Losing The Signal: The Untold Story Behind The Extraordinary Rise And Spectacular Fall Of BlackBerry, McNish & Silcoff - B+

                In October, 2011, the two top executives of Research In Motion (RIM) were in Canada and Dubai when they spoke on their Blackberry's. Under attack from Apple and Samsung, rising competitors in the mobile phone space, RIM was reeling and a 3 day outage caused by a server collapse in England would prove to be the beginning of the end.  

               Jim Balsillie was raised in Quebec. Brilliant and ambitious, he set his sights on the University of Toronto and Harvard Business School. After graduating from both, he turned down Wall Street, and returned home to run a small manufacturing business. Mike Lazaridis, from Windsor was a superb scientist who dropped out of the University of Waterloo to start a computer software company with a friend, and in 1984 incorporated Research In Motion. In the early 1990's when Balsillie's firm was acquired, he took his severance money, invested in, and became a partner of Lazaridis' at RIM. Their goal was to create a wireless data transmission device. In the 1990's, they wrote software, manufactured modems, and tried to keep the business going. With a new chip that Intel made for them, RIM was able to build an interactive two way pager in 1997.  The Bullfrog worked in a demonstration for Bell South, but never did again. The Leapfrog followed, and Bell South placed a $50M order. They were able to go public later that year.

                      

               Lazaridis continued working on a modern, simple mobile device that could handle emails. He desired the utility of a laptop in one's hand. The device would be called a BlackBerry. The Blackberry's ability to check office emails at a time when two way paging was trendy was revolutionary. And it began to catch fire, not with gear heads, but with big time businessmen, bankers, and lawyers. Soon, everyone wanted one. Bill Gates and Jack Welch were early champions. It changed the world of email as instantaneous responses were now expected. 'Fortune' named it a "cult brand." A Nasdaq listing raised more capital, and soon the co-CEO's were billionaires. They passed Palm, Nokia, Ericsson, and Motorola to take the lead in personal digital assistants. On September 11th, the fact that they were the only network functioning added to their cachet. Washington was so impressed that each member of Congress was issued a BlackBerry.

             Soon thereafter, they added voice and offered a full-fledged smartphone. In 2003, Oprah endorsed the phone and BlackBerry moved into the consumer market. Within a few years, they were at the top of the telephone pyramid, sitting on top of the world.

             In January 2007, Steve Jobs introduced the iPhone to the world. Apple partnered with Cingular Wireless, recently acquired by ATT, to offer full data and internet access that no carrier had ever allowed before. Plus, the 'Jesus phone' was sleek and stunning compared to all that preceded it. RIM had just spent five years of management distraction fighting a patent infringement case in the US that cost in excess of a $600M settlement. Right after the iPhone introduction, the two co-CEO's were faced with both American and Canadian investigations into the backdating of options. Lazaridis, the pure technician and computer expert, felt blindsided by the mess that he believed was in Balsillie's domain. Then, when he took apart the iPhone, he was flabbergasted. Apple was offering the internet on a phone; they were offering email. RIM responded by assuring their carrier partners, Verizon and Vodafone, that they would deliver a touch phone in nine months. The iPhone was growing by leaps and bounds, and beginning to take away their share. Lazaridis delivered the BlackBerry Storm, but it was not ready for prime time. A NYT tech reviewer said "it had more bugs than a summer picnic."

           In early 2009, the Ontario Securities Commission penalized RIM and its two co-CEO's.  Balsillie was subjected to a more severe penalty, and for the first time, the two men began to drift apart. Verizon told Balsillie that almost all of the millions of Storms sold were defective, had to be repaired and demanded $500M from RIM. The company was in a major crisis, notwithstanding that it was still the fastest growing company in the world.  Lazaridis went back to the lab. He concluded that RIM had to move away from Java, and find a new operating system. He told Balsillie that "very few companies have ever survived a platform change." However, when Verizon told him they were implementing a new 4G system, RIM did not have an answer or a product. They began working on a tablet that they called PlayBook, but Apple trumped them with the iPad. RIM was losing badly in the US, but still amazingly successful in the emerging world where 4G was a distant pipe dream. The company continued to increase revenue and profits, but with an aging product line. 

           When 2011 Q1 earnings showed a material decline in revenue leading to a dramatic drop in the company's stock price,  the company began layoffs and the shareholders called for the removal of the co-CEO's. The 3 day server collapse in October of 2011 caused all BlackBerrys worldwide to go dark, and shocked the tech world. In January 2012, the two man team that had built Research In Motion announced their joint retirement.

            "If the rise and fall of BlackBerry teaches us anything it that the race for innovation has no finish line, and that winners and losers can change places in an instant." This is truly fascinating story that is very well told. Thanks to my friend David Gutowski for  another excellent recommendation.