Speaker 1: Brought to you by the reinvented two thousand twelve Camray.
Speaker 1: It's ready. Are you get in touch with technology? With
Speaker 1: tech Stuff from how stuff works dot com. Hello everyone,
Speaker 1: welcome to tech stuff. My name is Chris Billett, and
Speaker 1: I am an editor at how stuff works dot com.
Speaker 1: Sitting across from me, as he always does when when
Speaker 1: you record podcasts, and occasionally other times, his senior writer
Speaker 1: Jonathan Strickland, he could play a guitar just like he
Speaker 1: was ringing a bell. Nice of you to be good. Yeah,
Speaker 1: so you gotta you gotta make a leap on that one.
Speaker 1: It's not just the song. Who who made that song famous?
Speaker 1: And what was that guy's name? And now it makes sense,
Speaker 1: we're gonna talk about the story of m Yes, and uh,
Speaker 1: you know, I think RIM is a less famous name
Speaker 1: than the name of its flagship product. But we are
Speaker 1: talking about Research in Motion, which is a Canadian company. Uh,
Speaker 1: several people have written in to ask us if we
Speaker 1: could talk about it. Yeah, lots of lots of people
Speaker 1: were interested in this, and we've referred to RIM quite
Speaker 1: a few times in other podcasts. Because the flagship product
Speaker 1: that Chris was alluding to is the BlackBerry, which is
Speaker 1: one of the smartphones that really kind of uh well, really,
Speaker 1: the BlackBerry was the smartphone for the longest time. I mean,
Speaker 1: the BlackBerry line was pretty much the smartphone that everyone
Speaker 1: was familiar with and very few people outside of the
Speaker 1: corporate world owned. But uh, you know, RIM became famous
Speaker 1: because they had the company had this line of smartphones
Speaker 1: and they had kind of a almost a lock on
Speaker 1: the smartphone market. I mean really the only major competitor
Speaker 1: in the United States anyway, and other parts of the
Speaker 1: world that was different, but in the United States, the
Speaker 1: other major competitor was Palm. Yes, so you had like
Speaker 1: the Palm Trio and then you had the BlackBerry, and
Speaker 1: you had people who were fanatically devoted to either, although
Speaker 1: BlackBerry again still had more of a corporate kind of
Speaker 1: culture to it because they RIM had incorporated the Microsoft
Speaker 1: Exchange server software in the BlackBerry form factor very early on,
Speaker 1: so it was very useful for anyone who worked for
Speaker 1: a company that used Microsoft Exchange servers, and that's quite
Speaker 1: a few of them. Of course, lots of people are
Speaker 1: using lots of companies are using Outlook essentially as their
Speaker 1: main male feature that you know, there are other companies
Speaker 1: that use different servers for email, but the Microsoft Exchange
Speaker 1: server is incredibly popular. But before we get into all
Speaker 1: of that, we kind of need to go and talk
Speaker 1: about the founding of this company, which goes all the
Speaker 1: way back to nine Yeah. Yeah, now of course, uh
Speaker 1: actually in in in a way, it goes back a
Speaker 1: little farther than that, um, you know, and you'd have
Speaker 1: to look to the University of Waterloo in Ontario, Canada.
Speaker 1: And basically, uh, there was a student there named Mike
Speaker 1: Lazaridis and uh you know he was he was into
Speaker 1: electrical engineering. He was in a computer science and uh
Speaker 1: he had been working with a company that, uh, maybe
Speaker 1: we should talk about in the future. I don't know,
Speaker 1: Control Data UM, long known as a one of the
Speaker 1: computer pioneers UM, and he had been working with that
Speaker 1: that company when he was in college. UM. But basically
Speaker 1: he was working on a way to uh on a
Speaker 1: on a project called budget And no, I'm not talking
Speaker 1: about the percussionist for Susie and the benches thinking of
Speaker 1: a bird or or that either it actually was a
Speaker 1: way to display information on TVs UM and uh. He
Speaker 1: he like many of the people we have talked about
Speaker 1: when we talked about the tech pioneers. Came up with
Speaker 1: this idea even before he UH finished school, and he
Speaker 1: dropped out of the University of Water before before finishing school,
Speaker 1: which makes him very similar to other pioneers that we've
Speaker 1: talked about, Yes and so, UM and so he basically
Speaker 1: decided to UH to give it a go and and
Speaker 1: leave school, and UH came up with a company named
Speaker 1: Paradigm Research, except that name was already taken UM and
Speaker 1: they were trying. He tried several different names, ended up
Speaker 1: with inspired by the the phrase poetry in motion, decided
Speaker 1: to go with Research in Motion and the company was,
Speaker 1: as Jonathan pointed out, officially became incorporated officially on March
Speaker 1: seventh night. Four Yeah. He received a essentially a loan
Speaker 1: from the Canadian government to help this, and he also
Speaker 1: had money invested by family and friends. UH. He and
Speaker 1: a fellow student, fellow by the name of Douglas Freegan
Speaker 1: founded this company together. UM. Freagan became the vice president
Speaker 1: of operations. UH Lazarides became the president and CEO UM
Speaker 1: and UH and interestingly enough, we're back just to jump
Speaker 1: ahead just very quickly. A. Lazarides is still a CEO
Speaker 1: of rem it's RIM's got an interesting corporate structure and
Speaker 1: that it has two CEOs. And we'll get into more
Speaker 1: about that in a few, um, a few minutes when
Speaker 1: we jump ahead in in RIM's history, now after the founding,
Speaker 1: what's the next piece of information you have? Because I
Speaker 1: jump ahead quite a few years, well four years? Well
Speaker 1: they Uh, the thing is, um, the budgee didn't take
Speaker 1: off at all, Um, but General Motors needed some LED
Speaker 1: notification systems for their assembly lines. And uh, you know,
Speaker 1: as you might guess, General Motors, especially back in the
Speaker 1: nineteen eighties, would have been a huge corporate client. UM.
Speaker 1: And that was his success, the CDs one system. And
Speaker 1: this was General Motors of Canada. Yeah, so it was
Speaker 1: the Canadian Canadian branch of General Motors. There are quite
Speaker 1: a few plants up there, or were We're at that point.
Speaker 1: They've closed a couple, I think, Um, someone will right
Speaker 1: in and tell me that it's a lot of them.
