The fall of the BlackBerry titans

Strategic blunders, reckless pride and bad luck unravelled it all

by Chris Sorensen, Cathy Gulli, and Richard Warnica

The fall of the BlackBerry titans

Nathan Denette/CP

When Jim Balsillie and Mike Lazaridis, the former co-CEOs of BlackBerry-maker Research in Motion Ltd., cut their salaries to $1 last December, and asked investors for patience and confidence, most took that to mean the long-time partners were simply stepping up their efforts to halt RIM’s painful slide, and intended to stick around for some time. “We’re more committed than ever,” Balsillie said.

In reality, RIM was already a company in the midst of the biggest shakeup in its relatively brief but spectacular history. While they tried to reassure investors, the board of directors—including co-chairs Balsillie and Lazaridis—were already coming to some painful conclusions about what had been going wrong and were already considering a change of leadership at the very top.

“Mike and Jim” may have helped pioneer a global industry that’s expected to be worth US$150 billion by 2014, but in an age of iPhones and increasingly ubiquitous devices running Google’s Android software, investors had run out of patience, and pressure was mounting on the board.

Maclean’s interviewed numerous former and current employees and other insiders, who together painted a picture of a company that, at its highest levels, had finally come to a realization of the mess it was in and was searching for a place to lay the blame—for the missed opportunities, the flubbed business calls, and even the seemingly endless string of just plain bad luck.

Something drastic needed to be done. With the stock down 75 per cent over the past year, and showing no signs of stopping, a search to identify a new CEO was well under way late last fall. Before long, in fact, Balsillie and Lazaridis—with the approval of the board—had themselves identified Thorsten Heins, a relatively unknown insider and the company’s former chief operating officer.

It would take another month before the bombshell decision was revealed to the public during a hastily arranged meeting last Sunday. In the reorganization, Balsillie and Lazaridis, who are also among RIM’s biggest shareholders, also agreed to step down as the board’s co-chairs in an effort to blunt concerns about corporate governance issues, although Balsillie will remain a director and Lazaridis a vice-chair of the company he founded in 1984.

The changes came as a shock even to current and former employees, many of whom had believed that Balsillie and Lazaridis would never let go of the company they painstakingly built into a global powerhouse. “The likelihood that Mike and Jim are going to step down is somewhere between zero and zero,” said one former executive just a few days before the news was announced. “You’re going to have to pry them out with a serious crowbar.”

But the last six months had dramatically changed everything, even the famously unshakable resolve of Balsillie and Lazaridis. The launch of RIM’s PlayBook tablet, a product meant to show off its next-generation BB10 software, had proved to be a disaster. Not just for sales, but for the internal dynamics of the company itself. In a bid to try to inject energy and a sense of purpose into the increasingly bureaucratic company, executives had split development and engineering teams into two groups: those who would work on the new BB10 platform and those who would continue to service existing devices. The move sowed jealousy and anger among many employees, say insiders. Some protested. Some quit. Others were let go during layoffs last summer.

Wireless carriers, long viewed by Balsillie and Lazaridis as RIM’s key partners, were also increasingly unhappy with the company and its leadership. The PlayBook featured a system to link it to BlackBerry phones, negating the need for people to buy extra data plans. After years of being forced to hand over a significant chunk of their subscribers’ monthly bills for access to the BlackBerry email network, some carriers decided to push back by taking a pass on the PlayBook, while others “were more than happy to look at alternatives” to the BlackBerry, according to a former executive.

Then came a massive service outage that lasted more than three days and spanned five continents. RIM initially scrambled to reassure customers it had fixed the problem, only to discover that email users in a different region of the world were being affected the following day. The debacle forced a rare public apology from Lazaridis and only raised more suspicion that RIM’s leadership had lost its way.

But the final straw was RIM’s admission in December that its next generation of BB10-powered “superphones” would be delayed until late 2012, leaving RIM with relatively little for consumers to get excited about for six or more long months—an eternity in the fast-moving tech world. Officially blamed on a lack of available chipsets, many analysts openly speculated that RIM simply didn’t have a market-ready device, putting even more pressure on a board that was already being accused of sitting on its hands.

