The $1.6 Billion Button Nobody Pressed: How BlackBerry's CEO Watched the iPhone Demo and Decided Touchscreens Were a Joke

Mike Lazaridis was not impressed.

It was January 9, 2007, and the co-CEO of Research In Motion — the company behind BlackBerry — was sitting in the back of the Moscone Center in San Francisco. On stage, Steve Jobs had just pulled a rectangular glass slab from his jeans pocket and was swiping his finger across it like a magician. The audience was losing their minds. Lazaridis was taking notes.

He scribbled: "No physical keyboard. Battery life terrible. Can't type emails."

Then he walked out before Jobs finished, drove back to his hotel, and called his engineering team in Waterloo, Ontario. His message was clear: Apple had just unveiled a beautiful, expensive toy for consumers who didn't know what they wanted. BlackBerry users — the lawyers, bankers, and government officials who sent 10,000 emails a day — would never give up their physical keyboards for a virtual one. The iPhone wasn't a threat. It was a distraction.

Two years later, BlackBerry owned 20% of the global smartphone market and was valued at $83 billion. Five years later, they were on life support. By 2016, they had stopped making phones entirely.

This is the story of how the most addictive mobile device in history — the "CrackBerry" that presidents and CEOs couldn't put down — became a punchline. Not because they failed to innovate. Not because they lacked talent. But because Mike Lazaridis and co-CEO Jim Balsillie made one catastrophic bet: that enterprise customers would never care about touchscreens, apps, or the consumer web.

They were spectacularly, $1.6 billion wrong.

The Empire: When BlackBerry Owned the World

In 2007, BlackBerry wasn't just a phone company. It was a cultural phenomenon.

The BlackBerry 8800 — released two months after the iPhone announcement — was the device of power. If you had one clipped to your belt, you mattered. Barack Obama fought the Secret Service to keep his. Oprah called it one of her "favorite things." Goldman Sachs executives held them under the table during meetings because they literally could not stop checking email.

The magic was the keyboard. Those tiny, clickable plastic keys were engineered with obsessive precision. The BlackBerry keyboard had a "sweet spot" — a tactile bump on the J key so your thumbs could find home row without looking. Touch typists could hit 60 words per minute on a 2.5-inch keyboard. It was a physical marvel.

But the real moat was BlackBerry Enterprise Server (BES) — the backend infrastructure that made IT departments weep with joy. BES let companies control every device remotely: wipe them if stolen, enforce encryption, push emails in real-time through BlackBerry's proprietary servers in Waterloo. No other phone came close. If you were a CIO in 2007, BlackBerry wasn't a choice — it was the only option.

By late 2008, BlackBerry had 80 million users, a 20% global market share, and a stock price that had gone from $10 to $140 in five years. Mike Lazaridis and Jim Balsillie — the engineer and the business guy — were Canadian heroes. They'd beaten Nokia, Microsoft, and Palm. They'd built the first smartphone empire.

Then the iPhone started selling.

The Denial: "Nobody's Going to Buy That Thing"

Here's what Mike Lazaridis saw when he evaluated the original iPhone:

Battery life: The iPhone lasted about 5 hours on a single charge with moderate use. BlackBerries could go two days. Apple had sacrificed battery for a giant screen and a power-hungry ARM chip. Enterprise users would never accept that.

No physical keyboard: The iPhone's virtual keyboard was a disaster in early reviews. Walt Mossberg called it "a work in progress." David Pogue said it was "frustrating." Lazaridis was convinced that lawyers typing 200-email days would throw the thing out a window.

Weak security: The iPhone's email was consumer-grade IMAP/POP3. No BES-style encryption. No remote wipe. No IT control. CIOs would never approve it.

Expensive: $499 with a 2-year AT&T contract. BlackBerries were often free with corporate plans.

