In 2000, Michael Urlocker, a Canadian financial analyst, flew to Northern Europe to meet with the leaders of the world’s biggest cellphone companies.
He carried in his suitcase a new gadget he liked to show off — a pager that could also send and receive emails, something no other device could do at the time. The contraption was gifted to him by Research in Motion, a little-known tech company headquartered about an hour away from his Toronto office.
At Nokia’s head offices in Finland, Urlocker presented the device, called a BlackBerry, to company executives. They had heard of it and asked a few questions: Can it make calls? Is it a fax machine? Urlocker said no.
“They just said, ‘That’s a really interesting gadget. But it’s a toy,'” he said. “And when they said that to me, I knew that meant Nokia wasn’t going to compete against RIM for at least three years. And they had three to five years of clear headway against the biggest potential competitor.”
In the decade that followed, the little-known Canadian tech company usurped the likes of Nokia and Ericsson to take over the mobile phone industry while also ushering in the smartphone era that continues to this day. The BlackBerry became ubiquitous among the powerful, and everyone from Kim Kardashian to former President Barack Obama could be seen carrying the little phone with its beloved physical keyboard.
Research in Motion, later renamed BlackBerry, dominated the market and raked in billions, thanks to its trailblazing technology. But its precipitous rise would lead to a stunning fall.
On Jan. 4, BlackBerry shut down its remaining smartphone operations, ending support for devices still running its software or operating systems.
“As of this date, devices running these legacy services and software through either carrier or Wi-Fi connections will no longer reliably function, including for data, phone calls, SMS, and 9-1-1 functionality,” the company wrote on its website. “We thank our many loyal customers and partners over the years.”
Founded in 1984 by Mike Lazaridis, Research in Motion had its first headquarters in a strip mall in the small city of Waterloo, Ontario. Lazaridis, a young engineer from Canada’s automotive capital of Windsor, had been building gadgets since he was a child. At age 12, he won an award for reading every science book at the local library.
In an office space the size of a bachelor apartment, Lazaridis set out with a childhood friend to build a range of devices and technologies. Eventually, he would create a bar code reader for film editing that earned him an Academy Award and an Emmy Award in the 1990s.
But Lazaridis was more interested in wireless communications, particularly email.
“We knew email was going to be the foundation of business, that it’d replace fax,” he told Fortune in 2009. “We basically had to wait around and get ready.”
In 1992, RIM gained business savvy in the form of Jim Balsillie, a Canadian with an MBA from Harvard University who invested $125,000 in the company and became its co-CEO.
Four years later, RIM released its first two-way pager, the Inter@ctive 900, which had a small physical keyboard, combining the features of more traditional “beepers” with those of the then-popular PalmPilot organizer, all while adding email access to the mix. It reportedly ran on one AA battery that could last weeks.
In the years that immediately followed, RIM refined the technology and improved the marketing of its products, deciding on the name BlackBerry because of the device’s seedlike keyboard buttons, the Verge reported.
In 1999, Urlocker, the Canadian financial analyst, started covering RIM’s stock for Credit Suisse, giving the company a “buy” rating in his first report to clients.
“We see RIM as a high-risk, high-reward play on what could be the next PalmPilot,” wrote Urlocker, who covered the Canadian tech sector. “RIM has world-beating technology that may make it the leader in small, wireless devices.”
Urlocker also predicted that email, still an emerging technology at the time, would rise further in popularity, “making this the right time for a product like RIM’s.”
Eventually, the BlackBerry could make calls, and over the next few years, the devices took off — especially among business people and government officials, who appreciated its security, reliability, and long battery life. The old numbered models gave way to more colorful names — Bold, Curve, and Pearl, to name a few — and the low-resolution, colorless displays also gave way to brighter, vibrant screens.
In 2005, RIM added an instant messaging service called BlackBerry Messenger to its devices. BBM, as it was known, became ubiquitous, with people flooding Facebook feeds with the unique PINs that allowed them to connect with one another.
From Wall Street to Capitol Hill to Hollywood, anyone who was anyone in the aughts had a BlackBerry — even the president of the United States. In early 2009, Obama refused to abandon his BlackBerry when he entered the White House, and his unit was specially modified to increase security.
