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Losing the Signal: How BlackBerry’s bid to one-up the iPhone failed Add to ...

Excerpt from Losing the Signal: The Spectacular Rise and Fall of BlackBerry by Jacquie McNish and Sean Silcoff

In this 1994 file photo, Jim Balsillie, left, and Mike Lazaridis show off a wireless scanner that processes credit and debit card transactions. Tibor Kolley/The Globe and Mail

How BlackBerry’s bid to one-up the iPhone failed

Mike Lazaridis, ever the boy electrician, liked to relax by tearing apart small machines in his spare time. Just as he once opened radios in his basement lab for fun, Lazaridis lifted hoods on competitors’ phones. Staff visiting his third-floor office in a building called RIM 4 grew accustomed to disemboweled phones with chipsets, antennas, and wires strewn across his desk. Usually the desktop autopsies confirmed Lazaridis’s faith that BlackBerry was the smartest phone on the market.

In the summer of 2007, however, Lazaridis cracked open a phone that gave him pause. “They’ve put a Mac in this thing,” he marvelled after peering inside one of the new iPhones. Ever since Apple’s phone went on sale in June, critics and consumers were effusive about the sleek phone’s playful touch screen, elegant graphics, and high-resolution images. Lazaridis saw much more. This was no ordinary smartphone. It was a small mobile Apple computer whose operating system used 700 megabytes of memory – more than twenty-two times the computing power of the BlackBerry. The iPhone had a full Safari browser that traveled everywhere on the Internet. With AT&T’s backing, he could see, Apple was changing the direction of the industry.

Lazaridis shared the revelation with his handset engineers, who had been pushing to expand BlackBerry’s Internet reach for years. Before, Lazaridis had waved them off. Carriers wouldn’t allow RIM to include more than a simple browser because it would crash their networks. After his iPhone autopsy, however, he realized the smartphone race was in danger of shifting. If consumers and carriers continued to embrace the iPhone, BlackBerry would need more than its efficient e-mail and battery to lead the market. “If this thing catches on, we’re competing with a Mac, not a Nokia,” he said. The new battleground was mobile computing. Lazaridis figured RIM’s core corporate market was safe because the iPhone couldn’t match BlackBerry’s reliable keyboard and in-house network delivery of secure e-mails. But in the consumer market, where the Pearl phone was competing, RIM needed a full Web browser. BlackBerry was a sensation because it put e-mail in people’s pockets. Now, iPhone was offering the full Internet. If BlackBerry was to prevail, he told RIM’s engineers, “We have to fix everything that’s wrong with the iPhone.”

While Lazaridis pushed internally for a response to the iPhone, publicly he and Balsillie dismissed their new rival. Companies often ignore competitors’ triumphs, but by downplaying a consumer sensation, RIM suddenly seemed out of touch. “I haven’t seen one,” RIM co-CEO Jim Balsillie told the Toronto Star after the iPhone went on sale in June. Months later, when the iPhone grabbed a fifth of the U.S. smartphone market, Lazaridis complained to the New York Times about its keyboard: “I couldn’t type on it and I still can’t type on it, and a lot of my friends can’t type on it. . . . It’s hard to type on a piece of glass.”

WATCH

Reporters Jacquie McNish and Sean Silcoff on researching and writing Losing the Signal: The Spectacular Rise and Fall of BlackBerry.

With every click of his PowerPoint presentation, Lazaridis felt his audience grow slack and bored. It was late August 2007 and RIM’s boss was making a pitch in a Manhattan hotel meeting room to a team of senior executives from Verizon and its British affiliate Vodafone. Lazaridis and chief operating officer Larry Conlee had been invited to New York by the carriers to propose new phone ideas. Although the iPhone wasn’t mentioned, there was no doubt Verizon and Vodafone were looking for a device that might supplant what was now America’s fastest-selling smartphone.

Judging by the drooping faces of John Stratton, Verizon’s chief marketing officer, his colleagues, and the executives from Vodafone, Lazaridis was losing the room.

