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Former BlackBerry co-CEOs Jim Balsillie and Mike Lazaridis, and current CEO Thorsten Heins in a photo collage. (Globe and Mail photo illustration)

Former BlackBerry co-CEOs Jim Balsillie and Mike Lazaridis, and current CEO Thorsten Heins in a photo collage.

(Globe and Mail photo illustration)

Inside the fall of BlackBerry: How the smartphone inventor failed to adapt Add to ...

Mr. Balsillie, no longer an executive but still a board member, urged directors to reconsider, but they backed the new CEO. Mr. Balsillie couldn’t abide by the decision. He resigned from the board in late March, then sold all his stock. Few people knew the reason for his departure, including his long-time co-CEO, Mr. Lazaridis.

BlackBerry did launch a version of its BBM application last weekend for iPhones and Android devices, but simply as a stand-alone app. Andrew Bocking, the executive who oversees BBM, said that with built-in capabilities to have group chats, share photos, calendar items and other features, “it really takes BBM to a whole other level … I believe there is an opportunity for a dominant player in instant messaging and there will be one winner-take-all.”

To those who championed the SMS 2.0 strategy, most of them now gone, RIM should have been well on its way there already.

A fizzled launch

Finally, close to six years after Apple unveiled the iPhone, the long-awaited BlackBerry 10 made its debut at a glitzy launch event in January, featuring singer Alicia Keys as the company’s “global creative director.” It was a minor detail in a much larger story, but the made-up title and meaningless job irked some who wondered why the company was distracting itself with celebrity endorsements while in the fight of its life.

The Z10 device itself won a number of positive reviews. The New York Times’ David Pogue, who previously had predicted that the BlackBerry was doomed, began his review: “I’m sorry. I was wrong.” But eight months later, it’s hard to see the launch as anything other than a total business failure, given the sheer volume of unsold smartphones now written off.

The marketing campaign was confusing and vague: An ad that ran during the Super Bowl failed to explain what made the product distinct. A source close to the board said directors weren’t shown the ad before it ran, and some didn’t understand the content or the slogan, “Keep Moving.” There were no lineups, and no buzz for the product – nothing like the frenzy of publicity that seems to surround the launch of each new version of the iPhone.

Once again, the market had shifted, and there was little demand for the Z10 in an era where sophisticated operating systems were commonplace and phones were getting cheaper. The one advantage the BlackBerry may have had over its rivals – a physical keyboard – wasn’t present in the first model to hit the market.

“The only people still clamouring for a new smartphone from BlackBerry were in it for the keyboard,” said S&P’s Mr. Moorman. “Then they come out with a touchscreen. Anyone who wanted a touchscreen was already gone.”

As it turns out, both Mr. Balsillie and Mr. Lazaridis were proven right. It was hard enough to compete in a commoditizing smartphone market. Leading with the wrong product on top of that only made BlackBerry’s task more hopeless. Mr. Heins’s strategic errors only compounded the challenging situation he had inherited.

The product was difficult to sell for other reasons. One company insider said it could take close to an hour for young sales staff to demonstrate the product in dealer stores.

And many long-time BlackBerry users found that the new system was too different from the classic BlackBerry experience for their liking. Many of the little “moments of delight,” as they are called in the company, were forgotten or overlooked by the QNX developers who lacked ties to the company’s past. For example, users can’t hit “u” and look at the last unread message in their inbox, nor can they easily shift to the next or previous e-mail, as they could on older BlackBerrys. Pocket-dialling is a constant hazard.

Meanwhile, the company was slow to provide service to business users – such as helping them to transfer applications they had written for the old BlackBerry system. Software developers were left with dead-end investments after learning they would have to rewrite their apps for the new system if they wanted to remain part of the BlackBerry world. Many simply didn’t bother.

“The decisions we made over the last two years were made within the context of a volatile, competitive and ever-changing marketplace – and always with the goal of delivering the vital technology that our customers need,” Mr. Heins said in a written response to questions about the success of the BlackBerry 10 launch. While he called the launch “a significant accomplishment and one that involved the reinvention of our company,” he acknowledged it “did not meet our expectations.”

As for Mr. Lazaridis, he has not given up on the enterprise he founded 29 years ago.

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