New book says BlackBerry ignored iPhone threat because it misunderstood market

Posted:
in iPhone edited June 2015
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.
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Comments

  • Reply 1 of 108
    As a denouement to the mid-2000s upheaval wrought on the cell-phone market by the iPhone, this book may have historical value, but the RIM co-CEOs have long since been shown to be fools. Better just to forget about them now, except for use as a case study on what not to do in the face of a misunderstood existential threat to your business. Also, hindsight is 20/20.
  • Reply 2 of 108
    melgrossmelgross Posts: 33,035member
    Even about a year and a half ago, Blackberry was still promoting high network efficiency, even though that hasn't been an issue for years. That efficiency hammers the Blackberry on high bandwidth networks such as most all organizations have now, because it doesn't use that bandwidth properly. Therefore, high bandwidth files operate slowly.

    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.
  • Reply 3 of 108
    kkapoorkkapoor Posts: 22member

    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.

  • Reply 4 of 108
    mieswallmieswall Posts: 83member
    really?!
  • Reply 5 of 108
    radarthekatradarthekat Posts: 3,395moderator

    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.

  • Reply 6 of 108
    john.bjohn.b Posts: 2,740member
    Quote:

    Originally Posted by AppleInsider View Post



    RIM executives allegedly did not fully understand the iPhone or why people were buying it...

     

    No shit Sherlock!  <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />

  • Reply 7 of 108
    geekmeegeekmee Posts: 474member
    RIM had a false understanding of their success in the first place... That's why they didn't understand the iPhone's threat. Apple essentially showed them...'Your baby is ugly, let me prove it to you!'
  • Reply 8 of 108
    jsmithjsmith Posts: 16member

    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.

  • Reply 9 of 108
    focherfocher Posts: 685member

    The real truth is that there was nothing RIM could do when Apple decided to build a smartphone. 

  • Reply 10 of 108
    bkerkaybkerkay Posts: 139member
    Quote:

    Originally Posted by JSmith View Post

     

    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. 

  • Reply 11 of 108
    leighrleighr Posts: 219member
    This really does show the importance of being a market leader vs a market follower. Sometimes Apple's incessant habit of leaving behind older, popular technology (think floppy drives, ethernet ports, DVD/CD drives) while it's still at it's peak, can be frustrating, but I can see the importance of leading the market ahead rather than being left behind in the dust.
  • Reply 12 of 108
    vfx2k4vfx2k4 Posts: 43member

    Darwin: the thing that does not adapt to its changing environment goes extinct. 

  • Reply 13 of 108
    dasanman69dasanman69 Posts: 13,001member
    focher wrote: »
    The real truth is that there was nothing RIM could do when Apple decided to build a smartphone. 

    Agreed, but they could've been in Android's position (in high end devices) at #2 instead of struggling to stay alive.
  • Reply 14 of 108
    spicedspiced Posts: 94member
    SJ mentioned Apple just need to command a 1% of that market when introducing the iPhone (something like that, please correct if I'm wrong) such humble and realistic comment back then that all the others make fun of! Now who has the last laugh....
  • Reply 15 of 108
    ecatsecats Posts: 272member
    "because we can't be who we used to be anymore, which sucked"

    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.
  • Reply 16 of 108
    shenshen Posts: 434member
    I wonder if any watch company execs will read this...
  • Reply 17 of 108
    badmonkbadmonk Posts: 993member
    once again Apple was underestimated...wash rinse repeat...will see it again and again...and before RIM, it was Ballmer/MSFT.

    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)...
  • Reply 18 of 108
    dachardachar Posts: 330member
    Another error Blackberry made was increase their business licensing fees. They should have cut them and given the software away.
  • Reply 19 of 108
    jd_in_sbjd_in_sb Posts: 1,600member
    The Storm is proof that they did NOT ignore the iPhone threat. The took it very seriously. RIM was just incapable of creating a competing product.
  • Reply 20 of 108
    monstrositymonstrosity Posts: 2,234member

    Lets be realistic, there was nothing Blackberry or any other company could have done about combatting Apple. 

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