“BlackBerry really created the smartphone industry,” Canadian journalist Chuck Howitt, author of a book about RIM, told the National Post. “It doesn’t get as much credit as it deserves.”
But there was a new player in the smartphone field, something set to disrupt the market in the way BlackBerry had: the Apple iPhone. Steve Jobs revealed the device to the world in early 2007, calling it a “revolutionary product” that eclipsed its competitors.
It was the BlackBerry’s foil. Designed for entertainment, the first iPhone had weak security and battery life. But it was fun, like an iPod, with a camera and touch-screen keyboard. It eventually had an App Store, giving meteoric rise to games and social media platforms. In the way that people had grown addicted to their “CrackBerries,” a more extensive consumer base became obsessed with the likes of Angry Birds and Instagram in the years that followed the iPhone’s launch.
At the time, RIM showed little sign of slowing. In April 2007, the company recorded $930.4 million in revenue and a 66% hike in sales. But around 2008, Urlocker had a conversation with Lazaridis about the iPhone that would foreshadow BlackBerry’s massive failure years later despite the billions it was bringing in each quarter.
“He dismissed it as a toy,” Urlocker said.
“He was correct in many ways. It had very poor voice quality, which RIM cared about. It had no security or poor security. It didn’t have instantaneous email,” Urlocker said. “And there were, like, five or eight of these criteria that were so important to RIM. And it measured up on none of them. And he said, ‘It’s a toy.’ And when I heard him say that, I knew their goose was cooked.”
Balsillie’s public stance on the iPhone had been similar. He was “not losing sleep over Apple’s efforts to upend the wireless market,” the Toronto Star reported in 2007.
Urlocker said the iPhone’s early effect on BlackBerry sales was actually positive because it “created a tremendous stimulus to the demand for these types of smartphone products for at least a couple of years.”
But as BlackBerry tried to turn its focus away from the business market to the consumer one in response to the growing popularity of the iPhone and Android phones, red flags started to appear. Eventually, the “minor misses” started to add up, Urlocker said.
“RIM had a window where it could have responded,” Howitt, author of BlackBerry Town, told the National Post. “But it didn’t act quickly enough, and by the time they brought out some decent touch screens to compete, it was too late.”
In 2010, Urlocker became the first Canadian analyst to downgrade RIM’s stock, issuing what he said the business world considered a “very brutal condemnation of the company.”
In his report, Urlocker, a former newspaper reporter, said RIM “should continue to grow because of its strong brand and loyal BlackBerry customers” but that its long-term success was in question, and he warned that “RIM may grow to ultimately serve only a niche market.”
“In our view, the smartphone market is evolving, but there are clear signs that consumers are looking for more than just email on their phones,” wrote Urlocker, who by that time was working with another firm. “The success of the iPhone in the past two years and the early sales of Motorola’s Droid at Verizon in the past few months suggest that consumers are looking for entertaining, customizable fun phones.”
Urlocker said the report was met with criticism from RIM and some of its investors. “There’s a reason why executives were not influenced by the warning signs that said they were in trouble,” Urlocker said. “Because it’s hard to argue you’re doing something wrong when you’re making a billion in cash every quarter.”
With an atypical dual-CEO management structure and mounting pressure on the company, RIM also experienced internal problems. In 2011, tech news site BGR published an open letter from a “high-level” RIM employee that signaled stagnation and dysfunction within the company. The anonymous writer pleaded with Balsillie and Lazaridis to make significant changes to RIM’s vision and structure and said the letter “reflects the feeling across a huge percentage of your employee base.”
At its peak in 2010, BlackBerry held a 43% share of the smartphone market, ahead of Apple and Google. By 2013, that share had dropped to 5.9%, according to Comscore. Facing billion-dollar losses, the company announced it would lay off 4,500 employees. That same year, its stock price plummeted to single digits.
By then, Lazaridis and Balsillie had resigned as CEOs, and in 2016, BlackBerry announced it would no longer be making smartphones, focusing on software instead. Today, the company says it “provides intelligent security software and services to enterprises and governments around the world.”
Urlocker, who covered RIM for more than a decade, said Lazaridis and Balsillie “achieved heights for BlackBerry that were unbelievable” and experienced “phenomenal success.” But it wasn’t meant to last.
“They disrupted the market,” he said. “And they were disrupted.”
