange Server deserves the credit. Companies started noticing corporate email works just fine with Exchange connected directly to the internet. Blackberry's middleware became obsolete. Once Apple licensed ActiveSync, people could bring their iPhones to work and the Blackberry handset was done.
Rating: 12 Votes

[ Read All Comments ]