New book tells the story of how the iPhone crippled BlackBerry


There is a new book coming out later this month entitled “Losing the Signal,” and it explores the rise and fall of BlackBerry. The Canadian-based handset maker that once sat atop the smartphone market has spent the last two years fighting off bankruptcy.

On Friday The Wall Street Journal published an interesting excerpt from the book, which tells the story of the iPhone’s debut in 2007 and how it impacted folks inside BlackBerry. It’s clear that they had no idea it was coming, or what they could do to respond.

The story starts off with co-founder and then co-CEO Mike Lazaridis at home on his treadmill watching Steve Jobs unveil Apple’s smartphone. “How’d they do that?” The next day at the office, he grabbed his co-CEO Jim Balsillie and pulled him aside.

“Jim, I want you to watch this,” he said, pointing to a webcast of the iPhone unveiling. “They put a full Web browser on that thing. The carriers aren’t letting us put a full browser on our products.”

Mr. Balsillie’s first thought was RIM was losing AT&T as a customer. “Apple’s got a better deal,” Mr. Balsillie said. “We were never allowed that. The U.S. market is going to be tougher.”

“These guys are really, really good,” Mr. Lazaridis replied. “This is different.”

“It’s OK—we’ll be fine,” Mr. Balsillie responded.

The executives didn’t think much more about the iPhone after that, until word got out that Apple had sold a million handsets in its first 3 months. Realizing the threat of the viral smartphone and AT&T’s exclusivity, Verizon and BlackBerry decided to join forces.

Their answer was the Storm, an all-touchscreen device that was little more than a prototype in 2007. Verizon wanted it ready by 2008, and in November of that year they launched the handset. It sold well initially, but it was clear the product had been rushed.

Storm’s success was fleeting. By the time Mr. Balsillie was summoned to Verizon’s Basking Ridge, N.J., headquarters in the spring of 2009 to review the carrier’s sales data, RIM’s senior executives knew Storm was a wipeout. Virtually every one of the 1 million Storm phones shipped in 2008 needed replacing, Verizon’s chief marketing officer, John Stratton, told Mr. Balsillie. Many of the replacements were being returned as well. Storm was a complete failure, and Mr. Stratton wanted RIM to pay.

The whole debacle ended up costing BlackBerry (then-RIM) over $100 million, and left many employees embarrassed of what was essentially the company’s first major misstep. Even worse, it left the executive team with an uncertain feeling of “what now?”

You can draw parallels from BlackBerry’s story to other former smartphone leaders who woefully underestimated the impact of the iPhone. Ex-Palm CEO Ed Colligan famously said, “PC guys are not going to just figure this out. They’re not going to just walk in.”

If you’re interested, you can buy the book “Losing the Signal” on Amazon here, or iBooks here.

Source: The Wall Street Journal