RIM’s co-CEO had started with a pitch for BlackBerry Bold, due to launch in 2008. Clicking from slide to slide, Lazaridis extolled Bold’s improved keyboard, with an innovative track pad to replace the trackball, and large screen. This, he told the room, was the best phone RIM ever designed. But to Stratton and company, Bold failed to live up to its name. Up against AT&T and its exclusive multiyear deal to sell the iPhone, Verizon had little interest in another keyboard phone, nor did Vodafone. “The whole atmosphere was, AT&T has the iPhone and we don’t, so what do we do?” remembers Conlee. “Neither of those carriers likes to lose. It’s a religious war.”

‘I couldn’t type on it and I still can’t type on it, and a lot of my friends can’t type on it. . . . It’s hard to type on piece of glass.’

Mike Lazaridis

Verizon had been caught off guard by iPhone’s ascendency. Two years earlier, Verizon rejected an overture from Steve Jobs to partner with Apple on its plans for a new phone. A stickler for bandwidth reliability, the New York-based carrier wouldn’t relinquish control of its network to an unseen phone Jobs wanted complete authority to design. Like Lazaridis, Verizon executives correctly predicted iPhone traffic would create gridlock on AT&T’s network. What they didn’t anticipate was that consumers didn’t care. A multibillion-dollar market in carrier revenue was opening up and AT&T had a lock on the hottest device. RIM’s Bold was no match for the iPhone.

Sensing the audience’s mood, Lazaridis hurried to plan B. Up on the screen, surrounded by lightning, shone an ebony glass-covered phone. That, Lazaridis explained, was Storm. Phone and computer companies had experimented with touch-screen devices for years. None, he said, could match the magic touch of Storm. Pulling out a prototype, Lazaridis pressed a finger on the glass screen. There would be no sweeping fingers, no clumsy iPhone typos on this device. To make the point, his finger hovered like a computer mouse over a digital version of BlackBerry’s signature keyboard on the phone’s touch screen. When he pressed on a digital key, the entire screen clicked down like a giant button, replicating the tactile feel of tapping a BlackBerry keyboard. RIM had combined the navigation feel of a computer mouse with the secure handling of a BlackBerry keyboard. Under the hood, the ingenious floating Storm screen was designed to activate existing BlackBerry software every time it was clicked. This was how RIM would outsmart Apple, by combining the best of BlackBerry with the seductive lure of a touch screen. His old swagger returning, Lazaridis hailed the next smartphone wave. No one disagreed. Superlatives followed as Verizon and Vodaphone executives passed around the prototype. “They were over the moon,” Lazaridis would remember. “They loved the prototype. They called it revolutionary.”

RIM had its own reasons for backing the kind of touch phone that Lazaridis had initially and so publicly disdained. Verizon and Vodafone were two of the world’s biggest carriers with deep ties into the U.S. and European consumer phone market. Their endorsement of Storm came with an estimated $100-million marketing budget and thousands of retail stores to promote the phone. If Storm took off, the two carriers could potentially sell millions of phones. RIM could stand toe-to-toe with Apple. This was the biggest break in RIM’s history. When Lazaridis and Conlee returned to Waterloo, Balsillie had only one reservation about the Verizon contract. RIM had to make the transformative phone in nine months. Was it possible for RIM to deliver in such a short time frame? The answer, Lazaridis and Conlee agreed, was yes.

Conlee broke the news about RIM’s ambitious deal to a select group of engineering executives shortly after the Manhattan meeting. In a room located adjacent to his office in RIM 4, Conlee outlined the secret project for the company’s first touch phone. The code name for the product was Project Storm, a nod to the disruptive impact RIM hoped the phone would have on the market. But that day the name captured a blizzard of objections from the company’s engineers.

RIM was racing to roll out Bold phones for 2008; now it wanted to shift gears and create a new phone in nine months! It took eighteen months to create a new BlackBerry. A touch phone was something else. Although Storm would use BlackBerry’s existing operating system, it would need new hardware, radio and antenna configurations, and additional software. RIM products were reliable, never this rushed. There would be no time for proper “soak-testing”– engineering talk for working bugs out of software. Waving off protests, Conlee, RIM’s product enforcer, asked each engineer to explain what he or she needed to make the touch phone happen. The room of problem solvers reluctantly itemized the parts, software, and staff they would need, immediately. Conlee then turned to Perry Jarmuszewski, a soft-spoken radio engineer who had been with RIM for more than a decade. “Perry I guess you’re good to go. You haven’t said anything,” Conlee offered.

