A million phones in two months. Mike Lazaridis, co-CEO of Research In Motion (RIM), the company behind BlackBerry, called the Storm “the best-selling initial product we ever had.”
Then Verizon started sending them back. Its marketing chief later said virtually every one of the first million needed replacing, and Verizon wanted around $500 million from RIM. The authors of Losing the Signal say the repair program cost RIM more than $100 million.
The Storm existed because the iPhone had landed, and Verizon, which couldn’t sell it, wanted an answer. RIM had won the business world with a keyboard. It built its first touchscreen phone and shipped it in late 2008, reportedly after skipping a key round of testing.
I keep thinking about the moment Verizon asked. If I’d been the one answering, I’d have said the fastest we could do was 24 months. They’d negotiate, and we’d settle at 18.
If they threatened to take the business away, I’d have let them go. A confused, overambitious customer isn’t worth lowering my own standards for. The board might fire me, but I’d rather have someone else make that stupid move when I’m not at the helm than make it myself.
A million is a flattering number. It says the market wants the phone. It says nothing about whether the phone works.
If RIM had built more of them, the number would have looked better and the pile of returns would have been bigger.
I think fear of missing out drove it. The iPhone was getting all the attention, and Verizon was a customer RIM couldn’t afford to lose. The smarter bet, in my view, was to keep improving the keyboard phone that paid the bills.
One of the RIM executives involved, Larry Conlee, said it plainly afterward: “We thought it was within our ability to get it done. We were wrong.”