While delays haunted RIM, another failure was coming into harsh focus: RIM’s lack of expertise in the field of consumer electronics. No one doubted the creative genius of Balsillie and Lazaridis, but in a rapidly changing market, both seemed to have stopped listening to what really mattered: what consumers were saying they wanted. The board, which was largely stacked with accountant types, moved to correct this widely acknowledged problem. Claudia Kotchka, who spent 31 years at Proctor & Gamble, joined the board last summer. But it was hardly enough.

Beginning in September, a small Toronto merchant bank with a history of trying to force changes at big companies jumped into the fray. Vic Alboini, the president of Jaguar Financial, began calling for radical changes, ranging from a management restructuring to splitting up the company and selling off the pieces. Suddenly, analysts and investors weren’t just asking about product delays and sinking stock prices, but openly speculating about who might be interested in buying what was once Canada’s brightest tech star.

Publicly, everyone is saying Balsillie and Lazaridis woke up to the fact that they needed to go in order to save the company they loved. Ultimately, most agree that it was the call of the two men themselves, not the work of new board member Prem Watsa or the new chair Barbara Stymiest, to step down. (RIM and its executives declined several requests to comment for this story.) But there is little doubt that there was tremendous pressure on the CEOs to boost performance, product development and reliability, which ultimately culminated in the two receiving more than a little encouragement from the board and frustrated shareholders to choose this path. “The reality is, in my view, the board pushed these two people out and tried to give them a graceful exit,” Alboini says. “Let’s face it, they are Canadian icons. But they lost their way.”

It is a lamentable end to what has been one of the most riveting tales in Canadian business history—a story of two men whose ambition and tenacity built a company that was, for a time, the envy of the world.

Mike and Jim—Jim and Mike—they were, by all accounts, and for the longest time, a professional match made in heaven, in which complementary traits merge to create a perfect, seemingly unstoppable whole. “In so many ways they were different. Mike was a technical guy. Jim was the business guy. Jim [plays] golf. Mike reads science fiction stories,” says Howard Burton, who has known them both for more than a decade. And yet, those personal differences evaporated when it came to work. “There was a real respect. They both knew that they were both essential to the success of the company. They needed each other.”

In every partnership, there is an initiator, the one of the two who makes the first move toward getting together, who sees the future and all the promise that it holds. In this case, that person was Mihal Lazaridis, born in Istanbul in 1961 to Greek parents. (The family moved to Windsor, Ont., a few years later amid Christian persecution in Turkey). His pursuit of success started early: by the time he turned 12, Lazaridis had already won an award for reading every science book stashed in the local library. Soon after, he and his childhood chum Doug Fregin nabbed first prize at a science fair for creating a parabolic reflector that tracked the sun. And, as is now entrenched in the oft-recited Lazaridis lore, in high school he improved a finicky buzzer that he and his peers used to play Reach for the Top; then he sold new buzzers to other schools for $600 each. That money helped pay for his first year at the University of Waterloo in 1979.

Lazaridis was attracted to Waterloo because of its co-op program, which encouraged real-world, hands-on ingenuity. “This was an engineering school. This guy built a computer, that guy built a radio control system, everybody built something or at least had an interest in building something,” recalled Lazaridis years later. “Here the popular students were the ones that knew how to the run the labs.”

In this world, Lazaridis wasn’t just a tech boy-genius, he was a bold and daring entrepreneur-in-waiting. His breakout moment arrived in 1984, during his last year of university. Along with Fregin, with whom he would maintain a lifelong friendship and professional association, Lazaridis built a computer display system called Budgie that allowed users to write words onto their TV screens. That March, using $15,000 from his parents and a student loan from the Ontario government, the pair incorporated Research In Motion so they could start selling the product. (Lazaridis had hoped to call the company Paradigm Research, but that name was taken; he settled for RIM after hearing a football play referred to as “poetry in motion.”)

But Budgie never really took off. Sales were dismal. Not one to accept defeat, Lazaridis used RIM’s new-found exposure to land a $600,000 contract with Computer Advertising Signs to design and build LED information boards for General Motors plants. A year later, the technology was snapped up by Corman Manufacturing, which provided RIM with a consistent revenue stream. By 1990, annual revenue had ballooned to over $1 million.