On a scale of 0 to 10, if 10 means no way, then this project is an 11. It’s impossible. It’s something I would not be able to deliver.

Perry Jarmuszewski, RIM engineer

Jarmuszewski, who preferred solving problems to making them, had deliberately held his tongue. Prodded by Conlee, he pushed back. “On a scale of 0 to 10, if 10 means no way, then this project is an 11,” he said. “It’s impossible. It’s something I would not be able to deliver.” Conlee shrugged and gave his marching orders: “Well, you guys are the heads of our engineering groups. You are paid accordingly. I expect you to get it done. Verizon wants an answer to the iPhone. We have to do it.”

As engineers filed out, they looked anxiously at RIM’s chief technology officer, David Yach. He’d just returned from a short holiday ready to devote the next months to fine-tuning the Bold phone. Now this. Yach would later say he and his colleagues understood the importance of the touch-phone contract. “But the importance didn’t mean we could get it done any faster than we’d ever built a phone before,” says Yach.

“Did we push the teams too hard?” says Lazaridis. “Probably. Can you show me a company that doesn’t? I’d be hard-pressed to believe you. The pressure Jobs put his iPhone team through was worse than anything I ever put on my team. The fact is, that’s how business runs.”

After years of flying below the radar, RIM’s chiefs were in the limelight as Lazaridis and Balsillie won awards and mainstream media attention. In March 2008, Wall Street’s weekly financial bible, Barron’s, called RIM’s co-CEOs “under-appreciated northern lights,” adding both to its annual list of the world’s best CEOs. Also on the list was Steve Jobs. After Mac computers, iTunes, and the iPhone, Jobs was Silicon Valley’s undisputed king of cool. By comparison, Lazaridis and Balsillie were bright but awkward public speakers. When Jobs spoke, his fans cheered. When Lazaridis and Balsillie stepped onstage, people sometimes scratched their heads.

For all his confidence, Balsillie could be a surprisingly baffling public speaker. The executive who carefully rehearsed scripts for customer presentations preferred a let’s-see-what-happens approach to interviews. He once explained his speaking strategy to university students: “The great thing is, when I talk, nobody knows what I’m going to say, including me.” On April Fools Day, 2008, Balsillie gave the kind of spontaneous interview that gives publicists coronaries. Wearing a tan jacket and a blue T-shirt, Balsillie sat down with George Stroumboulopoulos, host of a popular Canadian Broadcasting Corporation TV show. Referencing the popular iPhone, Stroumboulopoulos asked if it was time to add to RIM’s lineup: “Do you ever look at it and go, ‘What are we going to do if this isn’t our primary business, growing RIM beyond . . . a BlackBerry?’ ”

“Um, no,” Balsillie laughed, “we’re a very poorly diversified portfolio.” “You’re just going to focus on one thing!” said Stroumboulopoulos.

“It either goes to the moon or it crashes to Earth,” Balsillie replied.

In the spring of 2008, no one believed RIM would flame out. Its stock market value was more than $70-billion, quarterly revenues were up 100 per cent from the previous year, and the company sold sixty thousand BlackBerrys daily. Still, the company couldn’t afford to be arrogant. The iPhone had grabbed a 17 per cent share of the U.S. smartphone market, while RIM’s share slipped from 45 to 40 per cent. This was more than a battle of duelling devices. Apple and RIM were competing to capture consumer imagination. When Jobs promoted the iPhone he talked about tangible pleasures – the ability to search Paris maps, listen to Bob Dylan, play video games, and tap cameras that captured the world. When Lazaridis talked about RIM’s phones, you needed an engineering degree to parse his words. Unveiling RIM’s Bold phone at a conference in Orlando, Florida, in May 2008, he began with a spiel ripped from a product manual: “3G tri-band HSDPA. Quad band Edge. Wi-Fi A, B, and G. GPS. 624 megahertz strong-armed with MMX. Powerhouse processing. Bold. Brilliant, strong colour display. The best keyboard we’ve ever made.”

