“Late last year, Research In Motion Ltd. chief executive officer Thorsten Heins sat down with the board of directors at the company’s Waterloo, Ont., headquarters to review plans for the launch of a new phone [Z10] designed to turn around the company’s fortunes,” Sean Silcoff, Jacquie Mcnish and Steve Ladurantaye reports for The Globe and Mail.
MacDailyNews Take:
Waterloo, indeed. – MacDailyNews, June 21, 2011
“Once the giant of the smartphone business, RIM, which was renamed BlackBerry Ltd. in the summer, is now on its knees. The company reported a $965-million (U.S.) fiscal second-quarter loss Friday, primarily because of a massive writedown of Z10 phones that sit, unsold and unwanted, about eight months after they first hit the market. The company is cutting 4,500 jobs, 40 per cent of its work force, in a desperate bid to bring costs in line with plummeting revenue,” Silcoff, Mcnish and Ladurantaye reports. “Investors, who have lived through the destruction of more than $75-billion of the company’s market value over the past five years, are still wondering how BlackBerry managed to blow its runaway lead and became a bit player in the smartphone market it invented.”
“An investigation by The Globe and Mail, which included interviews with two dozen past and present company insiders, exposes a series of deep rifts at the executive and boardroom levels,” Silcoff, Mcnish and Ladurantaye reports. “Those divisions hurt the company’s ability to develop products just as it faced its greatest challenge from more nimble and creative rivals – and contributed to the downfall of Canada’s biggest technology company.”
To Mr. Lazaridis, a life-long tinkerer who had built an oscilloscope and computer while in high school, the iPhone was a device that broke all the rules. The operating system alone took up 700 megabytes of memory, and the device used two processors. The entire BlackBerry ran on one processor and used 32 MB. Unlike the BlackBerry, the iPhone had a fully Internet-capable browser. That meant it would strain the networks of wireless companies like AT&T Inc., something those carriers hadn’t previously allowed. RIM by contrast used a rudimentary browser that limited data usage.
“I said, ‘How did they get AT&T to allow [that]?’ Mr. Lazaridis recalled in the interview at his Waterloo office. “ ‘It’s going to collapse the network.’ And in fact, some time later it did.”
Publicly, Mr. Lazaridis and Mr. Balsillie belittled the iPhone and its shortcomings, including its short battery life, weaker security and initial lack of e-mail. That earned them a reputation for being cocky and, eventually, out of touch. “That’s marketing,” Mr. Lazaridis explained. “You position your strengths against their weaknesses.”
Internally, he had a very different message. “If that thing catches on, we’re competing with a Mac, not a Nokia,” he recalled telling his staff.
Tons more in the full sordid story – highly recommended – here.
MacDailyNews Take:
RIM. Dead Company Walking. – MacDailyNews, August 5, 2010
[Thanks to MacDailyNews Reader “Edward W.” for the heads up.]