Business was good. But it could be better, thought Lazaridis. Something was missing—or rather, someone. For all the engineering acumen he had shored up at RIM, there was a dearth of sales and marketing brilliance. Lazaridis was intrigued by a bright young executive working for Sutherland-Schultz, which had attempted a RIM takeover in the early 1990s. “When he walked in the door, you could just tell, he presented a unique personality,” Lazaridis recalled of that initial meeting with Jim Balsillie. “The thought that came to my mind was, ‘You want this person on your team.’ ”

In Balsillie, the son of an electronics technician from Peterborough, Ont., he got a partner whose fervour for closing the deal matched Lazaridis’s faith in the product. That year, Lazaridis persuaded the young executive to sign on at RIM for a 60 per cent pay cut, and the privilege of remortgaging his home so he could invest $250,000 in the company. It was, in the words of one business journalist, “a perfect marriage”—two young men with unswerving belief in their capacity to change the world.

Balsillie has long understood that a salesman’s real ware is himself. As a 10-year-old, he sold Christmas cards door-to-door in Peterborough, amping up his adorableness and inviting homemakers to “beat the lineups at Christmas.” The twinkling gaze and open-mouthed cackle never went away. Yet Balsillie would later couple them with a relentless, at times frenetic determination. Housemates at Trinity College, where he lived while attending the University of Toronto, recall Balsillie honing his backgammon game to the point where he could beat anyone in the residence. After a few years working as a chartered accountant, he resolved to one day lead his own business and enrolled in Harvard Business School.

It was a key turn in what Balsillie now refers to as his “personal narrative”—a kind of self-imagined archetype he believes every budding entrepreneur should conceive. “I’m the quant jock from Peterborough who never quits,” he told business students at Wilfrid Laurier University two years ago. “That’s how I see myself; that’s my personal narrative.” It sounds affected, but it worked. “Quant jocks” (a term for those uncommonly skilled at applying mathematical modelling to business) were an attractive commodity as the tech bubble was germinating in the early 1990s.

So began the greatest tech play in modern Canadian history. In most accounts, the Lazaridis-Balsillie symbiosis is glibly summarized: the brooding inventor and the charming front man, each doing his bit to get their business up and running. “My job is to get the money; Mike’s job is to spend it,” Balsillie would later say. But that understated each man’s ingenuity and stamina. For Lazaridis, the path from those car factory pixel boards to the launch of the first BlackBerry ran through a maze of technical and structural obstacles, not least the leap to radio frequency communication. For Balsillie, life at RIM was a daily scramble to keep investment dollars flowing while persuading skeptical consumers to try the company’s products.

Even now, with the pair in executive dry-dock, the scale of their accomplishment impresses. As “co-CEO” in charge of R & D and production, Lazaridis developed the portable modem that would allow communication between hand-held devices. It would prove the seed of the mobile revolution. Balsillie, meanwhile, showed uncommon skill at surfing the 1990s dot-com mania, drawing orders and raising money RIM would parlay into success long after the tech bubble burst. The two scored an enormous victory in 1997, when U.S. telecom giant BellSouth ordered $70-million worth of RIM’s Inter@ctive 950 pagers—the first such devices with full email capability. Famously, Balsillie was involved in a minor car accident during those negotiations and kept up the talks over his cellphone even as he spoke with police officers at the scene. One month later, reassured by BellSouth’s order, Intel purchased $4.2-million worth of RIM shares. The little company from Waterloo was officially in the big leagues.

From that point, RIM went on the sort of magic carpet ride that gives its survivors an inflated sense of their destiny. Over the next two years, the company’s share value soared from $7.25 to $60 (the executive team celebrated by hiring the likes of the Barenaked Ladies, the Tragically Hip and even Aerosmith to play at staff parties), only to plummet back to $8 following the dot-com crash.

Still, RIM was doubling its BlackBerry customer base every year, hitting a million subscribers in 2004, shortly after Oprah Winfrey added the 7100 model to her list of “favourite things” (“It’s wonderful,” she gushed. “It has literally changed my life”). Within two years, four million people had signed up for subscriptions, and by 2008—the year Barack Obama revealed he carried not one but two BlackBerries—RIM had 20 million subscribers worldwide.

So the dynamic duo had prevailed. Through technical glitches, the launch of competing devices and a bitter patent dispute that cost $612 million to settle, they had ridden the peaks and troughs to build the most valuable company in Canada. In June 2008, RIM stock price peaked at $148, and the company’s market capitalization stood at $84 billion. And it all went downhill from there.

