what killed the Blackberry? well in short they fell behind and got outcompeted and I'm saying they because I left rim or
Blackberry later in 2007 and it really only became painfully obvious that they were outcompeted
by 2010 and by that time the mobile landscape had
changed a lot mostly because of Apple and Google, and the
things that had made Blackberry great were really no longer that important but let's start with a bit of history and
what made Blackberry great In late 1993 Mike lazaritas the uh co-o over
him, although he was really the main guy in charge, made the Bold decision to build our
own Mobitex Wireless modem module which would be sold to other companies so they could integrate
it into their products to add Wireless functionality We were ready to sell our modems by 1995 but
the mobitex wireless networks that it used were rather slow and far too expensive to
use for just general internet web browsing so it wasn't really something for consumers it was for vertical markets that is custom
applications that get high value out of relatively small amounts of data because back then there
really was no wireless data so it was something like Mobitex or nothing but if you're in a business of selling a part
for others to integrate into their products you have to wait for them to design it in
launch their products and then hope that they sell lots of product so you can sell to them so in 1995 Rim set out to build their own
integrated messaging device with a flip open screen and integrated keyboard and by April of 1996 that was demonstrated
to RAM mobile data, and that was a significant thing and also a major scene in the Blackbery
movie which is based on RIM -- roughly but the Prototype looked much more polished
than the hack that was in the movie and also not like in the movie it was Mike that was
in charge not Jim we started selling that device in quantity
in 1997, and really it can only do text emails and not hugely long text emails but compared to Pagers, which are still a
thing at the time, you could send messages both ways and quickly you just type in a message
and send it to somebody's email and they could email you back that was like a new thing and also in 1997 we started working on this
new piece of Hardware which was smaller more robust and more powerful compared to the previous
one it actually had a 16 MHz 386 processor on it, so powerful, and because we did our
own RF and DSP and modem and applications and all for it it was all very tightly integrated
and made for a smaller cheaper unit that used less power, so longer battery life. and the technology at the time still wasn't
all that stable yet so having control over the whole stack was a competitive Advantage then in 1998 came the thing that really made
Blackberry Blackberry which was integration with your Corporate email so this thing no
longer had its own email address but but was just a window into your company's email So if you sent something from this device
it would actually show up in your sent items on your Microsoft Outlook and if somebody
sent you an email it was in your main inbox. but you could also read it and Mark it red
or even delete it from your Blackberry so really it was the email that you took with
you but it wasn't a separate account that you had to worry about because with a previous
one that became very quickly obvious that it's like well which one was it sent to that
sort of thing and it was also highly encrypted end to end
which really helped with corporate IT departments because of course they weren't willing to
trust sending their secret emails over Wireless now getting that sort of thing to just work
was a big project that involved a whole lot of pieces so the way this initially worked
you would have a client company or organization that had their own exchange server for their
Corporate email and if they wanted to have Blackberry for their users they would set
up a Blackberry Enterprise server that would be bought from RIM and that connected over
the internet to some servers at RIM, which later become the network operations center and that in turn would send data over an x25
link, that is not internet, into the Mobitex network and the Mobitex network used small
500 byte packets called MPAKs and these were sent over the wireless network to the actual
Blackberry which the company provided to the user, bought from RIM of course, so if an
email was received the Enterprise server would immediately get that out of The Exchange Server
send it over the Internet through through the Blackberry network operations center over
here over the wireless network and out to the Blackberry so that the Blackberry could
start blinking or vibrating as soon as the email was received and that was a new sort of thing at the time
because other mobile internet email Solutions just relied on you saying okay get my emails
now whereas this thing got the email right away without you having to ask for it and because this network was very slow and
insecure The Blackberry Exchange Server would compress the data using a Burrows-Wheeler
transform which was a new sort of thing and very good compression for text, and then encrypt
it used eliptical curve key exchange and triple DES encryption so that it was secure all the
way through here and then this device would decrypt it and
decompress it. And we were very miserly about data so text
only and if the email was a long one it would only send the first I don't know so many hundred
words of it and if you wanted to read more which typically you wouldn't you'd click on
here saying I want more of it and it would go back here and fetch more so that we really
didn't waste any data So this is how it was when Blackberry was
just on Mobitex and our assumption was that the mobile network was slow insecure and unreliable And we had to deal with that there was of
course other mobile networks in the works already at this point but Blackberry on Mobitex
