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.
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.
Comments
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.
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.
RIM executives allegedly did not fully understand the iPhone or why people were buying it...
No shit Sherlock!
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Then there was whichever of the two CEOs wasting his time thinking about buying a sports team. On top of any other lessons, number one is keep your eye on the ball ALL THE TIME.
The real truth is that there was nothing RIM could do when Apple decided to build a smartphone.
Then there was whichever of the two CEOs wasting his time thinking about buying a sports team. On top of any other lessons, number one is keep your eye on the ball ALL THE TIME.
...and to skate where the puck will be.
Darwin: the thing that does not adapt to its changing environment goes extinct.
Agreed, but they could've been in Android's position (in high end devices) at #2 instead of struggling to stay alive.
This is a common line I hear from companies that are "disrupted", but the truth is it really says, "we were complacent", "we charged too much for too little", "we were so slow that a competitor could develop a whole product from scratch quicker than we could enhance our existing line up."
It's actually a pretty disgusting thing, because it means that they were happily charging companies top dollar while not bothering to invest time in actually improving their product.
People jumped ship because the blackberry interface sucked badly.
wall street, the watch industry and cable companies are next...i for one will enjoy the show...
too bad Samsung and Google will weather it (for now)...
Lets be realistic, there was nothing Blackberry or any other company could have done about combatting Apple.