Translation? RIM was launching a third-generation phone that came with Wi-Fi, GPS, and a more powerful processor. To technology wonks in the theatre, corporate IT managers, and CIOs, Lazaridis made perfect sense. He was announcing the smartest new smartphone for business customers. But to investors, journalists, and non-engineers, Lazaridis might as well have been reciting algorithms.

In other public appearances that spring, Lazaridis fretted about the very thing iPhone users considered irrelevant: network capacity. One of the great strengths of RIM’s internal network system was its ability to compress large amounts of data, a service that reduced bandwidth use and data charges for big customers. When he was presented with a global leadership award by the Computerworld honors program, Lazaridis, the practical engineer, lectured an interviewer about the wireless industry’s long history of preserving limited bandwidth: “We have to keep that same way of reasoning, that same conservative conserving mind-set going forward as we apply more and more applications to the wireless spectrum.”

Three months later, in July 2008, Apple smashed the networks Lazaridis wanted to conserve by launching the App Store. The online outlet was stocked with software applications that iPhone users, then numbering 6 million, could download. A finger swipe could race cars through video games, book hotel rooms, and order food. Apple sold more than 10 million apps in three days. The number rose to 60 million in a month. By 2011, the App store was stocked with half a million apps and had registered more than 15 billion downloads.

Bandwidth conservation was yesterday’s priority. AT&T’s networks were so clogged that customers began suing Apple and the carrier for dropped calls and other transmission headaches. The message was clear: wireless data traffic was only going to get bigger. The answer was not conservation, rather, it was bigger, faster wireless highways.

While Lazaridis chased a new path with Project Storm, Balsillie pursued a once unthinkable opportunity in a northwest Chicago suburb. Schaumburg, Illinois, had been Motorola’s home base since 1976, to accommodate its expansion into communications equipment, pagers, semiconductors, and Quasar televisions. Its greatest success came in the 1980s and 1990s when it parlayed its pioneering cellphone technology into a global powerhouse, earning dominant market shares in North America, Asia, and Europe. By 2006 cellphones accounted for two-thirds of Motorola’s $43-billion in revenues. The glory days, however, didn’t last. Preoccupied with internal turf battles, Motorola’s “warring tribes” had missed threats posed by BlackBerry and iPhone. It had focused most of its attention on sleek phone designs, such as the ultra–thin Razr, failing to grasp that software-powered smartphones were the future. Motorola “didn’t have the DNA or the people” to understand the software, former CEO Ed Zander told Chicago Magazine. By the time Balsillie came calling in the spring of 2008, Motorola was under seige.

Motorola’s core mobile device sales were rapidly shrinking, tumbling nearly 40 per cent in 2008 from the year before to $12.1-billion. Operating losses in the group, nearly doubled to $2.2-billion in the year, a humbling decline that prompted cantankerous shareholder activist Carl Icahn to wage a noisy battle to dismantle the company. Motorola’s misfortunes, Icahn complained in a public letter to shareholders, were the legacy of “blunders” by management. Under pressure, CEO Zander left the company, and its new chief, Greg Brown, was directed by Motorola’s board to explore a sale of its mobility business. When RIM got an overture from the U.S. company’s investment bankers, Balsillie and RIM’s senior executives jumped at the chance to acquire the struggling mobile division. Despite its market woes, Motorola had a treasure chest of assets. Its cellphone operations and global market channels could help RIM keep pace with runaway BlackBerry demand. Motorola phone hardware could be repurposed with BlackBerry operating systems and software. If a deal could be worked out, RIM would have more clout to face Silicon Valley rivals.

