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Research In Motion Limited (BlackBerry) history, profile and corporate video

Research In Motion Limited is a designer, manufacturer, and marketer of wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services, it provides platforms and solutions for seamless access to information, including e-mail, voice, instant messaging, short message service (SMS), Internet and intranet-based applications and browsing. The Company’s technology also enables an array of third party developers and manufacturers to enhance their products and services through software development kits, wireless connectivity to data and third-party support programs.Its portfolio of products, services and embedded technologies are used by thousands of organizations and millions of consumers around the world and include the BlackBerry wireless solution, the RIM Wireless Handheld product line, the BlackBerry PlayBook tablet, software development tools and other software and hardware.”

“Research In Motion History

Early years and growth (1984–2000)

Research In Motion Limited was founded in 1984 by Mike Lazaridis and Douglas Fregin. At the time, Lazaridis was an engineering student at the University of Waterloo while Fregin was an engineering student at the University of Windsor. 

RIM’s early development was financed by Canadian institutional and venture capital investors in 1995 through a private placement in the privately held company. Working Ventures Canadian Fund Inc. led the first venture round with a C$5,000,000 investment with the proceeds being used to complete the development of RIM’s two-way paging system hardware and software. A total of C$30,000,000 in pre-IPO financing was raised by the company prior to its initial public offering on the Toronto Stock Exchange in January 1998 under the symbol RIM.

The company worked with RAM Mobile Data and Ericsson to turn the Ericsson-developed Mobitex wireless data network into a two-way paging and wireless e-mail network. Pivotal in this development was the release of the Inter@ctive Pager 950, which started shipping in August 1998. About the size of a bar of soap, this device competed against the SkyTeltwo-way paging network developed by Motorola.

In 1999, RIM introduced the BlackBerry 850 pager. Named in reference to the resemblance of its keyboard’s keys to the druplets of the blackberry fruit, the device could receivepush email from a Microsoft Exchange Server using its complementary server software, BlackBerry Enterprise Server (BES). The introduction of the BlackBerry set the stage for future enterprise-oriented products from the company, such as the BlackBerry 957 in April 2000, the first BlackBerry smartphone. The BlackBerry OS platform and BES continued to increase in functionality—while the incorporation of encryption and S/MIME support helped BlackBerry devices gain increased usage by governments and businesses.

Expansion and competition (2001–2011)

RIM soon began to introduce BlackBerry devices aimed towards the consumer market as well, beginning with the BlackBerry Pearl 8100—the first BlackBerry phone to includemultimedia features such as a camera. The introduction of the Pearl series was highly successful, as was the subsequent Curve 8300 series and Bold 9000. Extensive carrier partnerships fueled the rapid expansion of BlackBerry users globally in both enterprise and consumer markets.

The arrival of the first Apple iPhone in 2007 caused much fanfare and speculation that the BlackBerry might have its first serious competition. Boasting a powerful mobile browser, a new touch screen interface, strong multimedia capabilities and (later) a bundled application storefront with many mobile apps, the iPhone was referred to as a “BlackBerry Killer” by some in the media. The introduction of Apple’s iPhone on the AT&T network in the fall of 2007 in the United States prompted RIM to produce its first touchscreen smartphone for the competing Verizon network in 2008— the BlackBerry Storm. The Storm sold well but suffered from mixed to poor reviews and poor customer satisfaction. The iPhone initially lagged behind the BlackBerry in both shipments and active users, due to RIM’s head start and larger carrier distribution network. In the United States, the BlackBerry user base peaked at approximately 21 million users in the fall of 2010. That quarter, the company’s global subscriber base stood at 36 million users. As the iPhone and Google Android accelerated growth in the United States, the BlackBerry began to turn to other smartphone platforms. Nonetheless, the BlackBerry line as a whole continued to enjoy success, spurned on by strong international growth. As of December 1, 2012, the company had 79 million BlackBerry users globally  with only 9 million remaining in the United States.

Even as the company continued to grow worldwide, investors and media became increasingly alarmed about the company’s ability to compete with devices from rival mobile operating systems iOS and Android. Analysts were also worried about the strategic direction of the co-CEOs’ management structure. In June 2014, CNN released an article citing BlackBerry as one of six endangered US brands.

Following numerous attempts to upgrade their existing Java platform, the company made numerous acquisitions to help it create a new, more powerful BlackBerry platform, centered around its recently acquired real-time operating system QNX. In March 2011, Research In Motion Ltd.’s then-co-CEO Jim Balsillie suggested during a conference call that the “launch of some powerful new BlackBerrys” (eventually released as BlackBerry 10) would be in early 2012. However analysts were “worried that promoting the mysterious, supposedly game-changing devices too early might hurt sales of existing BlackBerrys” (similar to the Osbourne effect). The initial launch date was seen in retrospect as too ambitious, and hurt the company’s credibility at a time when its existing aging products steadily lost market share.

