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AT&T asked RIM for iPhone competitor while it was Apple's exclusive carrier

post #1 of 42
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In 2010, when the iPhone was still exclusive to AT&T in the U.S., the carrier turned to Research in Motion and asked it to develop a touchscreen device to compete with the iPhone, a new report reveals.

AT&T wasn't alone in worrying that the popularity of the iPhone could give Apple too much power, according to The Wall Street Journal. While AT&T and RIM collaborated to make the BlackBerry Torch, Verizon and Vodafone also worked with RIM on the first BlackBerry touchscreen device, the Storm.

AT&T and Verizon both reportedly turned to RIM because they were concerned about the "wild popularity of the iPhone." Their goals in partnering with RIM were to prevent Apple from gaining "outsize influence in the market," the report said.

The Journal's report recalls RIM's many missteps over the years in anticipation of the company's earnings report set to be released later Thursday, in which it is expected to report a quarterly loss. Among the issues at RIM was what former executives called a "split personality in the executive suite" between former co-CEOs Mike Lazaridis and Jim Balsillie.

Lazaridis reportedly wanted to focus on launching a next-generation BlackBerry with a new operating system, while Balsillie wanted to turn the company around by licensing out some of RIM's proprietary technologies. One report from April revealed Balsillie's plans to use RIM's network to offer inexpensive data plans and services to non-BlackBerry devices.

BlackBerry


The company's own sales division reportedly forecast a coming shift in the smartphone market in 2010, according to people who spoke with the Journal. An internal research report found that touch-only devices like Apple's iPhone would become more popular than keyboard-driven handsets that BlackBerry was known for, but "the warning was ignored."

The report also said that Balsillie wasn't worried about the consumerization of devices in the workplace, as employees began bringing their own smartphones to work and asking their employer to let them work on those devices. While some RIM executives viewed the trend as "a threat," Balsillie reportedly didn't share those views.

The RIM co-founders stepped down as chairmen and CEOs of the company in January and were replaced by Thorsten Heins. But the company's fortunes have not improved so far in 2012, as RIM stock fell to single digits for the first time in eight years earlier this month.

RIM announced late last month that it expects to report an operating loss for the previous quarter. The company also recently announced plans to cut 40 percent of its workforce in an effort to slash costs and turn the company around.
post #2 of 42

What a bunch of dirt bags AT&T must be. 

post #3 of 42
Quote:
Originally Posted by massconn72 View Post

What a bunch of dirt bags AT&T must be. 

Why? It is just business. First rule of investing is 'Diversify'.

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post #4 of 42

In any business, management must worry about what power and control either vendors or customers will have on the business and they act accordingly.  Or in many cases they don't act at all or make the wrong decisions.

 

AT&T was a customer of Apple's that had very little control over how things played out.  Of course they were going to seek to help other hardware providers bring competitive products to market to reduce the dependency on Apple - should Apple decide to pull their support of AT&T.

 

Now I would agree that it's probably mostly true that the management at AT&T are unscrupulous, but I think it may be for a whole other rash of reasons.

post #5 of 42
Quote:
AT&T was a customer of Apple's that had very little control over how things played out.  Of course they were going to seek to help other hardware providers bring competitive products to market to reduce the dependency on Apple - should Apple decide to pull their support of AT&T.

The problem with this behavior is that if your vendor finds out, they may decide to look for other competing channels to sell their product which will take customers away from you.

post #6 of 42
Quote:
Originally Posted by massconn72 View Post

What a bunch of dirt bags AT&T must be. 

So it was OK for Apple to talk to other carriers but not for AT&T to talk to other handset manufacturers (since Apple must have been talking with competitors before AT&T's exclusivity ran out or they wouldn't have been able to move as quickly when it ended)? That's some rather strange logic.

As long as there was no restriction in the agreement preventing them from talking to other manufacturers and as long as no confidential information was shared, there's absolutely nothing wrong with it. In fact, prudence makes talking to alternative suppliers obligatory.