What Balsillie prized most of all was Motorola’s vast arsenal of intellectual property rights. There were an estimated seventeen thousand issued mobile patents, most of them for dated cellphone technology that was more valuable in the legal arena, where RIM and its competitors faced a constant onslaught of patent lawsuits. RIM’s deal maker was obsessed with intellectual property after the emotionally scarring NTP war. He lobbied governments on both sides of the border and spoke to business groups to push for reforms that might prevent the legal brinksmanship that nearly flattened RIM. Washington and Ottawa were receptive, but progress was slow. In this vacuum, tech companies strengthened their legal rights by acquiring patent collections from struggling rivals. With Motorola’s patent chest, RIM would hold a much stronger hand against patent trolls and competitors alike.

Balsillie and senior RIM executives and bankers met frequently in Schaumburg with Brown and his team during the spring and summer of 2008. Balsillie initially believed the takeover would happen. Motorola was under enormous pressure from investors to sell its mobility business. Motorola’s weakened condition did not prevent it from slapping a rich price tag on its mobility unit. Brown, according to people familiar with the talks, wanted $10-billion for the money-losing division. The asking price, billions more than RIM was willing to pay, didn’t include patents. All Motorola put on the table were dated factories, weak phone products, and a bloated staff. After studying Motorola’s books, RIM concluded the division could only survive if thousands of jobs were eliminated, a mass execution that would be left to RIM. “We didn’t want all these people, but they said, ‘That’s your problem,’ ” remembers Balsillie, who, in the end, opposed shouldering what he considered “a hell of a burden.”

After six months of negotiations, talks ended in August. For Motorola, the missed opportunity was devastating. With no buyers and a deepening global financial crisis, Motorola went into a tailspin. Mobility sales tumbled further and the company cut another 10,000 employees, reducing Motorola’s total employee count to 60,000 from a peak of 150,000 in the late 1990s. Balsillie walked away believing Motorola Mobility was worth little more than its patents. He would later regret underestimating RIM’s long-standing adversary.

There is a small white building on Columbia Street, close to the University of Waterloo, where BlackBerrys were sent to be tortured. Beatings took place in a concrete-floored lab with a white, corrugated-steel ceiling, from which pipes, wires, and row after row of high-voltage lights hung. This was where RIM’s quality assurance team tested the limits of new BlackBerry models. Phones were thrown in swirling industrial tumblers, shaken by robotic arms, dropped on cement, and subjected to extreme temperatures. Afterward, a confidential report on phone flaws was circulated to product managers and executives. The meticulous attention to quality resulted in a low phone return rate, just 3 per cent.

In the summer of 2008, the quality assurance team was itself a target of abuse. RIM had to ship hundreds of thousands of Storm phones to Verizon and Vodafone. That was a problem because the new phone kept getting failing test grades. The floor of the quality assurance lab offered grim proof of Storm’s fragility: shards of glass and parts everywhere. The phone’s hardware engineers rejected the test findings, however. The problem, they insisted, was the quality assurance team. The pneumatic pistons that repeatedly poked Storm touch screens were too rough. These phones were not traditional BlackBerrys encased in hardy metal and plastic – they were glass-covered. Storm had to be tested by humans, the engineers insisted. So they pulled in University of Waterloo students to test the phones in the quality lab. The dazed students sat in chairs repeatedly poking the glass screens of test phones for hours. The screens survived the rhythm of human touch, but other problems soon became evident.

Storms frequently crashed. The touch screen, which hovered over a hidden dome to allow digital menus, icons, and a keyboard to be poked and clicked, was stiff, cumbersome, and unreliable. Storm was specifically designed to overcome the iPhone keyboard’s biggest flaw. Millions of Americans dispatched botched, often comical messages because of iPhone’s unreliable, seemingly subversive auto-correct function. Type the word “pens” and “penis” might appear. “Your dad and I are going to Disney” might turn into “Your dad and I are going to Divorce.” Storm was designed to eliminate this annoyance with a glass screen that activated BlackBerry software only when a user clicked down on the screen. The floating screen, however, became less reliable the farther a user’s finger moved from the center. Poke the letters a or l, letters at the opposite end of the keyboard’s home row, and the activation signal grew so weak that the phone’s software sometimes misunderstood the command and responded with the wrong letter. “It needed work,” Craig McLennan, a RIM sales vice president who oversaw the Verizon relationship, recalls thinking when he got his hands on the device for the first time in summer 2008. “It wasn’t ready for game time.”

