Waterloo’s Waterloo: As iPhone soars, BlackBerry’s disdain for the user brings it down

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Massive layoffs at Waterloo-based BlackBerry (formerly RIM) can hardly be surprising to anyone even passively following the mobile industry over the past few years, as iPhone, Android, and even Windows Phone devices chewed up a market once securely held by the little beeper company that could.

BlackBerry’s fall, which began when the iPhone was launched in 2007, is a story of hubris, but it’s also the age-old business story of it just being really, really hard for incumbents to evolve through industry disruption.

In 2008, I had a chance to do a sit down interview with Mike Lazaridis, then co-chief executive of BlackBerry. He laid out RIM’s history, starting out as a beeper company that worked closely with government agencies and offered a strong focus on security, messaging, and battery life.

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That trifecta was ingrained into the company’s DNA, leading it to showdowns with foreign governments that wanted access to its closely guarded messaging backbone, and that focus made it a hit among large enterprise companies and, particularly, IT departments.

The strategy worked great as smartphones started to climb in popularity — at least as long as companies assigned the phones their employees received. But when employees pushed back and either brought their own phones into the workplace or successfully lobbied for Android and iPhone phones, BlackBerry’s neglect of the user experience, and particularly their neglect of which technologies were on the rise, ultimately unseated them.

Even in 2008, their disdain for the non-technical buyer was somewhat palpable. From my interview then:

RIM is first and foremost a company that solves business problems, he said, which may explain the frustration he expressed when asked why the iPhone generates excitement that the BlackBerry hasn’t been able to match.

“Talk — all I’m [hearing] is talk about it,” he said, dismissing the iPhone’s chances in the enterprise. “I think it’s important that we put this thing in perspective.”

He said iPhone penetration remains low, with Nokia’s N95 more than doubling iPhone European sales, although the N95 costs twice as much.

“I think the iPhone has a great deal of appeal to a certain class of users,” he said, adding that Apple’s design-centric approach would ultimately limit its appeal by sacrificing needed enterprise functionality. “I think over-focus on one blinds you to the value of the other.”

But if Apple sacrificed enterprise functionality, BlackBerry sacrificed ease of use and an ecosystem that promised users, “There’s an app for that.” Lazaridis openly mocked the touchscreen, and when BlackBerry belatedly launched its own touchscreen phone, it was clunky and non-responsive. The unique features it did have (a “haptic feedback” system that vibrated the phone each time you tapped) were not anything most users were actually interested in.

And so we have Waterloo’s Waterloo: BlackBerry failing even as iPhone devices sell out and go for over $1,500 on eBay. In this case, in the battle between big corporate interests and the little guy, it was the focus on the little guy that won, leaving Tim Cook and Apple smiling all the way to the bank.