Lazaridis wasn't being arrogant. He was being rational. Every metric said the iPhone was an overpriced consumer gadget that would never penetrate the enterprise. Jim Balsillie agreed. In an interview weeks after the iPhone launch, he said: "It's kind of one more entrant into an already very busy space with lots of choice for consumers... But in terms of a sort of a sea-change for BlackBerry, I would think that's overstating it."

RIM's internal strategy meetings reflected this thinking. According to multiple engineers who were there (and later spoke to journalists), the leadership's response to the iPhone was essentially: "Wait for Apple to realize that touchscreens and app stores don't matter to enterprise. Then we'll own both markets — business AND consumer."

They decided to build the BlackBerry Storm.

The Panic: When the App Store Changed Everything

By mid-2008, something strange was happening.

CIOs were calling BlackBerry's sales reps with a new problem: their executives wanted iPhones. Not for email — they'd keep their BlackBerries for that — but because their kids had shown them this thing called the "App Store," and suddenly their phone could do everything. Check baseball scores. Play games. Read the New York Times with real formatting. Stream music.

BlackBerry had apps, sort of. They were Java-based, slow, and required downloading files from sketchy third-party websites. Nobody used them. But the iPhone's App Store — launched July 2008 — had 10,000 apps by December. Angry Birds alone was downloaded 50 million times.

Mike Lazaridis watched in disbelief. These were serious people — Fortune 500 executives, government officials — choosing phones based on... games?

But the real threat wasn't Angry Birds. It was this: once executives had iPhones, they discovered they could check email on them. Not through BES — just regular IMAP. And it worked fine. They didn't need BlackBerry's servers anymore. They didn't need IT's permission.

The enterprise moat was cracking.

RIM's response was the BlackBerry Storm, launched in November 2008. It was RIM's first touchscreen phone, rushed to market in 9 months. The headline feature: a "clickable touchscreen" that physically pressed down when you tapped it, giving you tactile feedback.

It was a disaster.

The screen was laggy. The click mechanism felt mushy. Apps crashed constantly. Verizon — the exclusive carrier — had to issue multiple software updates. Reviews were brutal. David Pogue called it "an unholy mating of two different input methods." Engadget said: "RIM should be embarrassed."

The Storm sold 1 million units in the first month — impressive — but returns were catastrophic. Some Verizon stores reported 50% return rates.

Mike Lazaridis had tried to build a touchscreen BlackBerry without abandoning the physical keyboard philosophy. He'd tried to have it both ways. And he'd failed.

The Paralysis: The OS That Couldn't Evolve

Behind the scenes, BlackBerry had a bigger problem: their operating system was dying.

BlackBerry OS — the software that powered every device — was built in the late 1990s for one purpose: push email over slow 2G networks. It was a marvel of efficiency. But it was written in C++, single-threaded, and never designed for touchscreens, apps, or mobile browsers.

Apple's iOS and Google's Android (launched in 2008) were Unix-based, multi-threaded, and built for the modern web. They could run rich apps, stream video, and handle complex UI interactions. BlackBerry OS could... send email really fast.

RIM's engineers knew this. In 2008, a group of senior developers proposed scrapping BlackBerry OS entirely and rebuilding on Linux. Mike Lazaridis said no. Too risky. Too expensive. Instead, he told them to "optimize what we have."

So they tried. They bolted a webkit browser onto the OS. They hacked in an app framework. They added touchscreen support. But the foundation was rotting. Apps crashed. Scrolling stuttered. The browser was slower than Safari on the original iPhone from 2007.

Meanwhile, Jim Balsillie — the business-focused co-CEO — wasn't helping. He was obsessed with buying an NHL hockey team (he tried three times and failed). He was fighting patent lawsuits. He was traveling constantly, giving speeches about "mobile computing" while his engineers were drowning.

The two CEOs barely talked. Lazaridis ran product. Balsillie ran sales and strategy. There was no unified vision. No one was empowered to make the hard call: kill BlackBerry OS, start over, and accept two years of pain.

