Originally Posted by rgfsteed
I know several people from RIM who I was in school with. When Apple introduced iPhone the fall of 2007, they totally dismissed it. "Apple doesn't know anything about phones.", "The iPhone is a data hog, AT&T hates it and iPhone users can't get email in New York", "It doesn't have native apps.", "It doesn't have push email.", etc.
Their technical arrogance was incredible. I warned them that current superiority means nothing and Apple would do to RIM what RIM did to Palm if they didn't smarten up. What's more is that everything they were saying I would later hear Lazaritis or other senior RIM people saying, which suggests this was a cultural problem that permeated the entire organization.
Their arguments revolved around technical supreriority; the efficiency with which the Blackberry transmits and receives email, the minimal use of data networks, etc. What they all failed to recognize, or concede when I would point it out, was that none of these things mattered to the user. Furthermore, they are all technical limitations that could be (and were) overcome by Apple as it gained experience.
But therein lay the problem. RIM was successful because their customer wasn't
the end user, but rather the carriers. They started with pagers at a time when cellular networks had very little bandwidth. Their email service was hugely successful, not because it was unique, but because their mobile email solution put the least load on the networks. This mattered most to carriers, and carriers sold phones to consumers.
This relationship was ultimately RIM's undoing, and is the bane of most cell phone makers. Users buy phones from carriers, carriers buy phones from the OEMs. Every carrier wants an edge up over their competition, so they demand RIM, and others, to make a unique phone for them. This leads to a large number of phones to develop and support. As a result, RIM has multiple chipsets, multiple cameras, multiple variants of the operating system, etc. And thus the engineering, manufacturing, testing and support costs are enormous. It also makes it difficult to impart change, because the organization you must change is huge and has a lot of momentum.
All of this was fine until Apple came along and changed the game. Technologically, Apple's iPhone was innovative, for sure. However, Apple's truly disruptive innovation was to bypass the carrier and sell the phone directly to consumers. One phone for everyone, in two colors and three sizes. This business model innovation allowed Apple to devote more engineers and developers to a single phone, and pay greater attention to the consumer than the carrier. The popularity of the iPhone had carriers scrambling to get it while Apple resisted making each carrier a separate version. The only exception is where a carriers network requires a different communication chipset.
There's obviously more to the story, such as the use of a more advance operating system, etc. But the moral of the story is not to become arrogant. As Steve said, "Stay hungry, stay foolish".
RIM may do better, if they can learn to be a little hungry and foolish.