The Story of RIM

was ringing a bell. Nice of you to be good. Yeah, so you gotta you gotta make a leap on that one. It's not just the song. Who who made that song famous? And what was that guy's name? And now it makes sense, we're gonna talk about the story of m Yes, and uh, you know, I think RIM is a less famous name than the name of its flagship product. But we are talking about Research in Motion, which is a Canadian company. Uh, several people have written in to ask us if we

could talk about it. Yeah, lots of lots of people were interested in this, and we've referred to RIM quite a few times in other podcasts. Because the flagship product that Chris was alluding to is the BlackBerry, which is one of the smartphones that really kind of uh well, really, the BlackBerry was the smartphone for the longest time. I mean, the BlackBerry line was pretty much the smartphone that everyone was familiar with and very few people outside of the

corporate world owned. But uh, you know, RIM became famous because they had the company had this line of smartphones and they had kind of a almost a lock on the smartphone market. I mean really the only major competitor in the United States anyway, and other parts of the world that was different, but in the United States, the

other major competitor was Palm. Yes, so you had like the Palm Trio and then you had the BlackBerry, and you had people who were fanatically devoted to either, although BlackBerry again still had more of a corporate kind of culture to it because they RIM had incorporated the Microsoft Exchange server software in the BlackBerry form factor very early on, so it was very useful for anyone who worked for a company that used Microsoft Exchange servers, and that's quite

a few of them. Of course, lots of people are using lots of companies are using Outlook essentially as their main male feature that you know, there are other companies that use different servers for email, but the Microsoft Exchange server is incredibly popular. But before we get into all of that, we kind of need to go and talk about the founding of this company, which goes all the

way back to nine Yeah. Yeah, now of course, uh actually in in in a way, it goes back a little farther than that, um, you know, and you'd have to look to the University of Waterloo in Ontario, Canada. And basically, uh, there was a student there named Mike Lazaridis and uh you know he was he was into electrical engineering. He was in a computer science and uh he had been working with a company that, uh, maybe

we should talk about in the future. I don't know, Control Data UM, long known as a one of the computer pioneers UM, and he had been working with that that company when he was in college. UM. But basically he was working on a way to uh on a on a project called budget And no, I'm not talking about the percussionist for Susie and the benches thinking of a bird or or that either it actually was a way to display information on TVs UM and uh. He he like many of the people we have talked about

when we talked about the tech pioneers. Came up with this idea even before he UH finished school, and he dropped out of the University of Water before before finishing school, which makes him very similar to other pioneers that we've talked about, Yes and so, UM and so he basically decided to UH to give it a go and and leave school, and UH came up with a company named Paradigm Research, except that name was already taken UM and

they were trying. He tried several different names, ended up with inspired by the the phrase poetry in motion, decided to go with Research in Motion and the company was, as Jonathan pointed out, officially became incorporated officially on March seventh night. Four Yeah. He received a essentially a loan from the Canadian government to help this, and he also had money invested by family and friends. UH. He and a fellow student, fellow by the name of Douglas Freegan

founded this company together. UM. Freagan became the vice president of operations. UH Lazarides became the president and CEO UM and UH and interestingly enough, we're back just to jump ahead just very quickly. A. Lazarides is still a CEO of rem it's RIM's got an interesting corporate structure and that it has two CEOs. And we'll get into more about that in a few, um, a few minutes when we jump ahead in in RIM's history, now after the founding,

what's the next piece of information you have? Because I jump ahead quite a few years, well four years? Well they Uh, the thing is, um, the budgee didn't take off at all, Um, but General Motors needed some LED notification systems for their assembly lines. And uh, you know, as you might guess, General Motors, especially back in the nineteen eighties, would have been a huge corporate client. UM. And that was his success, the CDs one system. And this was General Motors of Canada. Yeah, so it was

the Canadian Canadian branch of General Motors. There are quite a few plants up there, or were We're at that point. They've closed a couple, I think, Um, someone will right in and tell me that it's a lot of them. I'm sure, but um, and the National Film Board of Canada did you know about this? Uh? They needed a system for UH synchronizing film editing, and uh RIM built a system for them and it actually won an Academy award.