Ridiculous story.
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post #7 of 42
Quote:
Originally Posted by GadgetCanada View Post

Mike Lazaridis had it wrong and Jim Balsillie had it right.

 

 

I have to agree. RIM stood zero chance in hell of beating Apple head to head. 

post #8 of 42
Quote:
Originally Posted by sessamoid View Post

The problem with this behavior is that if your vendor finds out, they may decide to look for other competing channels to sell their product which will take customers away from you.

That's the way business works.  I used to sell to Wal-Mart and always thought they were the best retailer to do business with for all sorts of reasons.  All I heard from other businesses and friends was that Wal-Mart doesn't care about me or my company and they'll simply get a Chinese factory to make what we were making cheaper than we could.  Our business was smarter than that - we didn't just sit around waiting for the day when Wal-Mart (or any other mass retailer) came to tell us they found a cheaper source.  We did the work, talking to several Chinese factories, who at the time actually couldn't compete with our company.  If you're smart in business you're always looking at options for both suppliers and customers, because having all your eggs in one basket does not make for a good long-term strategy.

 

It can be good in the short term (AT&T and the original iPhone are a perfect example), but eventually will bite either party in the butt in time.

post #9 of 42
This explains how self-entitled these carriers are. Here's a thought carriers - just provide service and stop worrying about "control." Sell me voice and data service at a fair price and that's it. Use profits to improve your infrastructure and keep a little for yourselves. Is that too much to ask? If you want to offer a subsidy in exchange for a contract, that's fair too - just be up front about it.
post #10 of 42

Ah, if only making great hardware + great OS + great ecosystem were as simple as asking for it!

post #11 of 42
Their goals in partnering with RIM were to prevent Apple from gaining "outsize influence in the market," the report said.

How did that work out for you AT&T? ROFL
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post #12 of 42

It's called a free market folks.  In case you were confused

post #13 of 42
If my wife did the equivalent I'd be ticked off. Business doing it? Eh.
post #14 of 42
Quote:
Originally Posted by massconn72 View Post

What a bunch of dirt bags AT&T must be. 

Another way to look at it is that the iPhone was so good even skulduggery by the carrier couldn't stop it. RIM and Nokia, even with AT&T's help, couldn't come up with a product to compete. Now they are on their way out.
post #15 of 42
Quote:
Originally Posted by GadgetCanada View Post

Mike Lazaridis had it wrong and Jim Balsillie had it right. Looks like Mike won and RIM as a company lost. Perfect example of the stupidity of having co-CEO's.

 

I agree completely. If RIM had used their expertise in saving data and push to make it possible, at least with RIM phones to be inexpensive smartphones with say, $15 plans that averaged 200-500 megs a month of use, they would be in a much better position. Not everyone can go vertical and Apple is the best in the world at it.

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post #16 of 42
AT&T paid a four billion dollar break up fee recently, their management is inept.
post #17 of 42
AT&T turned to Research in Motion and asked it to develop a touchscreen device to compete with the iPhone, a new report reveals.

That's like turning to Fred Phelps and Westboro Baptist Church for a sermon on love and forbearance.
post #18 of 42
Quote:
Originally Posted by jmbones View Post

It's called a free market folks.  In case you were confused

Lordy we all get so tired of hearing that.  It's a lame excuse for bad behavior.

post #19 of 42
Quote:
Originally Posted by WelshDog View Post

Lordy we all get so tired of hearing that.  It's a lame excuse for bad behavior.

I'm still waiting for you to explain why it's bad behavior.

Businesses are free to talk to any potential supplier they wish unless they sign a contract saying otherwise. Since I doubt if you have a copy of the Apple/AT&T contract, you're not in a position to say if it's bad behavior or not.

And if talking with competitors was forbidden, then AT&T wouldn't have been able to sell ANY phone but the iPhone - which was clearly not the case.
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post #20 of 42

I disagree, at that point they knew they were going to lose their exclusive rights to the iPhone, everybody did.  So what's wrong with them trying to find a different phone supplier? Absolutely nothing!!

post #21 of 42

Amen!!

post #22 of 42
Quote:
Originally Posted by WelshDog View Post

Lordy we all get so tired of hearing that.  It's a lame excuse for bad behavior.

