• How BlackBerry Blew it with Their Biggest Customer

    So I'm going to be away for a few weeks—after I post the news round-up later today you won't hear from me again until Monday, November 21st. As a parting gift I'd like to share an excerpt from a fantastic book I've just finished, Losing The Signal: The Spectacular Rise and Fall of BlackBerry. Whether or not it qualifies as a Halloween ghost story isn't for me to decide.

    I'll set the stage for you: The year is 2010, and a delegation of RIM executives is at Mobile World Congress to meet with Verizon, their biggest carrier partner. Their relationship by that point is already strained, and Verizon is doing quite well with the Moto Droid. Anyway, in preparation for the rollout of their new 4G network the carrier is meeting with OEMs to see what 4G-capable hardware they have available.

    To borrow a hackneyed phrase from BuzzFeed, you won't believe what happens next!

    Verizon Wireless’s marketing vice president, Jeff Dietel, ushered Lazaridis, McLennan, RIM handset boss Thorsten Heins, and the CEO’s chief technology adviser, radio engineer Mark Pecen, into a hotel meeting room where a half dozen Verizon counterparts awaited them.

    Lazaridis had no 4G devices to show them. Instead, he told the Verizon team he didn’t think the carrier could pull off its 4G plans. It would be difficult to do the network upgrade based on its existing technology, he said, because that would require its network technology supplier Qualcomm to make a heavy investment of its own. “My message was that I thought that 4G was amazing,” says Lazaridis. “I thought 4G was going to happen. I just didn’t believe there was a need for us to build 4G devices to work [with Verizon’s existing technology] ever. I thought when they go to [4G] they would phase out” their existing technology standard, known as CDMA, in favor of an updated technology better suited to 4G. Lazaridis had long harbored doubts about CDMA and couldn’t foresee how RIM could build a device for such a network. RIM had no existing products large enough to fit the chipsets and antennae required for 4G. It would have to make much bigger devices, and they would burn up batteries quickly and cost $100 more each to produce. “It was an ugly solution. It was big. Lot of parts,” says Lazaridis. RIM had been testing a 4G phone in its lab, but Lazaridis didn’t like its battery performance and had the project stopped.

    As Lazaridis and his network specialist Mark Pecen spoke, McLennan could see the Verizon team getting impatient. Lazaridis was not telling the carrier team what they wanted to hear.
    That's right... Verizon wanted a 4G BlackBerry and instead got a lecture about why a 4G BlackBerry was a bad idea. Over the course of the next year the carrier would realign its massive marketing budget away from BlackBerry and more towards 4G products—and eventually, the iPhone.

    That's but a sample of the many mobile insights in the book, assembled from hours of interviews with the founders of RIM and other key company executives. If you're a student of smartphone history I can't recommend it highly enough.

    Losing The Signal: The Spectacular Rise and Fall of BlackBerry on Amazon Canada / Amazon USA

    This article was originally published in forum thread: How BlackBerry Blew it with Their Biggest Customer started by acurrie View original post
    Comments 6 Comments
    1. Mr.Peppermint's Avatar
      Mr.Peppermint -
      Funny... in Canada when Bell & Telus took that route everyone up here cheered
      But in the USA Verizon thought they were all idiots and went their own way

      Curious if OP thinks Verizon or Bell/Telus is better today?
    1. kkritsilas's Avatar
      kkritsilas -
      Doesn't matter who is better off today, Verizon or Bell/Telus. They compete in different markets, have vastly different (in terms of number of subscribers) customer bases, and are vastly different in scale. Take into account this: Verizon by itself has more than 3 times the number of subscribers than all of the Canadian carriers, COMBINED. Verizon could buy all of the Canadian carriers, and not even have an issue financing the deal.

      Back to the main story, the moral is, Lazaridis should have known better. When somebody like Verizon asks you what you have in terms of 4G devices,they aren't dreaming; the decision to upgrade their network to 4G has already been made, financing is in place, and implementation plans are already being made if not completed. Then Lazaridis and company show up, and tell them that this is a bad idea. Really? Do you think that all that planning, the decisions that have been made at high levels by some very knowledgeable RF and network engineers, probably after years of study and research, are going to be overturned by the folks at Blackberry? Especially when other vendors (Apple and others) could offer exactly what Verizon wanted in handsets? No wonder Blackberry (now RIM) is in the state it is in right now. Which marketing technique involves telling the customer that they are wrong to do what they full intend and are committed to doing?
    1. NotABiot's Avatar
      NotABiot -
      I guess Blackberry wanted to provide 20th century phones to a 21st century cell provider.
    1. rambo47's Avatar
      rambo47 -
      Interesting how the iPhone took over at Verizon, and most other carriers. Initially Verizon was Apple's first choice for an exclusive carrier deal on the original iPhone. Verizon balked at Jobs' draconian terms and Apple went with their Plan B carrier, AT&T. That would have been the opportunity for BlackBerry to get back in Verizon's good graces with a 4G device, perhaps exclusive to Verizon. Something for Verizon to use to fight the iPhone tidal wave. It probably wouldn't have kept the iPhone from eating everybody's lunch, but it may have slowed BlackBerry's slide and bought them more time. Maybe something would have come out of that time. Maybe Verizon users would have rallied around a superior BlackBerry device exclusive to their carrier. BlackBerry was still at a high point in popularity, was still the default device for business/corporate users. That's a lot of ifs/maybes, but who knows?
    1. aiharkness's Avatar
      aiharkness -
      Quote Originally Posted by NotABiot View Post
      I guess Blackberry wanted to provide 20th century phones to a 21st century cell provider.
      The book is good, by the way. And I think this remark is closest to the truth.

      Lazaridis sounds like he was conservative on everything. He expected data to be costly and bandwidth to be spare and in short supply forever, for example. Plain and simple, RIM's assumptions and beliefs were wrong, and that was their doom.

      The other thing, or another thing, it sounds like BlackBerry didn't fight the carriers, or didn't know how. I gather RIM wanted to do a full browser, wanted to do an app store, but partly assumed it couldn't be done (full browser) and didn't want to antagonize its partners (the carriers). Then comes along Apple (Jobs) negotiating huge deal with a carrier and breaking all the rules that Lazaridis and RIM either assumed or didn't know how to break themselves.

      As a long time BlackBerry enthusiast, it hurts, but it is what it is.
    1. AlephNull's Avatar
      AlephNull -
      As successful competitors say, the wise businessman will obsolete himself. If he doesn't, someone else will come along and do it for him.