Speaker 1: I'm sure, but um, and the National Film Board of
Speaker 1: Canada did you know about this? Uh? They needed a
Speaker 1: system for UH synchronizing film editing, and uh RIM built
Speaker 1: a system for them and it actually won an Academy award.
Speaker 1: Is this the digit sink I believe, so the digit
Speaker 1: sinc film key code reader that was actually that took
Speaker 1: a few years too to be introduced, That wasn't didn't
Speaker 1: really hit the market til nineteen. But yeah, REM won
Speaker 1: both an Oscar and an Emmy for this technology. Uh.
Speaker 1: And here's the interesting thing. You start hearing this where
Speaker 1: you know, here we are talking about uh film key
Speaker 1: code readers and and and displays in an industrial automation
Speaker 1: and you're thinking, wait a minute, that doesn't sound like
Speaker 1: a smartphone at all. Well, you're right. Uh, the early
Speaker 1: days of REM, we're not focused specifically on bringing uh
Speaker 1: telecommunications devices to market that you know, it was more
Speaker 1: of a kind of a general purpose research technology firm.
Speaker 1: And so you know, these early days that that kind
Speaker 1: of I don't know, you might want to call it
Speaker 1: a lack of focus, or you may just call it
Speaker 1: that they were being very versatile. Uh, they were diversified, yes,
Speaker 1: diversified good. Yes, they were taking a proactive stance. Um. Yeah,
Speaker 1: it was interesting that they weren't really focused on telecommunications.
Speaker 1: Now now in nine so you know ninety they've they've
Speaker 1: introduced the key code reader. But just a couple of
Speaker 1: years earlier, RIM became the first wireless data technology developer
Speaker 1: in North America and the first company outside of Scandinavia
Speaker 1: to create connectivity products for the mobile texts UH network
Speaker 1: wireless network. Now this was a a wireless network. They
Speaker 1: used radio frequencies. Uh. You is the packet data switching method,
Speaker 1: which we've talked about before in this podcast. You know,
Speaker 1: the way that you send data through packets, but in
Speaker 1: instead of it just being through a wire where you know,
Speaker 1: you would send us through u uh pulses of electricity,
Speaker 1: this would be through radio frequencies and UM, so mobile
Speaker 1: text is that was a data only actually is a
Speaker 1: data only wireless packet switching network. So it wasn't designed
Speaker 1: to carry voice communication. It was just data communication. And
Speaker 1: the earliest products that that RIM focused on weren't consumer products.
Speaker 1: They were all retail products, enterprise products of stuff for
Speaker 1: point of point of sales terminals UH to allow point
Speaker 1: of sales terminals to send information wirelessly to some other machine.
Speaker 1: So again not not like something that you would immediately say, Wow,
Speaker 1: that's that's really awesome. I can't wait to get my
Speaker 1: hands on it, because it just wasn't meant for the
Speaker 1: general consumer. Yeah, well, of course, the business to business
Speaker 1: market is uh can be very very lucrative. Um. And
Speaker 1: at the point, you know, we're talking about the late
Speaker 1: nineteen eighties, early nineteen nineties, Uh not everyone had a
Speaker 1: cell phone. I mean they were they you know, these
Speaker 1: mobile products, and a lot of people had pagers, uh
Speaker 1: in the early nineties and um, of course in in
Speaker 1: the early nineties, that's that's sort of what RIM got into.
Speaker 1: They started looking at the possibilities of two way wireless communications. Yeah,
Speaker 1: that was one of the things they started to really
Speaker 1: research once they got involved in the mobi tex network.
Speaker 1: Now in in nineteen uh so in the introduced the
Speaker 1: mobi Tex Protocol converter, which was the device that allowed
Speaker 1: them to create these products that would allow them to
Speaker 1: to tag on a converter box onto a an existing
Speaker 1: point of sales terminal. Yea. So it's kind of like
Speaker 1: an adapter that you could plug into your system and
Speaker 1: use the equipment you already have, um to have this
Speaker 1: wireless connectivity. Again, just an enterprise sort of thing, a
Speaker 1: retail sort of thing, not a not a consumer thing. Yeah.
Speaker 1: Point of sale is is like at the cash register itself, Yes,
Speaker 1: where you're actually going to buy something. And then in
Speaker 1: another person joins RIM. And this is someone who will
Speaker 1: become very important. It's Jim Bassily and so. And at
Speaker 1: this point, the the CEO role is divided in twain.
Speaker 1: Lazaridis is in charge of things like product development and
Speaker 1: research and Bassilely was sort of the the the financial
Speaker 1: guy and the business development guy, because those two parts
Speaker 1: of the CEO role, you know, just didn't didn't really
Speaker 1: the lazardis wasn't comfortable filling both of those parts of
Speaker 1: the role. He didn't think that he had the financial
Speaker 1: acumen to be able to do this effectively. He thought
Speaker 1: that there'd be a better way of leading this company.
Speaker 1: And so that was Bassili's role when he came on.
Speaker 1: And the two are still co c e O s
Speaker 1: And that has actually led to some criticism of RIM
Speaker 1: throughout its history, but really that criticism has wrapped up
Speaker 1: quite a bit in and we'll we'll talk about that
Speaker 1: when we get a little further in. Yes, Mr Bassili
Speaker 1: actually put a quarter of a million dollars of his
Speaker 1: own money uh into RIM at that point, so that
Speaker 1: was a pretty substantial investment. Wouldn't be the first time
Speaker 1: he would have to pay but we'll get into that too.