On September 27, 2010, RIM announced the long-rumoured BlackBerry PlayBook tablet, the first product running on the new QNX platform known as BlackBerry Tablet OS. The BlackBerry PlayBook was officially released to US and Canadian consumers on April 19, 2011. The PlayBook was criticized for being rushed to market in an incomplete state and sold poorly. Following the shipments of 900,000 tablets during its first three quarters on market, slow sales and inventory pileups prompted the company to reduce prices and to write down the inventory value by $485 million.

Primary competition

The primary competitors of the BlackBerry are smartphones running Android and the Apple iPhone, with Microsoft’s Windows Phone platform emerging as a more recent competitor. For a number of years, the BlackBerry was the leading smartphone in many markets, particularly the United States. The arrival of the Apple iPhone and later Google’s Android platform caused a slowdown in BlackBerry growth and a decline in sales in some markets, most notably the United States. This led to negative media and analyst sentiment over the company’s ability to continue as an independent company. BlackBerry has managed to maintain significant positions in many markets, bolstered by a large entrenched user base, cost effective phones and plans, and a growing smartphone market globally.

Impact of the Apple iPhone

When the Apple iPhone was first introduced in 2007, it generated substantial media attention, with numerous media outlets calling it a “BlackBerry Killer”. While BlackBerry sales continued to grow, the newer iPhone grew at a faster rate and the 87 percent drop in BlackBerry’s stock price between 2010 and 2013 is primarily attributed to the performance of the iPhone handset.

The first three models of the iPhone (introduced in 2007) generally lagged behind the BlackBerry in sales, as RIM had major advantages in carrier and enterprise support, however Apple continued gaining market share. In October 2008, Apple briefly passed RIM in quarterly sales when they announced they had sold 6.9 million iPhones to the 6.1 million sold by RIM, comparing partially overlapping quarters between the companies. Though Apple’s iPhone sales declined to 4.3 million in the subsequent quarter and RIM’s increased to 7.8 million, for some investors this indicated a sign of weakness. Apple’s iPhone began to sell more phones quarterly than the BlackBerry in 2010, brought on by the release of the iPhone 4.

In the United States, the BlackBerry hit its peak in September 2010, when almost 22 million users, or 37% of the 58.7 million American smartphone users at the time, were using a BlackBerry. BlackBerry then began to decline in use in the United States, with Apple’s installed base in the United States finally passing BlackBerry in April 2011. Sales of the iPhone continued to accelerate, as did the Smartphone market, while the BlackBerry began to lose users continuously in the United States. By January 2013, only 7.63 million (5.9%) of the 129.40 million smartphone users in the United States were on a BlackBerry compared to 48.91 million (37.8%) on an iPhone.

Impact of Google Android

Google’s Android Operating System, running on hardware by a range of manufacturers including Sony Ericsson, Motorola, HTC, Samsung, LG and many others ramped up the competition for BlackBerry. In January 2010, barely 3 million (7.1%) of the 42.7 million Smartphones in use at the time in the United States were running Android, compared to 18 million BlackBerry devices (43%). Within a single year Android had passed the installed base of the BlackBerry in the United States. As of January 2013, there are 67.68 million Smartphones in the United States running Android compared to 7.63 million running BlackBerry.

Criticism

While RIM’s secure encrypted network was attractive to corporate customers, their handsets were sometimes considered less attractive to consumers than iPhone and Android smartphones. Developers often developed consumer applications for those platforms and not the BlackBerry. The company also faced criticism that its hardware and operating system were outdated and unappealing compared to the competition and that the browsing capabilities were poorer.

Strategic changes and restructuring (2011–present)

Slowing growth prompted the company to undertake a lay-off of 2,000 employees in the summer of 2011. In September 2011, the company’s BlackBerry Internet Service suffered a massive outage, impacting millions of customers for several days. The outage embarrassingly occurred as Apple prepared to launch the iPhone 4S, causing fears of mass defections from the platform.

Shortly afterwards, in October 2011, RIM unveiled BBX, a new platform for future BlackBerry smartphones that would be based on the same QNX-based platform as the PlayBook. However, due to an accusation of trademark infringement regarding the name BBX, the platform was renamed BlackBerry 10 The task proved to be daunting, with the company delaying the launch in December 2011 to some time in 2012. On January 22, 2012, Mike Lazaridis and Jim Balsillie resigned as the CEOs of the company, handing the reins over to executive Thorsten Heins. On March 29, 2012, the company reported its first net loss in years. Heins set about the task of restructuring the company, including announcing plans to lay off 5,000 employees, replacing numerous executives, and delaying the new QNX-based operating system for phones (“BlackBerry 10”) a second time into January 2013.