I disagree, at that point they knew they were going to lose their exclusive rights to the iPhone, everybody did.  So what's wrong with them trying to find a different phone supplier? Absolutely nothing!!

 

Sorry for the double post

post #23 of 42
Quote:
Originally Posted by jmgregory1 View Post

That's the way business works.  I used to sell to Wal-Mart and always thought they were the best retailer to do business with for all sorts of reasons.  All I heard from other businesses and friends was that Wal-Mart doesn't care about me or my company and they'll simply get a Chinese factory to make what we were making cheaper than we could.  Our business was smarter than that - we didn't just sit around waiting for the day when Wal-Mart (or any other mass retailer) came to tell us they found a cheaper source.  We did the work, talking to several Chinese factories, who at the time actually couldn't compete with our company.  If you're smart in business you're always looking at options for both suppliers and customers, because having all your eggs in one basket does not make for a good long-term strategy.

It can be good in the short term (AT&T and the original iPhone are a perfect example), but eventually will bite either party in the butt in time.

Just ask Rubbermaid how well things went when Wal-Mart had too much control.
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post #24 of 42
Quote:
Originally Posted by digitalclips View Post

Their goals in partnering with RIM were to prevent Apple from gaining "outsize influence in the market," the report said.
How did that work out for you AT&T? ROFL

 

Samsung is probably laughing at Apple the same way. How's Apple's supplier *diversification* strategy working out?

post #25 of 42

This is no surprise -- nor is it anything we wouldn't expect. AT&T wanted to keep most of the revenue and have a smart phone that they could "improve" for their carrier. Apple wanted to have a phone that acted with services married to the phone and control over features.

 

Apple won and AT&T still made money. They would have preferred however, that everyone have a service contract for an expensive brick -- so that's the dynamic that almost every TelCo is battling with.

post #26 of 42
Quote:
Originally Posted by massconn72 View Post

What a bunch of dirt bags AT&T must be. 

 

Quote:
Originally Posted by mstone View Post

Why? It is just business. First rule of investing is 'Diversify'.

 

ANY company that relies on one primary vendor or one primary customer is in s a dangerous place because they've lost control of their company's future. What AT&T did was a very cautionary effort.

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post #27 of 42
Quote:
Originally Posted by Shogun View Post

If my wife did the equivalent I'd be ticked off. Business doing it? Eh.

You should hire a PI and find out how much she making in her "business."

post #28 of 42
Quote:
Originally Posted by WelshDog View Post

Lordy we all get so tired of hearing that.  It's a lame excuse for bad behavior.

Geez  - you must have flunked out of business 101.  This is actually very appropriate, protective business practice - to do otherwise is to bury you head in the sand, which, now that you brought it up, is EXACTLY what RIM did (as well as Nokia also).  Their behavior is actually characterized in business parlance as "bad behavior".  Doing nothing, in the face of obvious competition, is the same as making the wrong competitive choices.  And, by the way, the term "Free Market" is not actually made up of dirty words - they actually describe natural human behavior in the business world. Anything else is just artificially constrained or controlled, and usually bound to have unintended consequences - mostly bad.  Give me Laissez Faire economics any day.


Edited by Bagman - 6/28/12 at 1:58pm
post #29 of 42

AT&T has every right to diversify their product offerings, contain their costs associated with the iPhone.  Its hardly a scumbag move and regardless all carriers sell a competing product that are for some better than an iPhone and for others are not comparable to an iPhone.  It comes down to what a user wants and what the carriers are willing to carry and sell.

 

RIM on the other hand failed to grasp the consumer market, failed to understand how much the end users demands to use the iPhone would impact the business market due to growing trend of BYOD.  RIM is simply becoming a Super Nova, end stage of a very bright tech company.  BOOM . . . they are gone.

post #30 of 42
Quote:
Originally Posted by GadgetCanada View Post

Mike Lazaridis had it wrong and Jim Balsillie had it right. Looks like Mike won and RIM as a company lost. Perfect example of the stupidity of having co-CEO's.