Is this the digit sink I believe, so the digit sinc film key code reader that was actually that took a few years too to be introduced, That wasn't didn't really hit the market til nineteen. But yeah, REM won both an Oscar and an Emmy for this technology. Uh. And here's the interesting thing. You start hearing this where you know, here we are talking about uh film key code readers and and and displays in an industrial automation and you're thinking, wait a minute, that doesn't sound like

a smartphone at all. Well, you're right. Uh, the early days of REM, we're not focused specifically on bringing uh telecommunications devices to market that you know, it was more of a kind of a general purpose research technology firm. And so you know, these early days that that kind of I don't know, you might want to call it a lack of focus, or you may just call it that they were being very versatile. Uh, they were diversified, yes,

diversified good. Yes, they were taking a proactive stance. Um. Yeah, it was interesting that they weren't really focused on telecommunications. Now now in nine so you know ninety they've they've introduced the key code reader. But just a couple of years earlier, RIM became the first wireless data technology developer in North America and the first company outside of Scandinavia to create connectivity products for the mobile texts UH network

wireless network. Now this was a a wireless network. They used radio frequencies. Uh. You is the packet data switching method, which we've talked about before in this podcast. You know, the way that you send data through packets, but in instead of it just being through a wire where you know, you would send us through u uh pulses of electricity, this would be through radio frequencies and UM, so mobile text is that was a data only actually is a

data only wireless packet switching network. So it wasn't designed to carry voice communication. It was just data communication. And the earliest products that that RIM focused on weren't consumer products. They were all retail products, enterprise products of stuff for point of point of sales terminals UH to allow point of sales terminals to send information wirelessly to some other machine. So again not not like something that you would immediately say, Wow,

that's that's really awesome. I can't wait to get my hands on it, because it just wasn't meant for the general consumer. Yeah, well, of course, the business to business market is uh can be very very lucrative. Um. And at the point, you know, we're talking about the late nineteen eighties, early nineteen nineties, Uh not everyone had a

cell phone. I mean they were they you know, these mobile products, and a lot of people had pagers, uh in the early nineties and um, of course in in the early nineties, that's that's sort of what RIM got into. They started looking at the possibilities of two way wireless communications. Yeah, that was one of the things they started to really research once they got involved in the mobi tex network.

Now in in nineteen uh so in the introduced the mobi Tex Protocol converter, which was the device that allowed them to create these products that would allow them to to tag on a converter box onto a an existing point of sales terminal. Yea. So it's kind of like an adapter that you could plug into your system and use the equipment you already have, um to have this wireless connectivity. Again, just an enterprise sort of thing, a retail sort of thing, not a not a consumer thing. Yeah.

Point of sale is is like at the cash register itself, Yes, where you're actually going to buy something. And then in another person joins RIM. And this is someone who will become very important. It's Jim Bassily and so. And at this point, the the CEO role is divided in twain.

Lazaridis is in charge of things like product development and research and Bassilely was sort of the the the financial guy and the business development guy, because those two parts of the CEO role, you know, just didn't didn't really the lazardis wasn't comfortable filling both of those parts of the role. He didn't think that he had the financial acumen to be able to do this effectively. He thought that there'd be a better way of leading this company.

And so that was Bassili's role when he came on. And the two are still co c e O s And that has actually led to some criticism of RIM throughout its history, but really that criticism has wrapped up quite a bit in and we'll we'll talk about that when we get a little further in. Yes, Mr Bassili actually put a quarter of a million dollars of his own money uh into RIM at that point, so that

was a pretty substantial investment. Wouldn't be the first time he would have to pay but we'll get into that too. That that that's a there was. Rims also had a history of some pretty nasty legal battles, but that's that's in the late nineties and further on. Yeah, as a matter of fact, a couple of the timelines that I

looked at, we're almost all about the legal battles. Yeah. No, there's a there's a stretch in the two thousand era where that's you know, there was no focus on the actual products, at least in the research I looked at as well. So in UH in ninety four we've got RIM offering its own point of sales terminal. So now now the technology has been incorporated directly into UH into terminals so that people can companies can buy them directly from RIM and they don't have to try and incorporate

one technology with another. UH. And then in nine RIM introduces the Freedom, which is a pc m c I a radio modem for computers. PC m c I A stands for Personal Computer Memory Card. International Association has several different types of cards, some of which are used to add memory to a computer, but the type two pc m c I a card is meant as a modem card. Right, So It's basically a a a card that you plug

into the insides of your computer. Ye, mainly laptops. Actually, a lot of laptops had expansion ports that you could you could plug a card into that one expansion port and it would allow you to do whatever, you know, increase the memory. And in this case, what it was doing is it was giving you a radio modem so that you can have wireless connectivity with your laptop, which was you know, that was a pretty new thing. There weren't a whole lot of solutions out there, and so

