Report reveals disagreements between co-founders, new CEO led to BlackBerry mess
A series of disagreements over major strategic decisions and spending too much time pondering than taking action is being blamed for the current mess that BlackBerry finds itself in. An exhaustive report from The Globe and Mail, for the first time, reveals why BlackBerry co-founder and former co-CEO Jim Balsillie left the company and sold his entire stake. The report also reveals that the other co-founder Mike Lazaridis was against BlackBerry launching the Z10, a full-touch smartphone, and insisted BlackBerry should play to its strengths and launch a phone with a keypad. However, he was vetoed by new CEO, Thorsten Heins, who went ahead with launching the Z10 as the first, flagship BlackBerry 10 smartphone. BlackBerry took a $934 million hit on unsold Z10 inventory barely eight months after the smartphone’s launch.
According to the report, Balsillie wanted to create a cross-platform BBM client that could be sold as a service to carriers to offer it to their subscribers. He had already spoken to a few carriers, with some major carriers showing interest in the company. This could be the next big thing for BlackBerry, with its smartphone sales slowing down in some of its biggest markets. Balsillie thought it could be a huge revenue opportunity if BlackBerry could have BBM running on millions of non-BlackBerry smartphones.
However, that was not to be. After getting appointed as the CEO, Heins shot down the idea. He was supported by Lazaridis, with both feeling that it would be a distraction for BlackBerry that was still struggling to get BB10 out of the gate, a project that would be delayed one more time. Balsillie resigned from the board (he and Lazaridis had resigned as co-CEOs but remained on the board of the company. Balsillie also severed all ties from the company by selling every single share he held.
For the first time he confirmed the reason for leaving BlackBerry in a statement to The Globe and Mail. “My reason for leaving the RIM board in March, 2012, was due to the company’s decision to cancel the BBM cross-platform strategy,” he said.
Heins would have another showdown, this time with Lazaridis. Close to the announcement of the first BB10 smartphones, Heins revealed to the board that the first flagship smartphone would be an all-touch phone. Lazaridis wasn’t impressed and felt that BlackBerry should be playing to its strengths, which has always been its keyboards, than launching something that everyone is doing. However, Heins and his team believed that keypads didn’t have any market anymore and they had to begin with an all-touch phone. Soon after Lazaridis too left the board, though he is said to be attempting to buy his company back.
The Z10, which was launched early this year didn’t get many takers. Existing BlackBerry users decided to wait for the QWERTY keypad equipped Q10, which would be launched a few months later while non-BlackBerry users were not impressed by BB10. BlackBerry took a $934 million inventory charge on unsold Z10 units, which also accelerated its search for a buyer. The company is now looking at firing 40 percent of its employees and exiting the consumer market.