was there and this is the thing that people got hooked on Blackberry and Mobitex is really
what made RIM's name but then by 1999 GSM mobile phone networks
were starting to roll out this GPRS thing which was basically an add-on to GSM that
would allow you to do packet switch data which is exactly of course what you needed for Blackberry GSM was wildely successful in Europe so that
basically there was no other cell phones in Europe and even in North America GSM was coming
in more so GPRS was very important and in 1999 RIM started to develop our own
Blackberry product based on GPRS and for this we licensed the GSM GPRS protocol stack from
a company called TTP-com from the UK, and we licensed that with the source code and
we used a chip set from Analog Devices that this code was meant to run on and then we
tried to mash it all together and it was all very complicated and quite flaky at first and because we still had control over the
whole protocol stack and applications we could run all that basically the wireless modem
stuff and the application stuff on the same processor, plus DSP of course. And that allowed us to have fewer chips compared
to competitors and longer battery life and just a smaller device so a competitive Advantage
there Now GPRS at first wasn't overly fast or reliable
or secure so RIM's way of dealing with mobitex of compression and encryption and being really
miserly with data still made a lot of sense And passing everything through RIM's Network
Operation Center also helped because that way RIM could monitor it and
could tell right away when things went wrong and basically call the right kind of people
to get things back up So our whole architecture still made a lot
of sense. Now the GSM and GPRS specifications documents
were rather gigantic and they were designed to make use of patents that the companies
that wrote these specifications held, and the biggest players in this sort of uh specsmanship
were the big telecoms: Motorola, Ericso,n Nokia, Siemens. Collectively known as The MENS Club. and Mike lazaritas really wanted RIM to effectively
become part of the MENS club to contribute to specifications to be an Insider of the
telecoms be like the big telecoms and also collect royalties when other people built
devices And rim also could use more connection and
that sort of way of doing things at least that was the thought So Rim hired a bunch of Executives from Motorola
specifically Larry Conlee who then brought in more Executives from Motorola and that
whole thing was a bit of a cultural shift for the company because they wanted to be
like a big Telecoms. This was not something I liked at all! now despite trying to become more like these
stodgy big telecoms RIM was still way more Nimble than they were and basically these
big telecoms they just could not come up with good products for the consumer. They couldn't move fast enough they just weren't
in that space to come up with a good mobile device like Blackberry So there's never any anything that really
threatened RIM from those companies although lots of stuff announced here and there. And we stuck with the physical keyboard because
it turns out that was a so much better way of inputting text compared to other touchscreen
approaches that there were out there like the "graffiti" on the Palm Pilot. Just to type on a physical keyboard just way
better, and for a device that is Communications and email Centric being able to type fast
really mattered Now by 2006 Blackberry was selling really
well but personally I wasn't really happy with the culture shift and I felt it was time
to move on So I sent a resume to Google and they flew
me down to the Googleplex in Mountain View California and I was interviewed by the Android
team because I had experience for that sort of thing. And at the time this was not public information
yet I didn't know that they were working on something like that and they said well we
have to work on some kind of mobile handheld sort of thing because apple is working on
it so we can't be left behind and I was kind of like oh shit! I had previously speculated that the only
companies that could kill us had to be very agile and billion dollar companies so the
startups just weren't well enough capitalized to build a mobile device with all the time
that it took, and the big telecom companies were just too slow moving to be really competitive
in that space so that basically just left Apple and Google
as threats and now they're both working on it, oh shit! so I was still working at RIM so uh I uh talked
to Mike Lazaridis and said do you know that Apple's working on this and Google's working
on this it's like oh shit and and uh he's like have you seen the latest sales figures? because Blackberry was like selling really
well I think this is what we were approaching Peak Blackberry at that time and in retrospect I can't really blame him
so much for not taking that threat seriously because there had been so many prodcts announced
that we're going to be a RIM killer that in the end never really amounted to much. so how is this going to be any different,
right? well it was. So actually iPhone was announced later that
year and shipped in 2007, and Android launched in 2008 and unlike RIM neither Apple nor Google actually
designed their own radio modem or radio modem firmware they just licensed it from chipset
vendors, specifically such as Qualcomm. And by then the technology was stable enough
that that approach actually made sense. by that time the networks were faster and
more reliable so these iPhones and Android phones they didn't need to go through a Blackberry
Enterprise server and NOC (network operatiosn center) and all that basically the consumer device would connect
straight to your internet service provider or to Gmail and download your emails that
way and yeah it wasn't as secure it wasn't as efficient but it worked and the consumers
didn't care cause the networks were fast enough Now the corporations that had their Blackberry