RIM was kind of getting into that. And in nineties six, RIM introduced the interactive pager, which is probably the most one of the most irritating lee spelled products of all time. Why because it has an act sign for the instead of a so that that irritates me. Well it um. It was sort of a revolutionary product. It's time though, because most pagers, uh, you know, we're one way. Yeah. It meant that if you had a pager, you could receive messages on it, and that's all you could do.

You could you could read through all those messages. But if someone sent you a page, you know, you would look down you see, oh, I've got a message from so and so, you put the pager down, you pick up a phone, you call that person and you know, have a discussion and rim. Because of its research in two way communication on the mob Tex network had come up with a way of creating a two way messaging service,

and the Interactive pager would let you do this. You would have a it had a quarty keyboard, and it had a little bitty screen that could show up to four lines of text and you could get a message from someone and you could send a message back. So essentially your text messaging. That's that's what this technology allowed you to do, which was new. This was not something

that was generally seen around this time. So suddenly you could get a pager that would allow you to do more communication where you wouldn't necessarily have to go and find a phone or or carry, you know, a cell phone. Along with the pager, you could actually communicate with people, assuming that they had a device that you know, a pager, that they could use to read the message you're sending them. Otherwise it's still all one way, um and it do you know how much it costs? No? Actually I don't

know that, Okay, So it's a two way pager. It also had all the functions of a one way pager, so it's not like it's you know, limited to that, but a two way pager text only four lines of text per screen. SI And that's not including the service fee.

That's that's the price of the product itself. So if you think about that, a six hundred and seventy five dollar two way pager, that's you know, that's that's a chunk of change, especially when you can go out and buy a fully featured smartphone without a contract for around that same amount. I mean, that's pretty impressive. It's a different world we live in now. Yeah. Yeah, and from

I've never actually seen one of these in person. I've seen photos online, but from what I've read, it was also a very large device, yeah, compared to especially compared to today's technology. It was. It was sometimes called the Rim nine hundred because that's how many pounds it weighed. No, no, it was. But but it had a flip top, you know, you would talk, you would lift the lid up and that had the screen on it. Then you had the

full quarty keyboard beneath you folded it down. It was like a brick and uh yeah it was it was big, um and it but it kind of paved the way for RIM's future. So in ven, this is the year after they've introduced the interactive pager, RIM becomes a publicly traded company on the Toronto Stock Exchange. Right, that helped him raise quite a bit of money, about well more than a hundred and fifteen million dollars um. Which when you're a company that's that's getting its foothold, that that's

a lot of money. Yeah, that's that's a ton yeah. Yeah. And so RIM joins the other Toronto Stock Exchange staples like poutine and then in what Canadians are Too Nice to be mean to Me? I Love Poutine. In ninety eight, Rim introduces the nine fifty wireless handheld device. Now, this one is a much smaller to a pager. This is the one that a lot of people remember when they think back to the old RIM pagers. This is this is the form factor that was really familiar to them.

Um and it also introduced, uh they licensed to technology from Puma Technology, the Intel Osinc synchronization platform, which actually allowed for sinking with the device, and before that it didn't have that capability. So now this two way pager has sinking capabilities, so you can sink it with another device, and it also could run applications written in CE language.

Um oh, and I guess we can take just a brief moment and and acknowledge the fact that the week we're recording this is sadly the same week we learned of the passing of the man who wrote the C programming language. So, uh so, rest in peace, Mr Ritchie. Uh So they the the M nine fifty wireless handheld can run CE language programs. Actually read about a guy who used to have a version of Super Mario on

this little pager. Really, yeah, he had a C programming language version of Super Mario that he would play on this pager. I can't imagine that would be terribly satisfying, but it was interesting. Well yeah, I imagine so. Um and so this one again was smaller than the nine hundred that we talked about a little bit ago, and it still had the quirty keyboard in the little screen. Right. Um yeah. At this point, RIM has become one of