Speaker 1: That that that's a there was. Rims also had a
Speaker 1: history of some pretty nasty legal battles, but that's that's
Speaker 1: in the late nineties and further on. Yeah, as a
Speaker 1: matter of fact, a couple of the timelines that I
Speaker 1: looked at, we're almost all about the legal battles. Yeah. No,
Speaker 1: there's a there's a stretch in the two thousand era
Speaker 1: where that's you know, there was no focus on the
Speaker 1: actual products, at least in the research I looked at
Speaker 1: as well. So in UH in ninety four we've got
Speaker 1: RIM offering its own point of sales terminal. So now
Speaker 1: now the technology has been incorporated directly into UH into
Speaker 1: terminals so that people can companies can buy them directly
Speaker 1: from RIM and they don't have to try and incorporate
Speaker 1: one technology with another. UH. And then in nine RIM
Speaker 1: introduces the Freedom, which is a pc m c I
Speaker 1: a radio modem for computers. PC m c I A
Speaker 1: stands for Personal Computer Memory Card. International Association has several
Speaker 1: different types of cards, some of which are used to
Speaker 1: add memory to a computer, but the type two pc
Speaker 1: m c I a card is meant as a modem card. Right,
Speaker 1: So It's basically a a a card that you plug
Speaker 1: into the insides of your computer. Ye, mainly laptops. Actually,
Speaker 1: a lot of laptops had expansion ports that you could
Speaker 1: you could plug a card into that one expansion port
Speaker 1: and it would allow you to do whatever, you know,
Speaker 1: increase the memory. And in this case, what it was
Speaker 1: doing is it was giving you a radio modem so
Speaker 1: that you can have wireless connectivity with your laptop, which
Speaker 1: was you know, that was a pretty new thing. There
Speaker 1: weren't a whole lot of solutions out there, and so
Speaker 1: RIM was kind of getting into that. And in nineties six,
Speaker 1: RIM introduced the interactive pager, which is probably the most
Speaker 1: one of the most irritating lee spelled products of all time.
Speaker 1: Why because it has an act sign for the instead
Speaker 1: of a so that that irritates me. Well it um.
Speaker 1: It was sort of a revolutionary product. It's time though,
Speaker 1: because most pagers, uh, you know, we're one way. Yeah.
Speaker 1: It meant that if you had a pager, you could
Speaker 1: receive messages on it, and that's all you could do.
Speaker 1: You could you could read through all those messages. But
Speaker 1: if someone sent you a page, you know, you would
Speaker 1: look down you see, oh, I've got a message from
Speaker 1: so and so, you put the pager down, you pick
Speaker 1: up a phone, you call that person and you know,
Speaker 1: have a discussion and rim. Because of its research in
Speaker 1: two way communication on the mob Tex network had come
Speaker 1: up with a way of creating a two way messaging service,
Speaker 1: and the Interactive pager would let you do this. You
Speaker 1: would have a it had a quarty keyboard, and it
Speaker 1: had a little bitty screen that could show up to
Speaker 1: four lines of text and you could get a message
Speaker 1: from someone and you could send a message back. So
Speaker 1: essentially your text messaging. That's that's what this technology allowed
Speaker 1: you to do, which was new. This was not something
Speaker 1: that was generally seen around this time. So suddenly you
Speaker 1: could get a pager that would allow you to do
Speaker 1: more communication where you wouldn't necessarily have to go and
Speaker 1: find a phone or or carry, you know, a cell phone.
Speaker 1: Along with the pager, you could actually communicate with people,
Speaker 1: assuming that they had a device that you know, a pager,
Speaker 1: that they could use to read the message you're sending them.
Speaker 1: Otherwise it's still all one way, um and it do
Speaker 1: you know how much it costs? No? Actually I don't
Speaker 1: know that, Okay, So it's a two way pager. It
Speaker 1: also had all the functions of a one way pager,
Speaker 1: so it's not like it's you know, limited to that,
Speaker 1: but a two way pager text only four lines of
Speaker 1: text per screen. SI And that's not including the service fee.
Speaker 1: That's that's the price of the product itself. So if
Speaker 1: you think about that, a six hundred and seventy five
Speaker 1: dollar two way pager, that's you know, that's that's a
Speaker 1: chunk of change, especially when you can go out and
Speaker 1: buy a fully featured smartphone without a contract for around
Speaker 1: that same amount. I mean, that's pretty impressive. It's a
Speaker 1: different world we live in now. Yeah. Yeah, and from
Speaker 1: I've never actually seen one of these in person. I've
Speaker 1: seen photos online, but from what I've read, it was
Speaker 1: also a very large device, yeah, compared to especially compared
Speaker 1: to today's technology. It was. It was sometimes called the
Speaker 1: Rim nine hundred because that's how many pounds it weighed. No, no,
Speaker 1: it was. But but it had a flip top, you know,
Speaker 1: you would talk, you would lift the lid up and
Speaker 1: that had the screen on it. Then you had the
Speaker 1: full quarty keyboard beneath you folded it down. It was
Speaker 1: like a brick and uh yeah it was it was big,
Speaker 1: um and it but it kind of paved the way
Speaker 1: for RIM's future. So in ven, this is the year
Speaker 1: after they've introduced the interactive pager, RIM becomes a publicly
Speaker 1: traded company on the Toronto Stock Exchange. Right, that helped
Speaker 1: him raise quite a bit of money, about well more
Speaker 1: than a hundred and fifteen million dollars um. Which when
Speaker 1: you're a company that's that's getting its foothold, that that's
Speaker 1: a lot of money. Yeah, that's that's a ton yeah. Yeah.
Speaker 1: And so RIM joins the other Toronto Stock Exchange staples
Speaker 1: like poutine and then in what Canadians are Too Nice
Speaker 1: to be mean to Me? I Love Poutine. In ninety eight,
Speaker 1: Rim introduces the nine fifty wireless handheld device. Now, this
Speaker 1: one is a much smaller to a pager. This is
Speaker 1: the one that a lot of people remember when they
Speaker 1: think back to the old RIM pagers. This is this
Speaker 1: is the form factor that was really familiar to them.
Speaker 1: Um and it also introduced, uh they licensed to technology
Speaker 1: from Puma Technology, the Intel Osinc synchronization platform, which actually
Speaker 1: allowed for sinking with the device, and before that it
Speaker 1: didn't have that capability. So now this two way pager
Speaker 1: has sinking capabilities, so you can sink it with another device,
Speaker 1: and it also could run applications written in CE language.
Speaker 1: Um oh, and I guess we can take just a
Speaker 1: brief moment and and acknowledge the fact that the week
Speaker 1: we're recording this is sadly the same week we learned
Speaker 1: of the passing of the man who wrote the C
Speaker 1: programming language. So, uh so, rest in peace, Mr Ritchie.
Speaker 1: Uh So they the the M nine fifty wireless handheld
Speaker 1: can run CE language programs. Actually read about a guy
Speaker 1: who used to have a version of Super Mario on
Speaker 1: this little pager. Really, yeah, he had a C programming
Speaker 1: language version of Super Mario that he would play on
Speaker 1: this pager. I can't imagine that would be terribly satisfying,
Speaker 1: but it was interesting. Well yeah, I imagine so. Um
Speaker 1: and so this one again was smaller than the nine
Speaker 1: hundred that we talked about a little bit ago, and
Speaker 1: it still had the quirty keyboard in the little screen. Right.