What went wrong will no doubt fill the hours of business school lectures for years to come. The product delays; the failed launches; the crippling service disruptions that made headlines around the world—all may have been causes of RIM’s decline, or they may have been symptoms. For now, it seems simplest to frame events in Balsillie’s own terms: at some point, both men’s personal narratives took a turn.

In Lazaridis’s case, it was a journey back to his youthful wonder at obscure calculations, formulations, algorithms and permutations—things he believes can solve all problems, and even reveal the future. Throughout RIM, at the insistence of Lazaridis, employees have internalized “a belief in numbers, belief in mathematics,” he once explained during an interview. “The bottom line is: physics rules. In a high-tech environment, if you don’t understand the physics of your particular industry or technology, and you don’t understand the limits imposed by those physics, it’s really at your peril.”

So it was that in 1999, just as RIM was reaching its zenith, Lazaridis launched an organization devoted to scientific discovery, the Perimeter Institute, based in Waterloo. He has since funnelled more than $100 million into the research agency. From the start, “he was viewed as the patron saint of theoretical physics,” says Howard Burton, the founding executive director until 2007. There might have been times when his acute involvement at the Perimeter Institute could have been a distraction from RIM, but in the eyes of Lazaridis there was always the chance for each organization to inspire the other. “I think he had a natural tendency to sort of group all things associated with him as his,” recalls Burton. But, of course, “there are times when the success or failure of a research institution should have absolutely nothing to do with the stock price of a gadget company.”

Balsillie, meanwhile, became preoccupied by matters no less grand, or meaningful to his legacy. In February 2001, he convened a meeting of influential thinkers at his cottage on Georgian Bay to discuss constructive uses of—in his words—the “stupid amount of money” he and Lazaridis were making. Paul Heinbecker, Canada’s former ambassador to the UN, was there. So were the presidents of Waterloo and Wilfrid Laurier universities. “What kind of centre should I have?” he reportedly asked his guests, and the blue-skying began. Later, Balsillie floated his own idea: an institute dedicated to adapting governance models to the rapidly globalizing economy. Balsillie initially donated $20 million, plus $4.5 million to acquire an old warehouse in Waterloo in which to headquarter his Centre for International Governance Innovation. It is a “hybrid think-and-do tank,” he said, “with ambitions to help remake the world.” But the institute represented just one prong of his public foray. Three years later, Balsillie sent a jolt through the hockey world by offering to buy the Pittsburgh Penguins—a deal that would have fused his love of business with his passion for hockey. It was the first of three doomed attempts to bring an NHL team back to Canada against the league’s wishes (the Penguins deal fell through amid accusations that Balsillie secretly plotted to move the team to southern Ontario). His odyssey led through Nashville, where a deal died amid similar recrimination, and ended in Phoenix, where a ferocious court battle for control of the Coyotes pitted him against the NHL’s unloved commissioner, Gary Bettman.

Without doubt, these gambits burnished Balsillie’s public image—the institute because it suggested hidden depths; the NHL offers because it appealed to Canadian patriotism.

But was it good for business? It didn’t escape analysts that Balsillie was chasing hockey teams in the summer of 2007 while Apple was debuting its iPhone—the device that would ultimately topple RIM from the zenith of the smartphone mountain. The court proceedings in Arizona, meanwhile, raised questions about Balsillie’s character. “He’s untrustworthy. He’s deceiving. He’s arrogant,” said Craig Leipold, the former owner of the Nashville Predators, in a scorching deposition. “When there is someone that you have dealt with and that has lied to you continually, that has deceived you—knowing that he was going to deceive you at the end—that is a pretty good reason to dislike him. Yes, it is true. I do dislike the man.”

To John Pliniussen, a business professor at Queen’s University, the exchanges spoke to an unknown side of RIM’s leadership. “Up to that point, I’d called [Balsillie and Lazaridis] stealth executives,” he said from his home in Kingston. “We didn’t get any insight into their personalities, so most of us assumed they were sort of staid. When Balsillie got into the sports arena, we got a glimpse of personality and the reaction was, ‘Omigosh, he’s a fiend!’ ”