Enterprise server set up still very much preferred the Blackberry because they trusted it and
it was more secure but the actual employees at the corporations wanted sexier devices
like an iPhone with a big touch screen and all that and so RIM realized that a big touchscreen
was important but the core Blackberry users loved their keyboard and you couldn't take
that away. So there's various compromise solutions that
were tried like the Blackberry Storm with a Clickety screen which never really worked
very well or a slide out keyboard but fundamentally the keyboard and the big screen were in conflict
with each other In the meantime the input method on Android
and on iPhone was actually a keyboard on the screen so the keyboard had it in fact won,
it just didn't really need to be a physical keyboard like it was on a Blackberry So here's what I think where blackberry's
Advantage up to this point: The keyboard but the touch screens were just more sexy for
web browsing and such and typing on a touchscreen had actually gotten quite good partially through
essentially predictive figuring out what you actually meant to type if you actually missed
the right Keys. End to end compression that was very useful
for saving bandwidth but the networks were fast enough and the consumers weren't monitoring
how much bandwidth they were using so it didn't really matter that much. End to end encryption: the corporations cared
about that a lot, consumers didn't care about that plus the networks already provided some
fairly secure encryption over the air. So to the consumer it didn't matter. Monitoring of system through the NOC and basically
alerting various people that things need to be fixed that was an asset when everything
was flaky but there was a few well publicized times when the NOC went down, which means
all the blackberries didn't work. And every time that happened that was a big
news event because there's still a lot of very important people using Blackberry. So the NOC actually added unreliability as
opposed to reliability Tight integration by doing it ourselves so
that we could use fewer chips and such but all the chipsets that came out at this point
had a separate processor for the applications so a processor to run the Android or iOS and
the other processor to run the firmware stack for the radio that the chipset vendor provided,
so our ability to run everything on one processor didn't matter so much anymore And push notification of email: that wasn't
something everybody had. on a Blackberry your email just arrived and
it could Buzz or beep or whatever whatever you want it whereas a lot of rival products
you still had to kind of click on something go fetch emails, but that was changing. Other devices could do push notification in
their ways as well so that was also no longer a Blackberry sort of thing With the radio part that handled the uh GSM
GPRS Edge 3G Etc being a component that apple and Google could just buy, their focus was
more on the operating system and a rich Suite of applications to provide a really nice user
experience because that's something that they were always focused on from either Apple computers
or the web In the meantime rim or Blackbery was still
using its own homegrown OS and it just wasn't keeping up with the expectations that Apple
and Google had created of what a mobile device should be able to do so RIM ended up buying
this Canadian company called QNX that produced a mobile operating system that was more Unix
like. It was a small Ottawa company so it was relatively
easy to buy, and a mad scramble happened to basically try to integrate all that. Basically the company was treated more as
an HR hire. RIM didn't really care about the existing
QNX business, they just wanted the technology and the people to make a better Blackberry. but Apple and Google of course they didn't
sit still either and they kept on innovating so it was a moving Target, and over time the
applications be became a more and more important thing, and being the third player that is
incompatible was of course not great so Rim added the ability for Blackberries to run
Android applications. But then okay if your goal is to run Android
applications would it not make much more sense to just buy an Android device instead of a
Blackberry? of course there were still Die Hard Blackberry
fans who love their keyboard Loved their security and all that, but overall RIM was just getting
outcompeted and the bottom end usually ends up eating the top end RIM was the more expensive
corporate sort of solution. And with the consumers all buying lots of
Androids and iOS devices well they just got better and better and they could do basically
pretty much all the things that Blackberry was needed for. So Blackberry just gradually got pushed out
of the market they got outcompeted So now the question is where did RIM or Blackberry
go wrong? Well, aming to become like a big Telecom company
wasn't helpful when suddenly have large Nimble competitors. and look at the companies RIM was trying to
emulate. Motorola, Ericson, Nokia, Siemens -- none
of those companies lasted in a handset space. They just weren't able to move fast enough. Mike wanted RIM to just turn into an established
big company that reliably ships product, more focused on you know delivering instead of
constantly innovating and all that like some unstable startup And that would have probably worked out if
Apple and Google hadn't entered the market but then with them in there and other competitors
innovation was key just to stay in the game. Of course there was other distractions for
upper management there was for instance the NTP lawsuit which went on from around 2004
to 2006 and RIM got taken to the cleaners for $450 million over a bogus patent. There was the backdating Scandal which broke
I think in early 2007 and got settled in 2009 that caused a rift between Mike Lazaridis
and Jim Balsillem, which also didn't help. And then there's other distractions so for