 

WTF?  How do read that out of what happened?  Where do you live ... Bizarro opposite land?   

 

If they had done what Mike wanted and focussed on a competitor to iPhone right away, they might have had a chance.  It was years of piddling around with stupid ideas like Balsillie's and not doing anything that caused the demise.  

 

They should have acted, immediately, and came up with an appropriate response to the iPhone. 

post #31 of 42
Quote:
Originally Posted by AppleInsider View Post
The company's own sales division reportedly forecast a coming shift in the smartphone market in 2010...
 

 

Really... 2010. When the iPhone 4 came out. Really?

 

My aged mother could have done that in 2009 when she got her first iPhone. My friend's dog was all over this in 2008 when it downloaded its first app...

 

Really... (Seth & Amy), Really????

post #32 of 42
Quote:
Originally Posted by mstone View Post

Why? It is just business. First rule of investing is 'Diversify'.

That and AT&T wanted "a better deal" than they were getting from Apple.

post #33 of 42
Quote:
Originally Posted by tooltalk View Post

 

Samsung is probably laughing at Apple the same way. How's Apple's supplier *diversification* strategy working out?


Probably quite well. Apple doesn't do much that is knee-jerk, it bides its time and strikes when it is ready. See what it has done to Google in Maps and search (by keeping it out of Siri's front-line sources). It took 3 years to get Maps to be good-enough to kick Google off the stock Maps app. Samsung will get its day. It takes years to invest in and build up the competitors (see Sharp and LG partnerships). When those are ready and TSMC are ready to make the A6 or A7, we'll see how much Samsung laughs.

 

Anyway, Samsung is doing very well copying Apple's every move... maybe they should make all their phones with Qualcomm chips (like MS want them to do for WP8!!).

post #34 of 42
Quote:
Originally Posted by jragosta View Post

So it was OK for Apple to talk to other carriers but not for AT&T to talk to other handset manufacturers (since Apple must have been talking with competitors before AT&T's exclusivity ran out or they wouldn't have been able to move as quickly when it ended)? That's some rather strange logic.
As long as there was no restriction in the agreement preventing them from talking to other manufacturers and as long as no confidential information was shared, there's absolutely nothing wrong with it. In fact, prudence makes talking to alternative suppliers obligatory.
Ridiculous story.

The only thing ridiculous is that AT&T would think it has to ask RiM to make a decent competitor as if the thought never crossed their mind.

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post #35 of 42

The Storm was probably the worst phone I ever had the displeasure of dealing with, issues and problems of nightmarish proportions, it was overhyped and probably did more to alienate RIM users than any other single thing.

 

Vodafone (who own 45% of Verizon) jointly developed it with RIM.

 

AT&T was probably doing this in response to Verizon, not wanting to be caught out if one of Verizon's strategies unseated the iPhone.

 

After the Storm's abysmal failure, Verizon hit on Droid before finally getting the iPhone.

 

Android "won", the rest is history.

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post #36 of 42
Quote:
Originally Posted by SolipsismX View Post

The only thing ridiculous is that AT&T would think it has to ask RiM to make a decent competitor as if the thought never crossed their mind.

Though given their current situation, it probably hadn't. lol.gif

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post #37 of 42
Quote:
Originally Posted by SolipsismX View Post

The only thing ridiculous is that AT&T would think it has to ask RiM to make a decent competitor as if the thought never crossed their mind.

Of the options available at the time, I'd think RIM would be a good pick given their presence in the Enterprise. Android was all-over-the-place, Nokia was on its laurels and MS.... Weren't they planning mock funerals for phones?
post #38 of 42

Once was Cingular,

  now AT&T

post #39 of 42

So, AT&T, how did that work out for ya?

post #40 of 42
Quote:
Originally Posted by RBR View Post

That and AT&T wanted "a better deal" than they were getting from Apple.

 

The grass is always greener... LOL

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