Fiend or no, Balsillie and Lazaridis had by that point earned a reputation for doing things their way, so much so that some now wonder if they were operating in a bubble as the seeds of their future problems were being sown. When the iPhone debuted, the pair were publicly dismissive. Even as analysts were predicting the device would transform the consumer smartphone market, Balsillie was calling it “one more entrant into an already busy space.” Lazaridis, meanwhile, dismissed the phone in an interview with the Guardian. “How much presence does Apple have in business?” he asked. “It’s vanishingly small.” Even last spring, with the problems in the company growing clearer, Lazaridis gave a rare interview to the New York Times. He seemed utterly baffled—not by RIM’s problems, but by the idea that people didn’t recognize how truly great a company it was. “Why is it that people don’t appreciate our profits? Why is it that people don’t appreciate our growth? Why is it that people don’t appreciate the fact that we spent the last four years going global?” he asked. “I don’t fully understand why there’s this negative sentiment, and I just don’t have the time to battle it. Because in the end, what I’ve learned is you’ve just got to prove it over and over and over.”

Now the task of picking up the pieces falls to Thorsten Heins, 54, a man that few people outside of the company had even heard of before this week. And he must turn around RIM while facing all the same challenges and obstacles that had flummoxed his two predecessors. Described by former employees as someone who shares some personality traits with Lazaridis, but “couldn’t be more different than Jim,” Heins arrived at RIM in 2007 after working at Germany’s Siemens AG and was promoted to chief operating officer of product engineering last summer, giving him oversight of all hardware and software at RIM, in addition to sales.

On the positive side, Heins is taking over a company that remains profitable with nearly $1 billion of cash on its balance sheet. But the needle isn’t moving in the right direction. In December, RIM reported sales of US$5.2 billion in its fiscal third recent quarter, a six per cent drop from a year earlier, and warned that sales and profits will be squeezed in the fourth quarter, which is scheduled to be reported in late March.

The BlackBerry once dominated the North American market for smartphones, boasting more than a 50 per cent share of the market. But RIM’s position has steadily slipped and now sits just under 15 per cent in the United States, according to the most recent numbers from market research firm Neilsen. By contrast, Apple’s share of the U.S. market is now at 30 per cent while phones running on Google’s Android software now command more than 46 per cent of U.S. smartphone users.

While the BlackBerry still sells briskly in several emerging markets where wireless networks are less capable of handling data-hungry devices like the iPhone, investors are concerned that the beating RIM is currently taking at the hands of U.S. consumers will eventually migrate to other countries. At the same time, there are signs that RIM’s core customer base of government and corporate users—people told to use a BlackBerry by their IT departments because of RIM’s industry-leading network security—are beginning to shift allegiances as CEOs and other senior executives demand iPhones. “It was the first time a piece of technology mattered to an executive,” says Anthony LeBlanc, RIM’s former vice-president of global sales. “And when the IT department lost power, it had a hugely adverse affect on RIM. The moment that happened, you saw RIM’s stronghold start to evaporate.”

Indeed, the origins of many of RIM’s current troubles can be traced back nearly half a decade to its response—or lack thereof—to the 2007 launch of Apple’s now iconic handset. Those familiar with RIM and the thinking of upper management at the time say the company made a strategic blunder by initially focusing on the iPhone’s limitations, as opposed to its promise. Whereas consumers were marvelling at a sensitive touchscreen and intuitive user interface, RIM’s engineering-minded team only saw an underpowered device with short battery life, a host of data-hungry applications that threatened to bog down wireless networks and a high price tag. “Four years ago, our focus from a threat perspective was purely Microsoft,” says a former executive, who spoke on the condition his name wasn’t used. “We did not believe Apple had a chance.”

Yet, even after the iPhone began to take off and Google entered the market with Android, RIM was slow to shift its strategic direction. Run by engineers and overseen by accountants, RIM’s senior management and board of directors had traditionally viewed RIM as a company whose core product was selling wireless services—namely secure email—and handsets to wireless carriers, corporate IT managers and big government departments. They were slow to realize that, as the BlackBerry caught on with texting teenagers and busy soccer moms, they were increasingly in the consumer electronics business too. Balsillie and Lazaridis initially downplayed the potential appeal of touchscreen devices because they believed, correctly, that they would prove difficult to type on. Similarly, Balsillie dismissed the importance of mobile applications, or “apps,” pointing out that the mini-programs merely replicated services that were already available over the Web. That was until Apple began selling the iPhone with its now famous “There’s an app for that” campaign.