By 2010, BlackBerry's market share was falling. The iPhone 4 had launched — with a retina display, FaceTime, and 300,000 apps. Android phones were everywhere. And BlackBerry's flagship device — the Bold 9700 — still looked like a phone from 2006.

The Hail Mary: The Tablet That Shipped With a Broken Email App

In April 2011, RIM finally unveiled their response: the BlackBerry PlayBook.

It was a 7-inch tablet running a brand-new OS called BlackBerry Tablet OS (later renamed BlackBerry 10). The OS was actually impressive — built on QNX, a real-time Unix system RIM had acquired. It was smooth, modern, and multi-threaded. Engineers inside RIM called it "what we should have been building for phones five years ago."

But the PlayBook shipped without a native email app.

You read that right. BlackBerry — the company that invented push email — launched a tablet that couldn't check email unless you tethered it to a BlackBerry phone via Bluetooth.

Jim Balsillie defended this in interviews: "The PlayBook is designed to work seamlessly with BlackBerry phones. That's the security model."

Reviewers destroyed it. Walt Mossberg wrote: "I can't recommend this product." The Verge gave it a 5.0 out of 10.

The PlayBook sold 500,000 units in the first quarter — then collapsed. RIM took a $485 million writedown. Best Buy was stuck with pallets of unsold inventory.

It was a humiliation. And it revealed the core problem: RIM had spent so long defending their enterprise moat that they'd forgotten how to build products people actually wanted.

The End: When the Board Finally Pulled the Plug

By January 2012, BlackBerry's market share had fallen to 9%. The stock was at $15 — down from $140 in 2008. Mike Lazaridis and Jim Balsillie were finally forced out by the board.

Their replacement was Thorsten Heins — a former Siemens executive who'd joined RIM in 2007. His job was to launch BlackBerry 10, the QNX-based OS that was supposed to save the company.

BlackBerry 10 finally launched in January 2013 — six years after the iPhone. It was... actually pretty good. The gesture-based UI was elegant. The Hub — a unified inbox for email, texts, and social media — was genuinely innovative. Reviews were cautiously positive.

But it was too late.

iOS had 800,000 apps. Android had 700,000. BlackBerry 10 launched with 70,000 — mostly garbage. Developers didn't care anymore. Enterprise customers had already moved to iPhone and Android with Mobile Device Management (MDM) software that replicated BES.

BlackBerry 10 phones sold poorly. By September 2013, RIM announced they were laying off 4,500 employees and exploring "strategic alternatives" (code for "we're for sale").

In 2016, BlackBerry officially stopped making phones.

The Legacy: The Fastest Fall in Tech History

From a $1.6 billion profit in 2011 to a $646 million loss in 2013. From 20% market share to 0.01%. From 80 million users to fewer than 1 million.

BlackBerry's collapse wasn't a slow decline — it was a cliff.

What killed them wasn't the iPhone. It was the decision — made in January 2007 — that the iPhone didn't matter. That enterprise customers would never care about touchscreens or apps. That physical keyboards were forever.

Mike Lazaridis was an engineer's engineer — brilliant, disciplined, and rational. He built a product that solved a real problem better than anyone else. But he couldn't imagine a world where people chose phones based on Instagram and Spotify instead of email efficiency.

Jim Balsillie was a deal-maker who saw mobile computing as a business strategy problem, not a product problem. He thought RIM could out-negotiate and out-market their way past Apple and Google.

They were both wrong.

Today, BlackBerry exists as a cybersecurity and software company. They're profitable. They're boring. And somewhere in their Waterloo headquarters, there's probably still a bin full of unsold PlayBooks.

The lesson isn't "always embrace new technology." It's this: when your customers start choosing your competitor's inferior product over your superior one, you're not losing on features. You're losing on the thing you didn't think mattered.

For BlackBerry, that thing was joy.

The iPhone wasn't better at email. It was better at making people smile when they used it. And in the end, that was all that mattered.