Released on Nov. 28, 2008, the BlackBerry Storm was the company's first touch-screen smartphone. BlackBerry / AP Photo

RIM insiders weren’t the only ones to find fault with Storm. RIM hand-picked a few loyal customers to give the company feedback after testing early versions of the phone. One was Alexander Trewby, a vice-president of mobile development with one of RIM’s largest clients, Morgan Stanley. The Storm phone Trewby received in the spring of 2008 lasted an hour. “It just turned off and then we could never turn it on again,” he says. When he finally got a Storm that worked he was surprised how much he disliked it. “From a hardware perspective, it was an automatic fail,” says Trewby. “With the iPhone, where you tapped the screen, it was just a much more elegant solution, as opposed to physically pressing something and waiting for the click. The Storm felt a lot more machine-like, more mechanical, as if it was less electronic, less done by sensors. It was very much about hardware. It wasn’t about software. We knew straight away it felt it was a wannabe. It was not as visionary, modern, as fun to use as an iPhone was. The device was dead on arrival.”

More shocking to Trewby was Lazaridis’s reaction when Trewby raised concerns about Storm at a private event for corporate customers during a BlackBerry conference in Orlando in May 2008. Lazaridis glared at Trewby, whom he knew, and then turned to an aide and complained: “I thought there weren’t going to be any press in here.” The Wall Street Journal that day had broken the story of Storm’s impending arrival, enraging Lazaridis, who hated seeing BlackBerry product details routinely leaked to tech blog sites. But his response was as troubling to Trewby as Storm’s faults. Lazaridis had turned to Trewby in the past for his thoughts on new BlackBerry features, and now he was treating him like a stranger. Lazaridis seemed to be in such denial about Storm’s flaws that he was shooting the messenger. A RIM executive wrote Trewby to apologize for the CEO’s reaction, but the damage was done. A huge BlackBerry fan, the London executive began doubting the Canadian company. “It gets you scared because you realize they’re slipping,” he says. “His back was obviously up.”

RIM’s founder worked closely with software and hardware teams to oversee the integration of the new touch screen with the company’s existing software. It had been a problematic marriage from the beginning because the poke-and-click touch screen was so unreliable that it activated the wrong responses unless its software was in good working order and various components were assembled with care. While Conlee pushed far-flung foreign and domestic parts suppliers and contracted manufacturing companies to stay on schedule, Lazaridis fended off complaints from company veterans begging for more time. Quality shortcomings forced RIM to delay delivery four months past the initial June deadline. Problems persisted and soon the October ship date looked impossible.

The first phones rolling off production lines suffered from what RIM engineers called “high infant mortality rates,” a greater chance of failing in early life. The problems persisted as the Christmas selling season approached. If the phones were not shipped before late November, there was a good chance Verizon would walk from the contract. RIM senior executives agreed it was better to ship a flawed product than no product at all. To engineers, Lazaridis repeated the same mantra: “We’ve bet the company on this. It’s critically important. We have to get this done.” When problems persisted, RIM’s chief technology officer, David Yach says Lazaridis grew frustrated. “He was almost incredulous that it couldn’t be done,” he says.

Lazaridis’s conviction that RIM could deliver a new phone within a year came down to faith, a deep abiding confidence in himself and his company. A follower of the Christian Science movement and Emmet Fox’s sermons on the transformative power of human will, Lazaridis believed people could, if sufficiently determined and talented, shape their own destiny. The fabulous success of BlackBerry only cemented that belief. Where would RIM be if not for his and Balsillie’s persistence in the face of countless near-fatal reversals and product challenges? BlackBerry lived because Lazaridis and Balsillie never gave up. Ever. “Mike believes that the mind can will things to happen,” Balsillie says. And Lazaridis always aimed high. He didn’t just want to catch up to Apple. Storm had to be better than the iPhone. “Mike thought of himself as Canada’s Bill Gates. He wanted to beat Steve Jobs,” Balsillie says.

