BlackBerry's Fall: From Executive Essential to Market Extinction

In the early 2000s, if you carried a BlackBerry in your pocket, everyone knew you mattered. Lawyers in New York, bankers in London, politicians in Washington checked theirs constantly—the device had become a status symbol and a necessity all at once. The physical vibration announcing a new email became muscle memory for millions of executives. Someone coined the nickname without planning to: CrackBerry. The comparison to the drug was apt. Once you started, stopping felt impossible.

The story began in 1984 in Waterloo, Ontario, a mid-sized Canadian city known mainly for its engineering school, not for birthing technology empires. Mike Lazaridis, son of Greek immigrants with an early gift for electronics, and Douglas Fregin founded Research In Motion with $600,000 from a General Motors contract Lazaridis had secured before even graduating. They were building barcode-reading technology for the film industry. For years, RIM worked in obscurity on wireless networks and paging systems that almost no one outside the company knew existed. The turning point came in 1992 when Jim Balsillie arrived with $125,000 of his own money and a Harvard degree. While Lazaridis built the technology, Balsillie handled the outside world and the money. It was the partnership that would make them both rich.

In the late 1990s, RIM signed a deal with Ericsson's Mobitex wireless network and developed two-way pagers at a moment when most people barely used email. The first true BlackBerry launched in 1999. Three years later came the 5810, combining phone and email in one device. The name came from a marketing team member who looked at the small keyboard with its tightly packed buttons and said they resembled blackberry seeds. The name stuck.

Between 2003 and 2007, BlackBerry subscribers exploded from under one million to more than eight million. RIM's stock on the Toronto Exchange turned early investors into millionaires. By the fourth quarter of 2009, the company controlled 20 percent of the global smartphone market. In the United States alone, it held nearly 50 percent. RIM was worth more than Canada's major banks combined. Lazaridis and Balsillie appeared on magazine covers and collected awards. It was the peak.

Then Steve Jobs walked onto a stage in San Francisco on January 9, 2007, dressed in black, and showed the world the iPhone. He called it three devices in one: an iPod with a touchscreen, a phone, and an internet device. Then he said it was actually one device. The audience applauded. In Waterloo, Lazaridis and Balsillie watched with contempt. Lazaridis insisted you couldn't type comfortably on glass, that professionals needed a physical keyboard, that Apple had made a toy for ordinary consumers. Balsillie dismissed the iPhone as no threat to the corporate market RIM owned. For a while, the numbers seemed to prove them right. RIM's market share kept climbing through 2007, 2008, and 2009. What those numbers hid was where the growth came from: emerging markets and old corporate contracts signed years earlier. Meanwhile, on college campuses and in San Francisco bars, the iPhone had already changed what people expected from a phone. Android arrived in 2008 with Google's backing and dozens of manufacturers hungry for market share. RIM didn't yet understand what was coming.

The company's first real response was the BlackBerry Storm, launched in November 2008. Pressured by media and business partners to answer the iPhone, RIM released something unfinished. The Storm had a touchscreen, but it used a system called SurePress that forced users to press the glass like a mechanical key. It was slow and imprecise. Technology reviewers eviscerated it. Returns at Verizon reached unexpected levels. Hundreds of thousands of units sat in warehouses unclaimed. Rather than pause and reassess, RIM's leadership minimized the failure, restated promises about the future, and moved forward. Inside Waterloo's offices, the relationship between the two co-directors deteriorated. Balsillie spent time and energy on negotiations to acquire ice hockey franchises in the United States while the SEC investigated RIM for irregularities in stock option grants to executives.

The BlackBerry Torch arrived in 2010 with a sliding physical keyboard and touchscreen—a design trying to satisfy two types of users at once and satisfying neither. AT&T sold 150,000 units in the first week. In the same period, the latest iPhone surpassed 1.7 million sales. RIM's share of the American market, which had hovered near 50 percent, fell to 35.8 percent and kept falling. The stock price, which had topped 140 Canadian dollars, began a descent with no visible floor. In October 2011, BlackBerry's central servers failed, leaving millions without email or messaging for more than three days. The outage hit Europe, North America, Latin America, and the Middle East simultaneously. Entire companies lost communication. RIM's response was slow and poorly managed. In those dark days, many corporate executives—the foundation of BlackBerry's business—began seriously considering options they had never entertained before.

By 2013, Lazaridis and Balsillie had both resigned. The company launched BlackBerry 10 as its final technological bet. It arrived too late and without enough applications to compete. By 2016, BlackBerry's global smartphone market share was exactly 0.0 percent. The company stopped making its own devices, licensed the brand to outside manufacturers for a time, then abandoned the phone business entirely to become a corporate cybersecurity software company. The firm that in 2009 was worth more than all of Canada's major banks combined now operates in a cybersecurity niche that few people mention. The BlackBerry name survives. But the phone that for years meant power and urgency stopped being manufactured nearly a decade ago. Waterloo remains the same quiet city it always was.