Canada's fastest growing tech companies. Um. You know, and it's actually it's it's funny because um, from what I understand, the campus is right there at the University of Waterloo, right next door. Essentially UM syphiling off engineering students as fast as possible, probably UM. But some people have started calling this part of you know, the Kitchener Waterloo area as a silicon valley north. UM. I don't know that there's much of a valley, but you know, I guess

it's just the the slang for the term. But yeah, ninety nine is when they rim became listed on the NASDAC stock Exchange, which helped the company get another two fifty million dollars UM. And this is the point at which the device is The little buttons on the outside of the devices are beginning to remind some people of of seeds on the outside of fruit, which is how apparently the BlackBerry got its name. Although when BlackBerry was

first announced, it was just a wireless email solution. It wasn't specifically u attributed to a particular product, so in other words, you didn't call your phone a BlackBerry. At this point, Yeah, the BlackBerry referred to the technology that allowed to access email. And this is where black BlackBerry introduces the enterprise server software for Microsoft Exchange. So now we've got the devices that will allow you to access your corporate email or your Microsoft Exchange email if it's

not necessarily corporate, it's just that was the most common. UM. But it would allow you to check email on devices. It still didn't have a phone, so this is more like a personal digital assistant. But they introduced the RIM eight fifty wireless handheld and which looked a lot like the nine fifty, except now the eight fifty runs on the data attack wireless network. The nine ft is on the mobile text wireless network. So these are two different

wireless technologies. And that might sound strange to you, except that we still see that kind of stuff today. I mean we see it in multiple UH areas, because we've got C d M A versus G s M. Those are two different wireless technologies. You've got things like Wi max and LTE, those are two different wireless technology. So uh. In other words, BlackBerry was trying to broaden its market by creating devices that could work on other wireless networks

so that they could reach more consumers. And uh, the eight fifty is UM as as far as I can tell. The eight fifty is the device that really started the ball rolling in a way and just it's the it's the device that got uh people to really sit up and take notice, and people wanted to buy it. Um right, you know this is this is a narrow and a lot not everyone still not everyone had personal email, the

corporate email. Well that was very useful and people it was really starting to take off and it was it's important. Now all of a sudden, you're able to keep up with things that are going on in the office, um conveniently while you are out and about, while you're at lunch, um, while you're at home. You don't have to find a computer to log in and more. You can just check it and it's easy to do, so easy in fact, that people kind of want to do it, which is

why you couldn't get people to leave them alone. It's also why we call them crackberries. Uh now after the addictive drug. In two thousand, the RIM introduced the eight fifty seven and the ninety seven wireless handheld devices. This is these are the ones that really looked like p

D as you know, they had the monochrome screen. Uh, they had a larger so the screens larger, the quarty keyboards spread out there that these are the devices that look a little more squar ish or even rectangular, where you've got a lot more real estate for the screens. And in uh in two thousand one, Uh, that's where

we start getting into some legal issues. So two thousand one, a group of investors file a lawsuit in a US federal court and they they accuse RIM of using of infringing patents held by a patent company called n TP.

Now you may have heard our Yeah, if you heard of our our Patent Wars podcast, we talked about there were there are companies out there that really what they do is they acquire patents and then they either license those patents out to other companies that want to use the technology, or they sit on the patents and wait for someone to infringe on them and then sue the dickens out of them. Yeah, that's the problem with getting

people to sit up and take notice of you. That also means that people sit up and take notice of you. NTP noticed Um also in two thousand just as a note, the company raised another nine fifty million dollars by offering more shares of stock they were gonna need um. But yeah, I mean, at this point, RIM is a well established company two thousand, which is what sixteen years or so

after it's founding incorporate well formal uh incorporation corporation. So, um, yeah, I mean at this point they're they're a well known tech company. They're they're really making a mark in the world. And NTP sets up and goes we got toused. So two thousand two is a huge year for for M and they released the BlackBerry five eight one zero, which is the first handheld device that actually is called a BlackBerry.

