It went to consumers in mid-2007. Naturally the share price of RIM (Blackberry) responded ....
Responded,that is, by going up. Way up.
A year later the App Store was online and, with iOS 2, the iPhone was truly useable. Most importantly, Apple licensed Microsoft's ActiveSync. The iPhone could now get corporate calendars and email.
That's when the market finally saw the light and RIMM slid, but, then astoundingly, it mostly recovered!
No wonder RIM's CEOs could delude themselves into thinking they still had a business. The market was a delusional as they were. It wasn't just the market and a couple of overpriced executives. Pundits continued to talk about RIM as though they were a serious contender against Android and iOS.
I thought RIM was finished. It didn't matter how much money they were making. They had a first class horse drawn carriage, but Apple was selling a BMW sedan for a trifle more. It was insane to imagine that RIM, owners of a 1980s PalmOS-style vintage platform, could possibly compete. Now it's obviously over and the big guys will fight for RIM's patents.
It's an interesting story -- because the market lagged reality by so much. Why was it so irrational? I'm sure we can make up post-hoc explanations. Maybe the market assumed Microsoft would buy them, and only gave up when Ballmer "acquired" Nokia (hope that goes better than Skype will go).
Myself, I suspect the market is frequently irrational. Every exec had a BB, and because of the way RIM licensed RIM server access it was a real power symbol. Plebes carried flip phones, executives carried BBs. When plebes started carrying iPhones execs couldn't wrap their heads around the power inversion. To sell RIM was to admit their personal power token had gone the way of the typewriter.
RIMM has one more lesson to teach us. Today a remarkably hopeful but anonymous RIM employee published a roadmap for RIM's recovery. It will be familiar reading to anyone who's ever been a part of a dying software enterprise. It came with 8 recommendations - but four of them caught my attention.
- Focus on the users, not the buyers.
RIM sold their phones to carriers. Sprint, AT&T, Verizon and the like. We know them well -- we hate them, they hate us. Selling to the buyer is standard business practice, but it's also a trap. RIM fell into that trap, Apple, astoundingly, did not.
- Have senior executives that live and breathe the making of software.
Most IT businesses are run by MBAs and generic executives. People who know business, but don't know the product. RIM went that way.
Cut everything but the core. Hang the cost of cutting. Do it.
- Focus on the ecosystem.
In this case, developers. Sometimes this is a consultant network.
RIM's marketing department responded to the letter. They are so, so dead.