instance Mike lazaritas founded the perimeter Institute for quantum physics and such in
1999 and he was also a Chancellor for University of watero from 2003 to 2009 Jim Balsille, not to be outdone he started
the center for international governance innovation in 2001. He was also trying to buy the Pittsburgh Penguins
in 2006 but I don't think that was the first time he tried to buy a hockey team And he was also very active in buying golf
courses so plenty of distractions there too. But distractions themselves don't kill a company,
they only make it less responsive. And I've been playing this thought experiment,
what if I could go back in time to any time and magically be able to persuade upper management
to change the direction of the company what would I do and when? In retrospect Rim needed to start a new effort
based on a real operating system years sooner so that by the time iPhone and Android came
around, Rim would have had an equally sophisticated offering by then. But this sort of effort takes years, so we
would have had to start that at least 5 years before 2010. And researching this a bit, Apple began efforts
for iPhone in 2004 but they based it on basically their Mac OS 10 and so they didn't exactly
start from scratch they already had a lot of experience with that. Google bought Android in 2005 but Android
already was a mobile OS by then so here for example is the Danger hiptop from 2002 and
that ran a precursor of Android so basically Android was already mobile OS by 2002. So I would say Rim would have had to switch
Focus to a new operating system, ditch the keyboard, ditch the things that make blackberry
great by no later than I would say 2003. But that was right around the time the Blackberry
was really taking off, we had our hands full with the success of blackberry there's no
way the company would have abandoned what worked so well at the time. So it would have had to hire a new team to
do the new thing in parallel but so many great Engineers would not be found in waterloo in
such a short time, it's not like Silicon Valley where people move around all the time. And even if such a great team could be found,
without Focus from the top without a clearly defined problem I don't see this going the
right way you can't just throw money in people that problem expected to go well I mean think
of all of these government IT software procurement disasters it just would have turned into one
of those. And even if the executive had this Vision
to focus on this new approach to divert the company Focus away from what was so successful
at the time, that would have been hard to justify, and
the solution that we had say around 2003 was pretty good for the time But what if we started with a more advanced
OS in the first place? well then the Blackberry would have needed
bigger more expensive Hardware would have shipped much later because it would have taken
longer and would have had worse battery life and likely would have missed its Golden Market
opportunity. And I was one of the people at fault for this
because back in 1996 when we started development of the OS for this thing I kept saying "it's
a pager, dammit" because that's the space it was competing in So I guess what you really needed to develop
this new more advanced mobile operating system and apps was a separate team with separate
leadership that cares primarily about that, and the best way to achieve that if it's done
in a different organization entirely. And that's exactly what happened because that
new better mobile OS was developed at Apple and at Google, different organizations just
wasn't RIM. But as time went on it was no longer a matter
of just the mobile operating system. You also needed an app store and all that
goes with it and a way of organizing your photos and your own mapping service and a
great web browser and a way of having podcasts hosted and video conferencing capability. Apple and Google were both able to leverage
their strengths in the Computing industry, so even if RIM had the more sophisticated
OS at the right time, it would have still been very hard to keep up So if I could magically go back and change
RIM's Direction and focus in the past, I still don't think I would be able to save it. In retrospect I think RIM may have been doomed
as far back as 2003 due to Apple and Google, well before Blackberry actually really took
off. And the thing is when a company has something
that worked well for a long time and is still more profitable than the alternative you stick
with it until it's too late. Think of Word Perfect versus Microsoft Word,
or sun Microsystems getting clobbered by Linux, or the record industry still selling shrink
wrapped CDs as opposed to going to online delivery, or newspapers versus Craiglist. It just happens time and time again so yeah looking back I don't see how this
could have gone well. The inevitable could have been postponed a
bit longer with better focus and better Direction perhaps but I don't think we could have been
saved against the Juggernauts and as for me leaving Rim in 2007 I think
was one of the best decisions I ever made. and working on this video, I dug up some of
my old blackberries I still have from back in the day. So this is the original Blackberry and has
a nice and wide keyboard and we all got really fast at typing on these things. I think 40 words per minutes on this things
was uh pretty typical. But just black and white no camera or anything
like that. This one is a BlackBerry Pearl and it only
has half as many keys as letter but basically just use predictive sort of typing to figure
out what you meant to type even though it only has half as many keys as letters, sort
of like the T9 predictive typing but better cause it's got more keys than that. And the nice thing about this is it's small
it's really pocketable not like today's gigantic phones. Of course no YouTube or scrolling through
social media on that one but maybe that was a feature.