The other ones had the BlackBerry technology in them, but you didn't necessarily call it a BlackBerry, although a lot of people use as as kind of the short form version of the name, like when you talk about a Windows based computer and you call it AC. Yeah. So the BlackBerry five eight one zero first the first true BlackBerry. It was also a smartphone, although it required a separate headset to use as a phone, and it worked on

the GSM network had a monochrome screen. And then later that year M released the six seven one zero and six seven two zero phones, which had integrated phones directly into the hand set itself, so you didn't have to have a separate headset to use the phone. They also released the six five one zero. So this is the other thing about BlackBerry. They have really catching names for

their devices. Six zero was the next Tell device, so it not only had the the BlackBerry Email service and all of that fun stuff, it also had a walkie talkie feature over breaker breaker uh. And then later on they introduced another one of the next tells. Uh. Actually a couple of years later, but they introduced a Next Tell phone that was the first BlackBerry to hold have a GPS receiver in it. Um, they introduced the first c d M a BlackBerry, which was the six seven

five zero. You're never gonna keep all these straight. We should write a quiz for this and all they are the numbers, and I would just be evil, all right. So then um, they also introduced a Mobile Data Service, which was an environment for apps that could access corporate data. Now, RIM has never really gotten wholeheartedly into the whole apps game. Uh. They a little bit, but not like other companies like

Apple and Google. So in fact that that kind of plays into why they are in the situation they're in right now. Um. They also introduced what would later become known as the BlackBerry Internet Service, which was what allowed people to access email clients that were web based as opposed to the Microsoft Exchange stuff. So they could suddenly and they can now access not just their corporate email, but if they had a web based personal email address,

they could access that as well. And in two thousand two, a jury finds in favor of nt P in their their lawsuit about patent infringement and orders them to pay twenty three point one million dollars. And boy does that get more complicated. Just a few months later, that was in November, and in in August or two thousand three, a judge said that the BlackBerry could not be sold in the United States. Yeah. Um, but Rim appealed that decision and yeah, so basically they were allowed to pending

the result of the appeal. And this was important for him because that same year they were the company started releasing devices that were aimed more for well, they we call them pro sumers, right, sumer. It's kind of the early adopters. We've talked about them before in the podcast.

But they're not not your average consumer because the BlackBerry was you know, it's kind of a luxury product for anyone who is just interested in the smartphone and is not going to get you know, reimbursed by their company. But yeah, this was aimed at professionals who were interested in smartphones, but they weren't directly tied to whatever it is they did for a living, so they wanted as

a personal device. Um. So, of course RIM's very much interested in keeping their their products up and running, especially in the United States because that's where one of the big markets. That's that's the location of a large market. I mean, you know, you've got other markets for smartphones, but a lot of those are already tied up by phones coming out of Japan. So going to two thousand four, Uh, here's something interesting. So by now they're starting to release Uh.

In two thousand three, they also started releasing Blackberries that had color screens, because up to that point they were all monochrome. But in two thousand four they releases the BlackBerry five seven nine zero, which has a monochrome display and no phone. And why would they do that because people on the mobile text network really wanted to have all these cool features and they didn't have a device

that would run on Mobile TEX network. So the five seven nine zero was the first BlackBerry device to run on Mobile Tex. But it couldn't have a phone because it was data only and they didn't have a void solution. So uh there there you go, monochrome display. It was like it was like a device that looked like it came out two years previously, you know, compared to the stuff that had come out in two thousand three. Well,

two thousand four was important for another reason too. That was when uh, when BlackBerry had more than one million subscribers around the world. UM, and in two thousand four late UH that an appeals court had decided that most of the claims that UH that mt P had brought were were still valid UM and news form. But they also asked the court asked the the lower court UM that it made the decision to look at the case again,

so we had to reopen that. And they said that the the original ruling had some problems with it, that that the the actual allegation still held true, but the ruling itself had problems, so it needed to go back into the court system. So then get to two thousand and five. Now RIM has over five million subscribers, which is enormous growth. Yeah, but it's the point at which the RIM is getting to the point where I think they're getting a little weary of this lawsuit thing. Yeah,

so they get so they agreed to a settlement. Yeah, a crazy settlement because remember it was originally they were gonna have to pay twenty three point one million dollars. Now it's four and fifty million dollars to settle the lawsuit. Yeah, but NTP does not seem too um happy to just take that. They now in TPS thinking hey, we got a real shot of of we smell blood. Yeah we can,

we can really really uh twist the knife here. And so a judge gets kind of fed up with what's going on with the the failure to create a deal, and the case is sent back to federal court. And uh and so you've got the case going back to federal court. Uh. The rim appeals to the U. S. Supreme Court. The Supreme Court says, no, this needs to go back to federal court. Um. Judge refuses to force in TP to actually agree to the four hundred fifty million dollar settlements. So now INTP has a real chance

of getting even more right. Right. As a matter of fact, in December of two thousand five, they said that they would be willing to settle as long as they got a five excuse me, a five point seven percent royalty for the life of the patents. Yea, So now that would be lucrative. Yeah, this is like an actor landing a deal to get part of the merchandising rights for anything that comes out of the movie that actors in.