Speaker 1: Um yeah. At this point, RIM has become one of
Speaker 1: Canada's fastest growing tech companies. Um. You know, and it's
Speaker 1: actually it's it's funny because um, from what I understand,
Speaker 1: the campus is right there at the University of Waterloo,
Speaker 1: right next door. Essentially UM syphiling off engineering students as
Speaker 1: fast as possible, probably UM. But some people have started
Speaker 1: calling this part of you know, the Kitchener Waterloo area
Speaker 1: as a silicon valley north. UM. I don't know that
Speaker 1: there's much of a valley, but you know, I guess
Speaker 1: it's just the the slang for the term. But yeah,
Speaker 1: ninety nine is when they rim became listed on the
Speaker 1: NASDAC stock Exchange, which helped the company get another two
Speaker 1: fifty million dollars UM. And this is the point at
Speaker 1: which the device is The little buttons on the outside
Speaker 1: of the devices are beginning to remind some people of
Speaker 1: of seeds on the outside of fruit, which is how
Speaker 1: apparently the BlackBerry got its name. Although when BlackBerry was
Speaker 1: first announced, it was just a wireless email solution. It
Speaker 1: wasn't specifically u attributed to a particular product, so in
Speaker 1: other words, you didn't call your phone a BlackBerry. At
Speaker 1: this point, Yeah, the BlackBerry referred to the technology that
Speaker 1: allowed to access email. And this is where black BlackBerry
Speaker 1: introduces the enterprise server software for Microsoft Exchange. So now
Speaker 1: we've got the devices that will allow you to access
Speaker 1: your corporate email or your Microsoft Exchange email if it's
Speaker 1: not necessarily corporate, it's just that was the most common. UM.
Speaker 1: But it would allow you to check email on devices.
Speaker 1: It still didn't have a phone, so this is more
Speaker 1: like a personal digital assistant. But they introduced the RIM
Speaker 1: eight fifty wireless handheld and which looked a lot like
Speaker 1: the nine fifty, except now the eight fifty runs on
Speaker 1: the data attack wireless network. The nine ft is on
Speaker 1: the mobile text wireless network. So these are two different
Speaker 1: wireless technologies. And that might sound strange to you, except
Speaker 1: that we still see that kind of stuff today. I
Speaker 1: mean we see it in multiple UH areas, because we've
Speaker 1: got C d M A versus G s M. Those
Speaker 1: are two different wireless technologies. You've got things like Wi
Speaker 1: max and LTE, those are two different wireless technology. So uh.
Speaker 1: In other words, BlackBerry was trying to broaden its market
Speaker 1: by creating devices that could work on other wireless networks
Speaker 1: so that they could reach more consumers. And uh, the
Speaker 1: eight fifty is UM as as far as I can tell.
Speaker 1: The eight fifty is the device that really started the
Speaker 1: ball rolling in a way and just it's the it's
Speaker 1: the device that got uh people to really sit up
Speaker 1: and take notice, and people wanted to buy it. Um right,
Speaker 1: you know this is this is a narrow and a
Speaker 1: lot not everyone still not everyone had personal email, the
Speaker 1: corporate email. Well that was very useful and people it
Speaker 1: was really starting to take off and it was it's important.
Speaker 1: Now all of a sudden, you're able to keep up
Speaker 1: with things that are going on in the office, um
Speaker 1: conveniently while you are out and about, while you're at lunch, um,
Speaker 1: while you're at home. You don't have to find a
Speaker 1: computer to log in and more. You can just check
Speaker 1: it and it's easy to do, so easy in fact,
Speaker 1: that people kind of want to do it, which is
Speaker 1: why you couldn't get people to leave them alone. It's
Speaker 1: also why we call them crackberries. Uh now after the
Speaker 1: addictive drug. In two thousand, the RIM introduced the eight
Speaker 1: fifty seven and the ninety seven wireless handheld devices. This
Speaker 1: is these are the ones that really looked like p
Speaker 1: D as you know, they had the monochrome screen. Uh,
Speaker 1: they had a larger so the screens larger, the quarty
Speaker 1: keyboards spread out there that these are the devices that
Speaker 1: look a little more squar ish or even rectangular, where
Speaker 1: you've got a lot more real estate for the screens.
Speaker 1: And in uh in two thousand one, Uh, that's where
Speaker 1: we start getting into some legal issues. So two thousand one,
Speaker 1: a group of investors file a lawsuit in a US
Speaker 1: federal court and they they accuse RIM of using of
Speaker 1: infringing patents held by a patent company called n TP.
Speaker 1: Now you may have heard our Yeah, if you heard
Speaker 1: of our our Patent Wars podcast, we talked about there
Speaker 1: were there are companies out there that really what they
Speaker 1: do is they acquire patents and then they either license
Speaker 1: those patents out to other companies that want to use
Speaker 1: the technology, or they sit on the patents and wait
Speaker 1: for someone to infringe on them and then sue the
Speaker 1: dickens out of them. Yeah, that's the problem with getting
Speaker 1: people to sit up and take notice of you. That
Speaker 1: also means that people sit up and take notice of you.
Speaker 1: NTP noticed Um also in two thousand just as a note,
Speaker 1: the company raised another nine fifty million dollars by offering
Speaker 1: more shares of stock they were gonna need um. But yeah,
Speaker 1: I mean, at this point, RIM is a well established
Speaker 1: company two thousand, which is what sixteen years or so
Speaker 1: after it's founding incorporate well formal uh incorporation corporation. So, um, yeah,
Speaker 1: I mean at this point they're they're a well known
Speaker 1: tech company. They're they're really making a mark in the world.
Speaker 1: And NTP sets up and goes we got toused. So
Speaker 1: two thousand two is a huge year for for M
Speaker 1: and they released the BlackBerry five eight one zero, which
Speaker 1: is the first handheld device that actually is called a BlackBerry.
Speaker 1: The other ones had the BlackBerry technology in them, but
Speaker 1: you didn't necessarily call it a BlackBerry, although a lot
Speaker 1: of people use as as kind of the short form
Speaker 1: version of the name, like when you talk about a
Speaker 1: Windows based computer and you call it AC. Yeah. So
Speaker 1: the BlackBerry five eight one zero first the first true BlackBerry.