After purchasing Ottawa-based QNX Software Systems Ltd. in 2010, Balsillie and Lazaridis embarked on a bold plan to transform the company. They proposed to migrate the BlackBerry operating system to a platform based on QNX technology, which was already being used to run nuclear power plants. It was a massive undertaking fraught with complexity and risk. “It’s a pivot on a massive scale that most people can’t comprehend,” said a former executive. “And it’s being bankrolled on a scale that most people can’t comprehend either.” But as risky as the plan was, doing nothing was not an option. That’s because RIM’s existing operating system was never designed to do the types of things that people now expect of their smartphones. “The cost to build on the current OS are too high for them to be competitive,” the former executive says. “It takes too long to build things, there’s too much debugging and too much development work to build the same corresponding solution that their competitors would build.”

Despite the high stakes involved, a controversial decision by senior management nearly cratered the effort before it got off the ground. In a bid to replicate the feel of an innovative start-up, it was decided that the employees working on the platform that held the keys to RIM’s future would be hived off from the rest of the company—a strategy that has been successfully employed by other high-tech firms, including Apple. “The problem is that it didn’t work, which is why they abandoned the strategy,” the former executive says. “At RIM, all the employees knew that the run-rate product needed to be transitioned, and if they got left out in the cold, they were essentially going to be maintaining a skill set that would be completely gone in a couple of years.”

Still, Balsillie and Lazaridis pressed ahead despite employee protests. “They started splitting development teams, which led to the defection of developers, not surprisingly,” the executive says.

There were also missteps on the marketing front. In late 2009, RIM hired Keith Pardy, a former Coca-Cola marketing executive, to help launch a branding campaign, marking the first time in RIM’s history that it would invest significant cash in an ad campaign. The result was a series of bland, feel-good advertisements that riffed on the famous Beatles song All You Need is Love. “I remember the first time I saw it,” says LeBlanc. “I though it was a MasterCard commercial.” Pardy left the company last year for personal reasons.

Not surprisingly, one of the first things new CEO Heins says he needs to do is hire a chief marketing officer. He told analysts during a conference call Monday that one of the reasons RIM has lost market share in the U.S. is because consumers aren’t as familiar as they should be with BlackBerry, which is still largely viewed as a business tool south of the border. “We need to be more marketing driven and more consumer oriented,” Heins said. At the same time, he pledged to improve the company’s track record in bringing new products to market. “You’ve got to understand that RIM has gone through a tremendous growth phase and scaled really fast, and really successfully, I would say,” Heins said. “But we innovated while we were developing the product and that needs to stop. We need to innovate—don’t get me wrong—but we need to do it with much more emphasis on prototyping. Once we say a product is defined and a product is a product, the execution has to be really precise and decisive.”

The words had barely tumbled out of his mouth before critics emerged. “While we think this is a small step in the right direction, we are surprised RIM has decided to go with an operations-minded insider, especially since we consider the challenges tied more to strategy,” wrote UBS Investment Research analyst Phillip Huang in a note to clients. Others, like J. Richard Finlay, the director of the Centre for Corporate and Public Governance in Toronto, were more blunt. “The fact that RIM’s top management and board could take so long to come up with so little just shows how out of touch they remain,” he says. “It’s obvious that Balsillie and Lazaridis wanted their guy in the top slot and do not grasp why shareholders were looking for more than a marionette whose strings they can pull any time.” Investors, too, don’t appear convinced that he’s the right man for the job. RIM’s shares fell nine per cent after the markets opened on Monday, and another three per cent on Tuesday.

RIM’s first chance to prove its doubters wrong will come next month when it unveils its second crack at a tablet. After a nine-month delay, RIM’s PlayBook will be relaunched with updated software that will finally allow users to read their email and check their calendars without having to tether the device to a BlackBerry. But the real test will be delivering a lineup of BlackBerry phones running the same software. “I think what everyone’s really waiting for are the new products to come out, hopefully some time by the end of this year,” says Len Racioppo, the president of investment firm Jarislowsky Fraser Ltd., which began selling its sizable stake in RIM in 2011. “But with every day that goes by, it becomes more difficult. Others are taking market share.”

Clearly, RIM can ill afford any further delays. But significant risks remain. Unlike its rivals, RIM doesn’t just make handsets and the software that runs them. It also handles email for wireless carriers and sells BlackBerry Enterprise Servers around the world. Everything is interconnected. A change to one piece of the puzzle threatens to throw everything into disarray. “Once you pull at one string, the whole thing becomes a big Pandora’s box of crazy,” said one recently departed employee, who didn’t want his name used. “That’s why it takes nearly 10 months to build an email client for PlayBook.”