You know, that's where the real money is. Yeah, I mean, ticket sales are one thing, but you're going to really make it up with those T shirts and action figures and I'm just appealing to my geek friends now. But also that same year two thousand five, just to get a little bit of positive news out there, Real introduced the BlackBerry Dred, which had the first true color screen and also introduced themes to the BlackBerry handset. So now

that that became like the flagship product for for that year. Yeah, if you've been using a BlackBerry for a long time, you might remember the the Brujaja that had come up where they were saying in the news that it was possible that BlackBerry would have to stop offering service in

the United States. That's what we're talking about right now, because at this point there uh MTP is basically saying, hey, look, well we'll allow thirty days before cut off, and and government users don't necessarily have to have their service cut off right because black we can't settle, they're gonna have to stop. Blackberries became really really important for government officials, for military and for first responders because it provided a

fast and secure way to communicate. So uh, you know that it could have had catastrophic results if all service had been cut off. Can you imagine, I mean, you could fire departments not being able to communicate as as easily as they had been. It would be a massive blow. And there's some things that you know, you just gotta say, Okay, well, look we're gonna allow these services to continue even if we can't come to an agreement, because otherwise it would

be catastrophic. So uh. At the same time, Bassili was saying that they that the company was looking at ways to create alternatives to the technology that was in question so that they could continue offering service even if the the the questionable technology was shut down. So this is kind of a work around they're looking at. Now. We then get into a point where RIM agrees to pay INTP a settlement of six hundred and twelve and a half million dollars and um, that's the settlement and for

a quote perpetual paid up license going forward end quote. Yeah, and uh it's pretty huge here. But um, you know, we're still at this point that this has not actually been settled, and uh, it's it's really getting ugly and and people who are like the stakeholders in the company are nervous because you don't know if the service is going to be cut off or not. So RIM is

actually really suffering at this point. Well, they've they continue this, uh, this court case, which at this point was actually more interesting too to the technology world then the actual products that Blackberries putting out. Um. It also was starting to drive business over to Palm. You know, as people were saying, I don't know if this BlackBerry is going to be working in six months, I need to go get a device that I know I can depend on. And so

Trio sales actually really took off at this point. Um. But eventually the uh, the whole mess with NTP gets set old and and uh as a result, the shares actually get a boost and uh and things start to look better for REM. Although in two thousand seven, RIM had to pay two fifty million dollars to UM to

the United States because of some problems with their stock options. Uh. They were issuing stock options at less than fair market value to some of their executives, and so Lazarides and Basili had to pay around five million dollars apiece to cover the cost of the accounting review that was ordered by the United States government, and UM lots of lots of executives had to pay back some some money because the stock options they have been granted were granted at

the wrong price. So again kind of a black mark on RIM. Well, at this point, now that the lawsuit is settled, UH, they're able to focus on on business again in a more unified way. They're not their tension is not divided anymore. UM. In late two thousand seven, Uh, there were more than ten million BlackBerry subscribers. UM. You'll remember in two thousand seven to other products were announced that would eventually cause great problems for rem that that

would be the iPhone and the Google Android operating system. UM. But in the meaning, but keeping in mind that Blackberries still established as the business, the the the corporate UM solution for messaging and for for for you know, smartphones. Uh, you know, the Trio was was still pretty far behind UM, and it was also still very much a an enterprise product.

It wasn't a consumer thing. UM. Alcatel Lucented had an agreement to distribute Blackberries in China, which you know as a huge market UM and as a matter of fact, that that stock boost from that actually made RIM the most valuable company in Canada based on market capitalization UM.