Speaker 1: It was also a smartphone, although it required a separate
Speaker 1: headset to use as a phone, and it worked on
Speaker 1: the GSM network had a monochrome screen. And then later
Speaker 1: that year M released the six seven one zero and
Speaker 1: six seven two zero phones, which had integrated phones directly
Speaker 1: into the hand set itself, so you didn't have to
Speaker 1: have a separate headset to use the phone. They also
Speaker 1: released the six five one zero. So this is the
Speaker 1: other thing about BlackBerry. They have really catching names for
Speaker 1: their devices. Six zero was the next Tell device, so
Speaker 1: it not only had the the BlackBerry Email service and
Speaker 1: all of that fun stuff, it also had a walkie
Speaker 1: talkie feature over breaker breaker uh. And then later on
Speaker 1: they introduced another one of the next tells. Uh. Actually
Speaker 1: a couple of years later, but they introduced a Next
Speaker 1: Tell phone that was the first BlackBerry to hold have
Speaker 1: a GPS receiver in it. Um, they introduced the first
Speaker 1: c d M a BlackBerry, which was the six seven
Speaker 1: five zero. You're never gonna keep all these straight. We
Speaker 1: should write a quiz for this and all they are
Speaker 1: the numbers, and I would just be evil, all right.
Speaker 1: So then um, they also introduced a Mobile Data Service,
Speaker 1: which was an environment for apps that could access corporate data. Now,
Speaker 1: RIM has never really gotten wholeheartedly into the whole apps game. Uh.
Speaker 1: They a little bit, but not like other companies like
Speaker 1: Apple and Google. So in fact that that kind of
Speaker 1: plays into why they are in the situation they're in
Speaker 1: right now. Um. They also introduced what would later become
Speaker 1: known as the BlackBerry Internet Service, which was what allowed
Speaker 1: people to access email clients that were web based as
Speaker 1: opposed to the Microsoft Exchange stuff. So they could suddenly
Speaker 1: and they can now access not just their corporate email,
Speaker 1: but if they had a web based personal email address,
Speaker 1: they could access that as well. And in two thousand two,
Speaker 1: a jury finds in favor of nt P in their
Speaker 1: their lawsuit about patent infringement and orders them to pay
Speaker 1: twenty three point one million dollars. And boy does that
Speaker 1: get more complicated. Just a few months later, that was
Speaker 1: in November, and in in August or two thousand three,
Speaker 1: a judge said that the BlackBerry could not be sold
Speaker 1: in the United States. Yeah. Um, but Rim appealed that
Speaker 1: decision and yeah, so basically they were allowed to pending
Speaker 1: the result of the appeal. And this was important for
Speaker 1: him because that same year they were the company started
Speaker 1: releasing devices that were aimed more for well, they we
Speaker 1: call them pro sumers, right, sumer. It's kind of the
Speaker 1: early adopters. We've talked about them before in the podcast.
Speaker 1: But they're not not your average consumer because the BlackBerry
Speaker 1: was you know, it's kind of a luxury product for
Speaker 1: anyone who is just interested in the smartphone and is
Speaker 1: not going to get you know, reimbursed by their company.
Speaker 1: But yeah, this was aimed at professionals who were interested
Speaker 1: in smartphones, but they weren't directly tied to whatever it
Speaker 1: is they did for a living, so they wanted as
Speaker 1: a personal device. Um. So, of course RIM's very much
Speaker 1: interested in keeping their their products up and running, especially
Speaker 1: in the United States because that's where one of the
Speaker 1: big markets. That's that's the location of a large market.
Speaker 1: I mean, you know, you've got other markets for smartphones,
Speaker 1: but a lot of those are already tied up by
Speaker 1: phones coming out of Japan. So going to two thousand four, Uh,
Speaker 1: here's something interesting. So by now they're starting to release Uh.
Speaker 1: In two thousand three, they also started releasing Blackberries that
Speaker 1: had color screens, because up to that point they were
Speaker 1: all monochrome. But in two thousand four they releases the
Speaker 1: BlackBerry five seven nine zero, which has a monochrome display
Speaker 1: and no phone. And why would they do that because
Speaker 1: people on the mobile text network really wanted to have
Speaker 1: all these cool features and they didn't have a device
Speaker 1: that would run on Mobile TEX network. So the five
Speaker 1: seven nine zero was the first BlackBerry device to run
Speaker 1: on Mobile Tex. But it couldn't have a phone because
Speaker 1: it was data only and they didn't have a void solution.
Speaker 1: So uh there there you go, monochrome display. It was
Speaker 1: like it was like a device that looked like it
Speaker 1: came out two years previously, you know, compared to the
Speaker 1: stuff that had come out in two thousand three. Well,
Speaker 1: two thousand four was important for another reason too. That
Speaker 1: was when uh, when BlackBerry had more than one million
Speaker 1: subscribers around the world. UM, and in two thousand four
Speaker 1: late UH that an appeals court had decided that most
Speaker 1: of the claims that UH that mt P had brought
Speaker 1: were were still valid UM and news form. But they
Speaker 1: also asked the court asked the the lower court UM
Speaker 1: that it made the decision to look at the case again,
Speaker 1: so we had to reopen that. And they said that
Speaker 1: the the original ruling had some problems with it, that
Speaker 1: that the the actual allegation still held true, but the
Speaker 1: ruling itself had problems, so it needed to go back
Speaker 1: into the court system. So then get to two thousand
Speaker 1: and five. Now RIM has over five million subscribers, which
Speaker 1: is enormous growth. Yeah, but it's the point at which
Speaker 1: the RIM is getting to the point where I think
Speaker 1: they're getting a little weary of this lawsuit thing. Yeah,
Speaker 1: so they get so they agreed to a settlement. Yeah,
Speaker 1: a crazy settlement because remember it was originally they were
Speaker 1: gonna have to pay twenty three point one million dollars.
Speaker 1: Now it's four and fifty million dollars to settle the lawsuit. Yeah,
Speaker 1: but NTP does not seem too um happy to just
Speaker 1: take that. They now in TPS thinking hey, we got
Speaker 1: a real shot of of we smell blood. Yeah we can,
Speaker 1: we can really really uh twist the knife here. And
Speaker 1: so a judge gets kind of fed up with what's
Speaker 1: going on with the the failure to create a deal,
Speaker 1: and the case is sent back to federal court. And
Speaker 1: uh and so you've got the case going back to
Speaker 1: federal court. Uh. The rim appeals to the U. S.
