How Blackberry Ignored the 2007 Touchscreen Warning

In January 2007, Blackberry co-CEO Mike Lazaridis watched a live feed of Steve Jobs holding the first iPhone, and the room in Waterloo fell silent as Apple’s device had no physical keyboard, just glass. Blackberry had dominated enterprise phones, shipping over 8 million BlackBerries in 2006 and holding nearly 50% of the U.S. smartphone market. But as the engineering team passed around their own touchscreen prototype, sales head Jim Balsillie warned: their entire product was built on tactile keys, trusted by banks and governments for security and speed. Apple’s iPhone, priced at $499, would need to beat Blackberry’s messaging and battery life-features businesses swore by. Blackberry’s leaders reviewed internal surveys that showed 76% of their customers refused to give up the keyboard. Still, after the iPhone moved over 6 million units in its first year, Blackberry rushed the Storm, its first touchscreen model, through development. The Storm launched in October 2008, but with over 900,000 returns due to screen failures and lag. That year, Blackberry’s share price peaked at $148 but would fall below $10 within five years. The decision in 2007 not to pursue a true touchscreen flagship let Apple carve out 46% of the U.S. smartphone market by 2011, while Blackberry’s was down to 3%.