How BlackBerry got blindsided by the iPhone

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Apple in 2007 introduced the world to the iPhone, and the smartphone industry would never be the same. In an instant, Apple's take on what a phone should look like and operate became the de-facto standard among all manufacturers hoping to compete in the burgeoning smartphone market.

And while some companies, like Samsung, ably adjusted their products accordingly, others, like BlackBerry, were completely blindsided by the new consumer-oriented smartphone market that had been created.

It almost seems like ages ago, but BlackBerry devices in the early-to-mid 2000's were incredibly popular and represented the gold standard among smartphones. Yet once the iPhone was introduced, BlackBerry's fall from grace wasn't too far behind.

This dynamic is the topic of a new book titled Losing the Signal: The Untold Story Behind the Extraordinary Rise and Spectacular Fall of BlackBerry. Penned by Jacquie McNish and Sean Silcoff, the book takes a look at both the rise and fall of BlackBerry, the latter of which was catalyzed by Apple's entrance into the smartphone market.

Slated for release this week, the Wall Street Journal recently posted a few interesting excerpts from the book which specifically highlight the events which led BlackBerry (which was then called RIM) to start circling the drain.

Of particular interest is that one of the iPhone's key selling points -- a full web browser -- was something that the carriers had up until that point not allowed BlackBerry to implement themselves, perhaps due to concerns regarding network congestion.

Even more fascinating is that BlackBerry executives themselves were simply ignorant of the iPhone's potential in the first place, even after Steve Jobs' iconic introduction.

RIM's chiefs didn't give much additional thought to Apple's iPhone for months. "It wasn't a threat to RIM's core business," says Mr. Lazaridis's top lieutenant, Larry Conlee. "It wasn't secure. It had rapid battery drain and a lousy [digital] keyboard."

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."

In the wake of the iPhone's success, then an AT&T exclusive, Verizon scrambled to come up with a similar product and pressured BlackBerry to come up with something, anything. The result was the BlackBerry Storm, a multi-touch smartphone where the entire screen was itself a large button, thereby providing haptic feedback while typing.

The rollout, however, did not go as planned.

Though heavily promoted by Verizon, the BlackBerry Storm was rushed to market with software that wasn't quite fully baked, something that BlackBerry's engineers were all to keenly aware of.

The browser was painfully slow, the clickable screen didn't respond well in the corners and the device often froze and reset. Like most tech companies launching a glitchy product, RIM played for time. Verizon stoked sales with heavy subsidies, while RIM's engineers raced to introduce software upgrades to eliminate Storm's many bugs. "It was the best-selling initial product we ever had," says Mr. Lazaridis, with 1 million devices sold in the first two months. "We couldn't meet demand."

Of course, the device was so popular in part because it was marketed so heavily and was often pushed onto consumers as part of 'buy one get one free' deals. So while the product was in fact flying off of the shelf at first, consumers began returning them en masse on account of the aforementioned hardware and software glitches.

If the excerpts that have been published thus far are any indication, this book should certainly provide a tremendous amount of insight into how quickly a tech company at the top of its game can descend into irrelevance when faced with a rapidly changing industry dynamic.

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