Speaker 1: Supreme Court. The Supreme Court says, no, this needs to
Speaker 1: go back to federal court. Um. Judge refuses to force
Speaker 1: in TP to actually agree to the four hundred fifty
Speaker 1: million dollar settlements. So now INTP has a real chance
Speaker 1: of getting even more right. Right. As a matter of fact,
Speaker 1: in December of two thousand five, they said that they
Speaker 1: would be willing to settle as long as they got
Speaker 1: a five excuse me, a five point seven percent royalty
Speaker 1: for the life of the patents. Yea, So now that
Speaker 1: would be lucrative. Yeah, this is like an actor landing
Speaker 1: a deal to get part of the merchandising rights for
Speaker 1: anything that comes out of the movie that actors in.
Speaker 1: You know, that's where the real money is. Yeah, I mean,
Speaker 1: ticket sales are one thing, but you're going to really
Speaker 1: make it up with those T shirts and action figures
Speaker 1: and I'm just appealing to my geek friends now. But
Speaker 1: also that same year two thousand five, just to get
Speaker 1: a little bit of positive news out there, Real introduced
Speaker 1: the BlackBerry Dred, which had the first true color screen
Speaker 1: and also introduced themes to the BlackBerry handset. So now
Speaker 1: that that became like the flagship product for for that year. Yeah,
Speaker 1: if you've been using a BlackBerry for a long time,
Speaker 1: you might remember the the Brujaja that had come up
Speaker 1: where they were saying in the news that it was
Speaker 1: possible that BlackBerry would have to stop offering service in
Speaker 1: the United States. That's what we're talking about right now,
Speaker 1: because at this point there uh MTP is basically saying, hey, look,
Speaker 1: well we'll allow thirty days before cut off, and and
Speaker 1: government users don't necessarily have to have their service cut
Speaker 1: off right because black we can't settle, they're gonna have
Speaker 1: to stop. Blackberries became really really important for government officials,
Speaker 1: for military and for first responders because it provided a
Speaker 1: fast and secure way to communicate. So uh, you know
Speaker 1: that it could have had catastrophic results if all service
Speaker 1: had been cut off. Can you imagine, I mean, you
Speaker 1: could fire departments not being able to communicate as as
Speaker 1: easily as they had been. It would be a massive blow.
Speaker 1: And there's some things that you know, you just gotta say, Okay, well,
Speaker 1: look we're gonna allow these services to continue even if
Speaker 1: we can't come to an agreement, because otherwise it would
Speaker 1: be catastrophic. So uh. At the same time, Bassili was
Speaker 1: saying that they that the company was looking at ways
Speaker 1: to create alternatives to the technology that was in question
Speaker 1: so that they could continue offering service even if the
Speaker 1: the the questionable technology was shut down. So this is
Speaker 1: kind of a work around they're looking at. Now. We
Speaker 1: then get into a point where RIM agrees to pay
Speaker 1: INTP a settlement of six hundred and twelve and a
Speaker 1: half million dollars and um, that's the settlement and for
Speaker 1: a quote perpetual paid up license going forward end quote. Yeah,
Speaker 1: and uh it's pretty huge here. But um, you know,
Speaker 1: we're still at this point that this has not actually
Speaker 1: been settled, and uh, it's it's really getting ugly and
Speaker 1: and people who are like the stakeholders in the company
Speaker 1: are nervous because you don't know if the service is
Speaker 1: going to be cut off or not. So RIM is
Speaker 1: actually really suffering at this point. Well, they've they continue this, uh,
Speaker 1: this court case, which at this point was actually more
Speaker 1: interesting too to the technology world then the actual products
Speaker 1: that Blackberries putting out. Um. It also was starting to
Speaker 1: drive business over to Palm. You know, as people were saying,
Speaker 1: I don't know if this BlackBerry is going to be
Speaker 1: working in six months, I need to go get a
Speaker 1: device that I know I can depend on. And so
Speaker 1: Trio sales actually really took off at this point. Um.
Speaker 1: But eventually the uh, the whole mess with NTP gets
Speaker 1: set old and and uh as a result, the shares
Speaker 1: actually get a boost and uh and things start to
Speaker 1: look better for REM. Although in two thousand seven, RIM
Speaker 1: had to pay two fifty million dollars to UM to
Speaker 1: the United States because of some problems with their stock options. Uh.
Speaker 1: They were issuing stock options at less than fair market
Speaker 1: value to some of their executives, and so Lazarides and
Speaker 1: Basili had to pay around five million dollars apiece to
Speaker 1: cover the cost of the accounting review that was ordered
Speaker 1: by the United States government, and UM lots of lots
Speaker 1: of executives had to pay back some some money because
Speaker 1: the stock options they have been granted were granted at
Speaker 1: the wrong price. So again kind of a black mark
Speaker 1: on RIM. Well, at this point, now that the lawsuit
Speaker 1: is settled, UH, they're able to focus on on business
Speaker 1: again in a more unified way. They're not their tension
Speaker 1: is not divided anymore. UM. In late two thousand seven, Uh,
Speaker 1: there were more than ten million BlackBerry subscribers. UM. You'll
Speaker 1: remember in two thousand seven to other products were announced
Speaker 1: that would eventually cause great problems for rem that that
Speaker 1: would be the iPhone and the Google Android operating system. UM.
Speaker 1: But in the meaning, but keeping in mind that Blackberries
Speaker 1: still established as the business, the the the corporate UM
Speaker 1: solution for messaging and for for for you know, smartphones. Uh,
Speaker 1: you know, the Trio was was still pretty far behind UM,
Speaker 1: and it was also still very much a an enterprise product.
Speaker 1: It wasn't a consumer thing. UM. Alcatel Lucented had an
Speaker 1: agreement to distribute Blackberries in China, which you know as
Speaker 1: a huge market UM and as a matter of fact,
Speaker 1: that that stock boost from that actually made RIM the
Speaker 1: most valuable company in Canada based on market capitalization UM.