Then in two thousand seven, again they released the BlackBerry Professional Software UM, which allowed companies with their own email server UM in house to UH to transmit to Blackberries UM, enabling people who work in I T for many companies to get messages at two in the morning going the

servers down UM. It thrilled them to no end. I am sure I've been around people for whom that is a oh I gotta go UM and UH they actually had their first BlackBerry store and Farmington Hills, Michigan UM along with the cell phone company Wireless Giant UM, so that that was sort of a unique thing for the time to UM. They added more subscribers again, one point six five million by the end the very end of two thousand seven, pushing him up to twelve million UM,

and UH RIM started its own copyright. UM not copyrighted its own patent case the year after UH telling saying that Motorola had and fringed on some of its patents. UM. So you know, Motorola sued them back, of course, as is typically the case in these situations, saying that some of the there are u S patents that they owned that BlackBerry was infringing on. And then they started not

naming their stuff with boring old names. This is when the you could tell that the influence of the consumer smartphone was having an effect on BlackBerry when they came out with the Bold in two thousand eight. I remember the Bold, the Curve, the Pearl, um. All of these devices were aimed at various slices of the consumer market

with an attempt to try and gain traction there. UH. Although BlackBerry got a lot of criticism from technology journalists and analysts, saying that while they were redesigning the hardware and trying to make that more more attractive to the average consumer, they hadn't done a lot of work with the operating system, and the operating system had remained pretty much the same over the last several years, and that as a result, it was starting to look stale, particularly

against things like the iPhone or Google Android. And another part is, again I mentioned earlier, BlackBerry just didn't support apps to the same extent as Android or the iPhone. And you think, you know, apps really extend the functionality of these devices. You know, you can suddenly do all these amazing things on the device. Sometimes it's games, sometimes it's a service that will let you, um uh, navigate the world more easily, or to navigate shopping more easily.

BlackBerry didn't really have that to the extent that iPhone and Google did. And as a result, if you're a consumer, you know, you're not just looking at most consumers, I guess are not just looking at the form factor, although that definitely plays a role in your choice, but just

why can you do with it? And really BlackBerry was falling behind and so um some people said that might have been what led BlackBerry to introduced the Playbook, which was Blackberries or Rims tablet device seven inch tablet and uh. It was a very snazzy tablet of the operating system was very smooth. It was not the standard BlackBerry operating system. They had gone to another company to outsource that and uh,

and it would support apps. UH. The interesting some interesting things about the the playbook, and we've done a whole podcast about the playbook, so you can listen to that as well. But some of the interesting points about it or that you could not access contacts and email and then that sort of information with the playbook on its own.

You had to pair it with a BlackBerry smartphone. And the idea here was that if someone were to get hold of your tablet, they wouldn't be able to access your corporate information because it was not stored on the device itself. It could only be accessed when paired with a smartphone. Yeah, of course, UH. In a lot of enterprise UH situations, there's a lot of proprietary data that needs to be protected, business plans and UH you know

Apple is we've talked about how secret Apple is. There far from the only UH company and all forms of business that wants to keep its trade secrets private. UM, that's that's one of the big reasons why UH I T professionals are still very big on blackberriers that they've they have very strong security versus UH people. That was one of the big arguments they said, well why don't why don't more people switched to the iPhone. If people like the iPhone, they said, well, the iPhone is not

as capable. Keeping in mind this is you know, some time ago, and things have changed somewhat, but you know, that was the big argue even right away, was well, you know, the iPhone may be nice, but it doesn't have the same kind of security that a BlackBerry does. A lot of the transmissions on a BlackBerry are encrypted. Yeah, and they're passing through Blackberries servers yes, um, which is, by the way, are most of which are located in Canada.

Which that was part of the problem when when Barack Obama wanted to see if he could keep his BlackBerry once he became president of the United States. That was one of the issues that was brought up was the fact that this this data would be passing through servers

in another country. And we all know that Canada is poised to strike at the United States at a moment's notice, So they wanted to be sure that the president's information would remain private and and untouched by anyone in Canada who had designs on the presidency of the United States of America. Well, it might be exaggerating a little, but there was there was an issue well. And and the thing is too that it was passing out of the government's hands and in to the hands at a private

company too as well. That's another issue. Even if even if rem we're located in the United States, there would be some serious questions about that kind of thing. But the BlackBerry remains a company to which many people are extremely loyal. UM. They have made good products with a good reputation for many years, and the UH the enterprise security layer is also something that gives people in business