After much criticism and numerous delays, RIM officially launched BlackBerry 10 and two new smartphones based off the platform, the BlackBerry Z10 and Q10, on January 30, 2013. The BlackBerry Z10, the first BlackBerry smartphone running BlackBerry 10, debuted worldwide in January 2013, going on sale immediately in the UK with other countries following. A marked departure from previous BlackBerry phones, the Z10 featured a fully touch-based design, a dual-core processor, and a high-definition display. BlackBerry 10 had 70,000 applications available at launch, which the company expected would rise to 100,000 by the time the device made its debut in the United States. In support of the launch, the company aired its first Super Bowl television advertisement in the U.S. and Canada during Super Bowl XLVII. In discussing the decision to create a proprietary operating system instead of adopting an off-the-shelf platform such as Android, Heins noted, “If you look at other suppliers’ ability to differentiate, there’s very little wiggle room. We looked at it seriously—but if you understand what the promise of BlackBerry is to its user base it’s all about getting stuff done. Games, media, we have to be good at it but we have to support those guys who are ahead of the game. Very little time to consume and enjoy content—if you stay true to that purpose you have to build on that basis. And if we want to serve that segment we can’t do it on a me-too approach.” Chief Operating Officer Kristian Tear remarked “We want to regain our position as the number one in the world”, while Chief Marketing Officer Frank Boulben proclaimed “It could be the greatest comeback in tech history. The carriers are behind us. They don’t want a duopoly” (referring to Apple and Samsung).

During the BlackBerry 10 launch event, the company also announced that it would change its public brand from Research In Motion to BlackBerry. The name change was made to “put the BlackBerry brand at the centre” of the company’s diverse brands, and because customers in some markets “already know the company as BlackBerry”. While a shareholder vote on an official name change to BlackBerry Limited will be held at its next annual general meeting, its ticker symbols on the TSX and NASDAQ changed to BB and BBRY respectively on February 4, 2013.

On August 12, 2013, the company announced that it was open to being purchased and stated in an official news release to Canada’s securities administrators:

The company’s board of directors has formed a special committee to explore strategic alternatives to enhance value and increase scale in order to accelerate BlackBerry 10 deployment. These alternatives could include, among others, possible joint ventures, strategic partnerships or alliances, a sale of the Company or other possible transactions.

Canada Pension Plan Investment Board’s CEO Mark Wiseman stated that he would consider investing in BlackBerry if the company became private. Also on August 12, 2013, foremost shareholder Prem Watsa resigned from BlackBerry’s board.

On September 20, 2013, the company announced it would lay off 4,500 staff, and take a CAD$1 billion operating loss.Three days later, the company announced that it had signed a letter of Intent to be acquired by a Consortium led by Prem Watsa owned Fairfax Financial Holdings for a $9 per share deal. However the company would remain open to alternative offers till November 4, 2013. Watsa also confirmed the deal.In the event, Watsa’s group decided to finance CAD$1bn instead of a takeover, and installed John Chen as CEO to replace the laid-off Heins.

As of September 29, 2013, the company operates a direct sales model for customers in the United States, whereby unlocked Q10 and Z10 smartphones are sold directly from the BlackBerry website. On October 15, 2013, the company published an open letter in 30 publications in nine countries to reassure customers that BlackBerry continues as a reputable and reliable brand.Anthony Michael Sabino, St. John’s University business professor, stated in the Washington Post: “This is BlackBerry’s last ditch attempt to simply survive in the face of crushing competition in a market it essentially invented.”

In May 2014, the low-cost Z3 BlackBerry was introduced onto the Indonesian market, where the brand had been particularly popular. The budget handset was produced in partnership with Taiwanese manufacturer Foxconn Technology Group, which handled the design and distribution of the product. A New York Times analysis stated that the model was an attempt by BlackBerry CEO and Chairman John S. Chen to generate revenue while he tried “to shift the organization’s focus to services and software.” An analyst with London’s ABI Research explained to the New York Times: “John Chen is just sustaining the handset business as he sorts out the way ahead.” As part of the localization effort for the promotion of the Z3, the handset’s back panel was engraved with the word “Jakarta”, but skepticism still emerged, as the handset was still more than twice as expensive as Android models in Indonesia at the time of release.

The company issued its results for the first quarter of the 2015 fiscal year in a news release on June 19, 2014 and presented a more stable company with greater potential for profitability in the future. Chen stated: “This is, of course, the very beginning of our task and we hope that we will be able to report better results going forward … We feel pretty good about where we are.” The Quartz publication reported that stock was up by 30 percent, compared to the same period in the previous year, while Chen expressed enthusiasm for the release of two new handsets, both with keyboards and touch screens, in the second half of 2014. Chen did not provide sales figures for the Z3 phone in Indonesia, but revealed that “demand is strong”

*Information from Forbes.com and Wikipedia.org

**Video published on YouTube by “BlackBerry