Speaker 1: Then in two thousand seven, again they released the BlackBerry
Speaker 1: Professional Software UM, which allowed companies with their own email
Speaker 1: server UM in house to UH to transmit to Blackberries UM,
Speaker 1: enabling people who work in I T for many companies
Speaker 1: to get messages at two in the morning going the
Speaker 1: servers down UM. It thrilled them to no end. I
Speaker 1: am sure I've been around people for whom that is
Speaker 1: a oh I gotta go UM and UH they actually
Speaker 1: had their first BlackBerry store and Farmington Hills, Michigan UM
Speaker 1: along with the cell phone company Wireless Giant UM, so
Speaker 1: that that was sort of a unique thing for the
Speaker 1: time to UM. They added more subscribers again, one point
Speaker 1: six five million by the end the very end of
Speaker 1: two thousand seven, pushing him up to twelve million UM,
Speaker 1: and UH RIM started its own copyright. UM not copyrighted
Speaker 1: its own patent case the year after UH telling saying
Speaker 1: that Motorola had and fringed on some of its patents. UM.
Speaker 1: So you know, Motorola sued them back, of course, as
Speaker 1: is typically the case in these situations, saying that some
Speaker 1: of the there are u S patents that they owned
Speaker 1: that BlackBerry was infringing on. And then they started not
Speaker 1: naming their stuff with boring old names. This is when
Speaker 1: the you could tell that the influence of the consumer
Speaker 1: smartphone was having an effect on BlackBerry when they came
Speaker 1: out with the Bold in two thousand eight. I remember
Speaker 1: the Bold, the Curve, the Pearl, um. All of these
Speaker 1: devices were aimed at various slices of the consumer market
Speaker 1: with an attempt to try and gain traction there. UH.
Speaker 1: Although BlackBerry got a lot of criticism from technology journalists
Speaker 1: and analysts, saying that while they were redesigning the hardware
Speaker 1: and trying to make that more more attractive to the
Speaker 1: average consumer, they hadn't done a lot of work with
Speaker 1: the operating system, and the operating system had remained pretty
Speaker 1: much the same over the last several years, and that
Speaker 1: as a result, it was starting to look stale, particularly
Speaker 1: against things like the iPhone or Google Android. And another
Speaker 1: part is, again I mentioned earlier, BlackBerry just didn't support
Speaker 1: apps to the same extent as Android or the iPhone.
Speaker 1: And you think, you know, apps really extend the functionality
Speaker 1: of these devices. You know, you can suddenly do all
Speaker 1: these amazing things on the device. Sometimes it's games, sometimes
Speaker 1: it's a service that will let you, um uh, navigate
Speaker 1: the world more easily, or to navigate shopping more easily.
Speaker 1: BlackBerry didn't really have that to the extent that iPhone
Speaker 1: and Google did. And as a result, if you're a consumer,
Speaker 1: you know, you're not just looking at most consumers, I
Speaker 1: guess are not just looking at the form factor, although
Speaker 1: that definitely plays a role in your choice, but just
Speaker 1: why can you do with it? And really BlackBerry was
Speaker 1: falling behind and so um some people said that might
Speaker 1: have been what led BlackBerry to introduced the Playbook, which
Speaker 1: was Blackberries or Rims tablet device seven inch tablet and uh.
Speaker 1: It was a very snazzy tablet of the operating system
Speaker 1: was very smooth. It was not the standard BlackBerry operating system.
Speaker 1: They had gone to another company to outsource that and uh,
Speaker 1: and it would support apps. UH. The interesting some interesting
Speaker 1: things about the the playbook, and we've done a whole
Speaker 1: podcast about the playbook, so you can listen to that
Speaker 1: as well. But some of the interesting points about it
Speaker 1: or that you could not access contacts and email and
Speaker 1: then that sort of information with the playbook on its own.
Speaker 1: You had to pair it with a BlackBerry smartphone. And
Speaker 1: the idea here was that if someone were to get
Speaker 1: hold of your tablet, they wouldn't be able to access
Speaker 1: your corporate information because it was not stored on the
Speaker 1: device itself. It could only be accessed when paired with
Speaker 1: a smartphone. Yeah, of course, UH. In a lot of
Speaker 1: enterprise UH situations, there's a lot of proprietary data that
Speaker 1: needs to be protected, business plans and UH you know
Speaker 1: Apple is we've talked about how secret Apple is. There
Speaker 1: far from the only UH company and all forms of
Speaker 1: business that wants to keep its trade secrets private. UM,
Speaker 1: that's that's one of the big reasons why UH I
Speaker 1: T professionals are still very big on blackberriers that they've
Speaker 1: they have very strong security versus UH people. That was
Speaker 1: one of the big arguments they said, well why don't
Speaker 1: why don't more people switched to the iPhone. If people
Speaker 1: like the iPhone, they said, well, the iPhone is not
Speaker 1: as capable. Keeping in mind this is you know, some
Speaker 1: time ago, and things have changed somewhat, but you know,
Speaker 1: that was the big argue even right away, was well,
Speaker 1: you know, the iPhone may be nice, but it doesn't
Speaker 1: have the same kind of security that a BlackBerry does.
Speaker 1: A lot of the transmissions on a BlackBerry are encrypted. Yeah,
Speaker 1: and they're passing through Blackberries servers yes, um, which is,
Speaker 1: by the way, are most of which are located in Canada.