a lot of confidence in the product. Unfortunately, UM, at the time we are recording this, BlackBerry has been fending off a pr um onslaught that they've had to deal with because the servers and apparently there was a machine that went down in the United Kingdom one of their course switches. Now, a course switch is a device that helps route traffic. It takes incoming traffic and sends it

to the next major hop along the line. But if you're talking about a course with that's something that's located on the backbone of a system. So that's a major

major point of failure. And like many companies, RIM has entrusted its equipment to a redundant backup system also in this case which failed UM, so the company throttled its network traffic all around the world and so for the past few days before the day we were recording this UM in in mid October of two thousand eleven, BlackBerry has been suffering from people being very upset about it, the traffic disruptions and UM As a result, a lot

of people have been questioning whether, as BlackBerry has been behind UH, the Android and iOS operating systems for the past couple of years in terms of subscriber growth, whether BlackBerry will continue as a viable option for for enterprises because both Apple and Google see opportunities in the enterprise market. Yeah, this was This was particularly bad timing for this to happen for to Rim because you've got you've got them in a precarious position there. Their sales have have had

some problems over the last few quarters. They've had revenue problems over the last few quarters. The company looked like a company that's in trouble, and people were pointing at the operating system looking out a date. Although UM black Rim is supposed to to introduce a new operating system any day now UM, but for this to happen right after the iPhone four S announcement, So you've got a new iPhone on the market, and the upcoming Google Android

ice Cream Sandwich announcement. See, you're gonna have a new version of the Android operating system, plus the release of iOS five, the release of iOS five, the release of a new Samsung Android phone that's supposed to be really advanced.

These are all bad things for to to you know, it's all happening around the same time, and for RIM to suffer a catstrophic failure like this when everybody else is releasing positive news that it's it's tough and um and to be fair, you know, it wasn't that information

necessarily got lost during this process. Most of it was just delayed by hours, Like there'd be a three hour delay from when someone would send something and when you might receive it, which of course is bad if it's an urgent matter, but anyway, so they're dealing with that

right now. They're also dealing with other issues, like there are governments around the world that want to be able to access the information that's sent across the BlackBerry um network, and so that raises ethical questions like do you do you agree to do that, do you agree to give the governments the access to the information? Do you keep it encrypted? Because you know, you're trying to serve your customers and m has had to deal with some pretty

sticky situations there. They also got some bad press inn during the riots in London because it turned out that a lot of the kids in London have Blackberries and they were using the BlackBerry messaging service, which is encrypted service, to send messages between each other to target specific businesses during the riots. So it was it was it would have required the cooperation of BlackBerry itself to provide the government,

uh you know, they couldn't be spied upon. They would have to get BlackBerry to share that information with them. Of course BlackBerry agreed to cooperate, but it doesn't help again that that for a lot of people. That's the problem, big pr problem. Yet has been a rough year for

Research in Motion now. Some people have already said that this might be the beginning of the end, or that perhaps Research Emotions should look at selling off its assets to other companies and just kind of dissolving so so elements of BlackBerry would continue to live on, it's just

they would go under a different corporate name. People said the same thing about Apple about twenty years ago, right, So there's there's always the chance that that research in motion could turn this around and become a very powerful player in the telecom space. Again, I mean, there's no thing necessarily stopping them. It's just that the you know, the odds are definitely stacking against them, but that doesn't mean they can't overcome those odds. So we'll have to

watch and see and find out what happens. We'll also have to see if if they they have a change in leadership, because for the last couple of years, RIM has also received a lot of criticism about having co c e O s and saying that that kind of sends a mixed message to shareholders and it might be better to have a single person hold the position of CEO to give a unified vision for the company and be able to message that out to everybody, both consumers

and retailers there, shareholders, everyone, and and employees of REM. So it's a complicated issue, and uh, I'm glad we tackled this. It was. It's an important company definitely, So if you guys have any other major companies you'd like us to talk about. Or maybe we could do an episode where we talk about a bunch of smaller but related companies. That's also possible. Sometimes companies are are young enough and small enough where we can't do a full

podcast about them, but let us know. You can send us an email that addresses tech stuff at how stuff words dot com, or shoot us a message on Twitter or Facebook. Our handle at both of those places is text Stuff hs W and Chris and I will taught to you again really soon. Be sure to check out our new video podcast, Stuff from the Future. Join how Stuff Work staff as we explore the most promising and perplexing possibilities of tomorrow. The How Stuff Works iPhone app

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