For his part, Lazaridis says the rush with Storm was unavoidable: RIM couldn’t afford to say no to the biggest contract in its history. Besides, RIM’s engineers had done the impossible before, pushing out the Pearl in less than a year while juggling other phone launches. He was confident the magic would work again with Storm. “This is a team that prides itself on pulling off miracles, pulling all-nighters, working hard, solving the most complex problems, getting things done on time, getting things done under the wire. This is a team with a can-do spirit,” he says. At first Lazaridis’s faith appeared to pay off. RIM had assigned a team to hand-assemble Storm phones before they moved to mass production, and the results were impressive. Under expert hands, the movable screen had been carefully calibrated to react to user clicks. The phones worked flawlessly and Verizon’s executives, according to RIM officials, loved the early samples. It was a different story when the phones were mass-produced by RIM’s manufacturing partners in Mexico and Europe.

Racing by what Balsillie calls “the seat of our pants,” the company pushed Storm out the door in time for Black Friday, November 28, the busiest shopping day of the year in the United States. Verizon and Vodafone had tested and approved the phone, but RIM knew they were shipping an unfinished product. Balsillie remembers the weeks before the launch as a nervous time. After years of high-speed typing on BlackBerry keys, Balsillie was dismayed at Storm’s delayed response to touch-screen clicks. “It was slow,” he says, like someone walking with ten-pound bags tied to each leg. When he took his concerns to Lazaridis, Balsillie says: “Mike said he’ll fix it. You trust him.” Other employees were not so optimistic, some privately referring to their new product as a “shit storm.”

“Honestly: play with the Storm for two days as I have and you will admire my patience at not throwing it out the window.”

Stephen Fry

Critics were merciless about RIM’s new offering. “Head-bangingly frustrating,” said New York Times columnist David Pogue in a scathing critique two days after Storm went on sale. “Storm had more bugs than a summer picnic,” he wrote, going on to list a litany of complaints: “Freezes, abrupt re-boots, non-responsive controls, cosmetic glitches.” Raising a question quietly asked by numerous RIM employees, the Times reviewer concluded, “How did this thing ever reach the market? Was everyone involved just too terrified to pull the emergency brake on this train?”

British actor and gadget reviewer Stephen Fry was similarly caustic. A fan of Apple products and BlackBerry’s Bold, Fry complained about the absence of wi-fi,a free local network application available on iPhone. As for Storm’s touch screen, he described the “judder, lag and jerk” of the click-screen keyboard as “a painful horror.” He compared typing an e-mail to “an antelope trying to open a packet of cigarettes.” Storm, Fry concluded, “is the Edsel of smartphones, an absolute smeller from top to bottom.”

WATCH

Our editor had a hard time typing on the Storm's clickable touch screen and navigating its predictive text.

Slamming any technology device backed by Silicon Valley’s forceful public relations armies was rare in 2007. Twitter, today’s social media venting platform of choice, was just a year old and technology bloggers sometimes pulled their punches out of fear of being cut off from future interviews and product events. When the British celebrity took a sledgehammer to the admired BlackBerry brand, his comments went viral. Was he trying to sabotage BlackBerry, a BBC reporter asked? Unrepentant, Fry replied, “Honestly: play with the Storm for two days as I have and you will admire my patience at not throwing it out the window.”

Although reviews were devastating, BlackBerry’s fans had faith in RIM’s record of producing reliable phones. Borrowing a page from AT&T’s Apple promotions, Verizon lubricated sales by heavily subsidizing Storm phone purchases for any customer signing up for a two-year phone contract. After rebates, the touch BlackBerry sold for $200. The low price, combined with BlackBerry’s reputation for quality and innovation, attracted hundreds of thousands of customers early on. While sales soared, RIM’s engineers worked feverishly to repair software glitches with upgrades. The more phones sold, the more time RIM had to clean up after its Storm. By the end of January 2009 hope grew within the company that Storm might lift off. The company’s chief promoter, Balsillie, told the Wall Street Journal RIM was producing 250,000 phones a week to keep up with demand. In a bullish forecast he pronounced that Storm was “an overwhelming success.”

Excerpt from: Losing the Signal: The Spectacular Rise and Fall of BlackBerry by Jacquie McNish and Sean Silcoff, coming out May 26.

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