How BlackBerry Blew it with Their Biggest Customer

Losing the Signal

So I’m going to be away for a few weeks—after I post the news round-up later today you won’t hear from me again until Monday, November 21st. As a parting gift I’d like to share an excerpt from a fantastic book I’ve just finished, Losing The Signal: The Spectacular Rise and Fall of BlackBerry. Whether or not it qualifies as a Halloween ghost story isn’t for me to decide.

I’ll set the stage for you: The year is 2010, and a delegation of RIM executives is at Mobile World Congress to meet with Verizon, their biggest carrier partner. Their relationship by that point is already strained, and Verizon is doing quite well with the Moto Droid. Anyway, in preparation for the rollout of their new 4G network the carrier is meeting with OEMs to see what 4G-capable hardware they have available.

To borrow a hackneyed phrase from BuzzFeed, you won’t believe what happens next!

Verizon Wireless’s marketing vice president, Jeff Dietel, ushered Lazaridis, McLennan, RIM handset boss Thorsten Heins, and the CEO’s chief technology adviser, radio engineer Mark Pecen, into a hotel meeting room where a half dozen Verizon counterparts awaited them.

Lazaridis had no 4G devices to show them. Instead, he told the Verizon team he didn’t think the carrier could pull off its 4G plans. It would be difficult to do the network upgrade based on its existing technology, he said, because that would require its network technology supplier Qualcomm to make a heavy investment of its own. “My message was that I thought that 4G was amazing,” says Lazaridis. “I thought 4G was going to happen. I just didn’t believe there was a need for us to build 4G devices to work [with Verizon’s existing technology] ever. I thought when they go to [4G] they would phase out” their existing technology standard, known as CDMA, in favor of an updated technology better suited to 4G. Lazaridis had long harbored doubts about CDMA and couldn’t foresee how RIM could build a device for such a network. RIM had no existing products large enough to fit the chipsets and antennae required for 4G. It would have to make much bigger devices, and they would burn up batteries quickly and cost $100 more each to produce. “It was an ugly solution. It was big. Lot of parts,” says Lazaridis. RIM had been testing a 4G phone in its lab, but Lazaridis didn’t like its battery performance and had the project stopped.

As Lazaridis and his network specialist Mark Pecen spoke, McLennan could see the Verizon team getting impatient. Lazaridis was not telling the carrier team what they wanted to hear.

That’s right… Verizon wanted a 4G BlackBerry and instead got a lecture about why a 4G BlackBerry was a bad idea. Over the course of the next year the carrier would realign its massive marketing budget away from BlackBerry and more towards 4G products—and eventually, the iPhone.

That’s but a sample of the many mobile insights in the book, assembled from hours of interviews with the founders of RIM and other key company executives. If you’re a student of smartphone history I can’t recommend it highly enough.

Losing The Signal: The Spectacular Rise and Fall of BlackBerry on Amazon Canada / Amazon USA

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