In the meantime, Balsillie and Lazaridis will be forced to watch from the sidelines the ending of a remarkable story they co-authored: a Canadian start-up’s rise to global superstardom, followed by a long fall and now, if things go as they plan, an improbable comeback. “It could be a great home run, or it could be a massive flop,” says Racioppo, who stresses that his firm has no plans to buy more RIM shares because of the huge risks now involved. “You just don’t know.”




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The fall of the BlackBerry titans

  1. This article is way too long.  The main thing that Blackberry had going for it that attracted businesses and government was it encryption i.e. secure communications.  Who else has that now??

  2. Hey blacktopold… Stop being such a “techie”.  That’s precisely the reason RIM is suffering now… They didn’t listen to the changing customer demands… They were stuck with a technology they couldn’t adapt quick enough to the emerging touch screen.  So, stop talking about “secure communications”.  Most consumers don’t evaluate whether or not the device and supporting service provides “secure communications”.  That’s only a real concern for corporate and government.  But the real volume and makings of success nowadays is in the consumer marketplace which then drives the corporate marketplace. IT depts in corporations and government have very little power anymore to push a specific technology.  Nowadays, what employees want as consumers drives what they want as employees.  It’s that simple.  And when that happens to executive level, guess what.. out with BlackBerry, in with iPhones or Androids.

    • You don’t know what your talking about.

  3. You know that RIM was doomed when the NHL thug owners thought,that you were an undesireable.Balsillie and Lazaridis have theirs and that what it is all about.

  4. Hmmm Alboini,  I own some of his worhtless Northern Financial shares.  Yes, let’s give him the keys to the office  at RIM.  The only one making money will be him.  Rim is wheret Apple was a few years ago and close to a major breakthorough with QNX.

  5. Long story short… Just go back to school

  6. TO J S Smith
    I am with a company with 90000 employees and likely 50000 BB’s in the system and we will never change  because of the absolute security of the BB system Your in a dreamworld with a ton of toys in it. Security in the business world is the #1 concern that’s why there is such a slow movement to change from the BB as they retain 75 million subscribers to this day and still growing. I  have a Mac Pro and an I-Phone 4 and a BB and it is still my business toll of choice.  Mac are great toys but BB is the business tool of choice……

    PLM Barrie Ontario

  7. There is a reason they call them Crackberrys. The love that Blackberry Nation feels for RIM defies mere reason. The acquisition of QNX was a Bold move, Building an entirely new platform from while maintaining an existing one is a complex undertaking fraught with peril. However, the potential of a QNX based platform cannot be overstated.
    Thorsten Heins is new to being a CEO, but seems to know what he is doing. One of his first moves was to reach out to Crackberry Nation, to speak directly to the people. He promises to reward the faith, and calls for “The Nation” to give ideas and feedback.
    He’s on all the blogs, watching and listening, and he has got his people on them, reaching out and interacting with “The Nation”.
    This a big change, and a pretty good barometer of change to come.
    Yes, it is a big gamble, but, really, Blackberry only now beginning to re-enter the fray.
    There are many who want to hate on Blackberry, for political, and sometimes personal, reasons.
    Remember one thing: Blackberry invented the smartphone business.

  8. Not surprising. RIM down the tubes where Nortel is waiting to console them – two very good tech companies that just couldn’t keep up to the fast pace of the American industry like many other Canadian companies in other industries. The Yanks are coming and we are not prepared and never have been, in the business world. Retail has been toppling for some years now but again we are not up to date or just not good at it and it is not entirely that they have the money. They know their businesses and they defy the risks, something our British heritage hasn’t taught us but we muddle along anyway. I guess they were right, those who years ago said we are hewers of wood and drawers of water and if we don’t change and become a lot more dynamic we’ll be destined to sell our wood and water (and oil) to remain relevant in this world but we are nice people and others like us.

  9. A lot of fanatical hype here on the wisdom of the founders.
    The original idea was not from these so called 2 gurus but adapting an abandoned Ericcson technolog called ARDIS and speeding it up from pager technology. This author belongs in Hollywood not doing tech analysis for Macleans. Science fiction indeed.

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