BlackBerry: When the Tech World Met Wall Street


A decade ago, the BlackBerry phone was a ubiquitous accessory in every center of power, from corporate chambers to the halls of Congress. Barack Obama used a BlackBerry throughout his presidency, even long after the phone’s mass popularity had waned. The “Crackberry”, as it was dubbed, became the status symbol of the era, projecting a new image of a workaholic and information-obsessed elite always emailing, texting and “connecting”, at all hours , day and night.

Then, as soon as it revolutionized the mobile market, the BlackBerry was removed from the commercial landscape by Apple’s iPhone. The company went from an almost 50 percent market share at its peak in 2008, to close to zero (save Obama) just a few years later.

The new movie Thornberry describes the rise and fall of the once-dominant tech company, and how it lost to Apple. It’s one of several brand-centric films that have come out this year, a genre that Hollywood seems especially excited about right now. Many of them seem to act as thinly veiled promotional campaigns. There’s Ben Affleck’s new movie Loft about Nike’s successful signing of Michael Jordan and the production of his wildly popular sneakers, which recently sold on Amazon Prime; Apple TV produced the Tetris film released earlier this year; and Jerry Seinfeld is making a movie about… Pop Tart.

The BlackBerry film, for the most part, avoids the pitfalls of the genre, which presents itself all too often hagiographic or sociopathic portraits of the genius founder triumphing over the market, especially when it comes to the tech industry. The procession of biopics about Steve Jobs after his death and The social network‘s portrayals of Mark Zuckerberg are prime examples of the former; The fallout (about Elizabeth Holmes) or WeCrashed (about Adam Neumann) TV shows, examples of the latter.

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Instead, BlackBerry presents a uniquely incisive look at the political economy of the 2000s, and how it shaped the arms race among tech companies to develop the smartphone. That period not only killed BlackBerry, but also two consumer electronics giants of the 20th century, Nokia and Motorola, and led to the rise of one of today’s most powerful companies, Apple.

The film tells the story of BlackBerry’s co-CEOs Jim Balsillie (Glenn Howerton) and Mike Lazaridis (Jay Baruchel), who embody the dissonance between Wall Street financialization and the early ethos of Silicon Valley. As it turns out, this culture clash also makes for a great comedic duo.

Today, tech companies have become synonymous with Wall Street, which is often more concerned with their stock values ​​than new products. That trend is aptly epitomized by Apple, which hasn’t developed a truly new device since Tim Cook took over in 2011. But in the early years of the tech revolution, many pioneering engineers in the Valley were wary of the model for short-term returns of finance, which they saw as anathema to innovation.

The plot of the film captures how the merging of these conflicting business interests within BlackBerry was resolved and ultimately demolished by Apple.

In the early years of the tech revolution, many pioneering engineers were wary of the short-term return model of finance, which they saw as anathema to innovation.

Directed by Canadian actor and filmmaker Matthew Johnson, the film loosely adapts a 2015 book about the decline of BlackBerry called Losing the signal. Authors Jacquie McNish and Sean Silcoff have praised the film for its overall accuracy, though obviously embellished and simplified for dramatic effect.

After being fired from his investment banking job for advising clients to commit tax fraud, Balsillie joined Research in Motion (BlackBerry’s parent company), which at the time was a fledgling startup with piles of debt coming out of a small office space in Waterloo, Ontario works. . The founders Lazaridis and Douglas Fregin (Johnson, the director) embody the tech-utopian spirit of the 90s: idealistic engineers and engineers Star Wars nerds Balsillie, always in a suit, is haughty and withdrawn, a man of Wall Street.

Lazaridis brings Balsillie on board to raise the company’s finances, but immediately clashes with his management style. Balsillie is set on shattering the company’s startup culture and turning it into a high-efficiency corporate venture for court investors. He is only concerned with getting a product on the market and goosing share prices, while the founders are meticulous and obsessive about creating a high value product that will revolutionize communication.

The financial stake is only increased when BlackBerry faces the threat of a hostile takeover, which requires the company to obsessively focus on keeping its stock price valuation high enough to avoid a sale to foreign investors.

Another flashpoint in this tension plays out over BlackBerry’s move of manufacturing to China. Balsillie insists that outsourcing to China will lower costs and allow the company to boost sales, but Lazaridis, the head of product development, refuses because he thinks it will lower the quality of the cellphone. Throughout the film, Lazaridis neurotically fixates on an eerie humming sound emanating from all manner of electronics manufactured in China, which he laments as representing the “emptiness” of modern consumerism.

As the BlackBerry begins to dominate the mobile market, Balsillie’s business strategy wins and the company changes to Wall Street’s taste. Lazaridis eventually turns into a businessman and a convert to Balsillie’s obsession with returns, leaving his business partner Fregin as the only holdout defending the original startup spirit. In the corporate world, it’s a story as old as time, albeit a powerful one.

The film’s subtext captures how competition between firms is mediated by contracts and other agreements, shaped by government policy rather than the nature of the market.

Trade is one arena where this takes place. The iPhone has certainly conquered the smartphone market because of its unique product features and design. But in the past decade, Apple has also undoubtedly gained an advantage by setting up shop in China and controlling global supply chains as they were organized by decades of US trade policy. BlackBerry took a hit by holding on while other smartphone makers didn’t refine their supply lines as effectively.

In the film, the main battleground between BlackBerry and Apple is their business partnerships with the telecommunications monopoly, which controls access to the market. Apple infamously delayed entering the smartphone market for years because the company did not want to deal with the slow and sclerotic carriers, which Steve Jobs called the “four openings”.

BlackBerry and Apple first had to convince the telecom giants that it was worth the investment to improve their infrastructure to carry smartphones without crashing the servers from data overload. The film accurately conveys that the major carriers, like AT&T and Verizon, were really the primary business clients that the smartphone makers were competing for. Consumers came second.

The telecom carriers also put their thumbs on the scale during the smartphone arms race, both collecting discounts from the mobile phone makers and also periodically discounting certain products to increase their sales. Even if the phone makers took losses in the short term, sales had to increase continuously for the carriers to justify investments and ensure that more smartphone users could access the network without it crashing.

The carriers were key intermediaries in determining the playing field for competition between BlackBerry and the iPhone. Although the iPhone could very well have won anyway, the rebates and discounts collected by the carriers distorted the markets and caused inefficiencies for all the tech players involved.

The BlackBerry movie perhaps unwittingly conveys an important dictum of the neo-Brandeisian school of anti-monopoly thought: that market competition is not just a natural phenomenon, but structured by laws and other policies.

It’s also funny.

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