Speaker 1: Which that was part of the problem when when Barack
Speaker 1: Obama wanted to see if he could keep his BlackBerry
Speaker 1: once he became president of the United States. That was
Speaker 1: one of the issues that was brought up was the
Speaker 1: fact that this this data would be passing through servers
Speaker 1: in another country. And we all know that Canada is
Speaker 1: poised to strike at the United States at a moment's notice,
Speaker 1: So they wanted to be sure that the president's information
Speaker 1: would remain private and and untouched by anyone in Canada
Speaker 1: who had designs on the presidency of the United States
Speaker 1: of America. Well, it might be exaggerating a little, but
Speaker 1: there was there was an issue well. And and the
Speaker 1: thing is too that it was passing out of the
Speaker 1: government's hands and in to the hands at a private
Speaker 1: company too as well. That's another issue. Even if even
Speaker 1: if rem we're located in the United States, there would
Speaker 1: be some serious questions about that kind of thing. But
Speaker 1: the BlackBerry remains a company to which many people are
Speaker 1: extremely loyal. UM. They have made good products with a
Speaker 1: good reputation for many years, and the UH the enterprise
Speaker 1: security layer is also something that gives people in business
Speaker 1: a lot of confidence in the product. Unfortunately, UM, at
Speaker 1: the time we are recording this, BlackBerry has been fending
Speaker 1: off a pr um onslaught that they've had to deal
Speaker 1: with because the servers and apparently there was a machine
Speaker 1: that went down in the United Kingdom one of their
Speaker 1: course switches. Now, a course switch is a device that
Speaker 1: helps route traffic. It takes incoming traffic and sends it
Speaker 1: to the next major hop along the line. But if
Speaker 1: you're talking about a course with that's something that's located
Speaker 1: on the backbone of a system. So that's a major
Speaker 1: major point of failure. And like many companies, RIM has
Speaker 1: entrusted its equipment to a redundant backup system also in
Speaker 1: this case which failed UM, so the company throttled its
Speaker 1: network traffic all around the world and so for the
Speaker 1: past few days before the day we were recording this
Speaker 1: UM in in mid October of two thousand eleven, BlackBerry
Speaker 1: has been suffering from people being very upset about it,
Speaker 1: the traffic disruptions and UM As a result, a lot
Speaker 1: of people have been questioning whether, as BlackBerry has been
Speaker 1: behind UH, the Android and iOS operating systems for the
Speaker 1: past couple of years in terms of subscriber growth, whether
Speaker 1: BlackBerry will continue as a viable option for for enterprises
Speaker 1: because both Apple and Google see opportunities in the enterprise market. Yeah,
Speaker 1: this was This was particularly bad timing for this to
Speaker 1: happen for to Rim because you've got you've got them
Speaker 1: in a precarious position there. Their sales have have had
Speaker 1: some problems over the last few quarters. They've had revenue
Speaker 1: problems over the last few quarters. The company looked like
Speaker 1: a company that's in trouble, and people were pointing at
Speaker 1: the operating system looking out a date. Although UM black
Speaker 1: Rim is supposed to to introduce a new operating system
Speaker 1: any day now UM, but for this to happen right
Speaker 1: after the iPhone four S announcement, So you've got a
Speaker 1: new iPhone on the market, and the upcoming Google Android
Speaker 1: ice Cream Sandwich announcement. See, you're gonna have a new
Speaker 1: version of the Android operating system, plus the release of
Speaker 1: iOS five, the release of iOS five, the release of
Speaker 1: a new Samsung Android phone that's supposed to be really advanced.
Speaker 1: These are all bad things for to to you know,
Speaker 1: it's all happening around the same time, and for RIM
Speaker 1: to suffer a catstrophic failure like this when everybody else
Speaker 1: is releasing positive news that it's it's tough and um
Speaker 1: and to be fair, you know, it wasn't that information
Speaker 1: necessarily got lost during this process. Most of it was
Speaker 1: just delayed by hours, Like there'd be a three hour
Speaker 1: delay from when someone would send something and when you
Speaker 1: might receive it, which of course is bad if it's
Speaker 1: an urgent matter, but anyway, so they're dealing with that
Speaker 1: right now. They're also dealing with other issues, like there
Speaker 1: are governments around the world that want to be able
Speaker 1: to access the information that's sent across the BlackBerry um network,
Speaker 1: and so that raises ethical questions like do you do
Speaker 1: you agree to do that, do you agree to give
Speaker 1: the governments the access to the information? Do you keep
Speaker 1: it encrypted? Because you know, you're trying to serve your
Speaker 1: customers and m has had to deal with some pretty
Speaker 1: sticky situations there. They also got some bad press inn
Speaker 1: during the riots in London because it turned out that
Speaker 1: a lot of the kids in London have Blackberries and
Speaker 1: they were using the BlackBerry messaging service, which is encrypted service,
Speaker 1: to send messages between each other to target specific businesses
Speaker 1: during the riots. So it was it was it would
Speaker 1: have required the cooperation of BlackBerry itself to provide the government,
Speaker 1: uh you know, they couldn't be spied upon. They would
Speaker 1: have to get BlackBerry to share that information with them.
Speaker 1: Of course BlackBerry agreed to cooperate, but it doesn't help
Speaker 1: again that that for a lot of people. That's the problem,
Speaker 1: big pr problem. Yet has been a rough year for
Speaker 1: Research in Motion now. Some people have already said that
Speaker 1: this might be the beginning of the end, or that
Speaker 1: perhaps Research Emotions should look at selling off its assets
Speaker 1: to other companies and just kind of dissolving so so
Speaker 1: elements of BlackBerry would continue to live on, it's just
Speaker 1: they would go under a different corporate name. People said
Speaker 1: the same thing about Apple about twenty years ago, right,
Speaker 1: So there's there's always the chance that that research in
Speaker 1: motion could turn this around and become a very powerful
Speaker 1: player in the telecom space. Again, I mean, there's no
Speaker 1: thing necessarily stopping them. It's just that the you know,
Speaker 1: the odds are definitely stacking against them, but that doesn't
Speaker 1: mean they can't overcome those odds. So we'll have to
Speaker 1: watch and see and find out what happens. We'll also
Speaker 1: have to see if if they they have a change
Speaker 1: in leadership, because for the last couple of years, RIM
Speaker 1: has also received a lot of criticism about having co
Speaker 1: c e O s and saying that that kind of
Speaker 1: sends a mixed message to shareholders and it might be
Speaker 1: better to have a single person hold the position of
Speaker 1: CEO to give a unified vision for the company and
Speaker 1: be able to message that out to everybody, both consumers
Speaker 1: and retailers there, shareholders, everyone, and and employees of REM.
Speaker 1: So it's a complicated issue, and uh, I'm glad we
Speaker 1: tackled this. It was. It's an important company definitely, So
Speaker 1: if you guys have any other major companies you'd like
Speaker 1: us to talk about. Or maybe we could do an
Speaker 1: episode where we talk about a bunch of smaller but
Speaker 1: related companies. That's also possible. Sometimes companies are are young
Speaker 1: enough and small enough where we can't do a full
Speaker 1: podcast about them, but let us know. You can send
Speaker 1: us an email that addresses tech stuff at how stuff
Speaker 1: words dot com, or shoot us a message on Twitter
Speaker 1: or Facebook. Our handle at both of those places is
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