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    Default Inside RIM: An exclusive look at the rise and fall of the company...

    Inside RIM: An exclusive look at the rise and fall of the company that made smartphones smart

    Pretty interesting read about RIMs missteps, but was this the big story that BGR was talking about?
  2. Fr3lncr's Avatar
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    Crap title to grab readership. It hasn't 'fallen'. (Maybe it will one day but that day hasn't happened yet). It's like publishing an obituary before the person has died because you've already written it up.
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    Another great article by BGR. Good job.
  4. ZMc1834's Avatar
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    Here is the text so BGR doesn't get any more hits for this story, so called big news.

    Inside RIM: An exclusive look at the rise and fall of the company that made smartphones smart
    By: Jonathan S. Geller | Jul 13th, 2011 at 11:59AM

    Research In Motion is in the midst of a major transition in every sense of the word. Publicly, the company is portraying a very defensive image — one that is very dismissive, as if RIM is profitable and class-leading, and the media is out of line to criticize its business, as are investors. Internally, however, there’s a different story to be told. It’s a story filled with attitude, cockiness, heated arguments among the executive team and Co-CEOs, and paranoia. We’ve spoken to multiple ex-RIM executives at length about their experiences with the company over the past few years. While most speak highly of RIM and their time in Waterloo, they also each left the company due mainly to RIM’s lack of vision and leadership. Read on for an exclusive inside look at a company teetering on the edge between greatness and collapse.

    “Lightning in a bottle.” That is how one former executive described Research In Motion in its early days. “This came together at the right time, the right place, with the right technology, and Jim and Mike are extremely brilliant individuals.” Jim Balsillie and Mike Lazaridis are two irreplaceable leaders who were largely responsible for RIM’s success, our source continued. But as time progressed, Mike did not listen to the marketplace. This is obvious from the outside view, though the details surrounding why RIM is no longer a market leader — and why RIM will most likely not be able to regain its leadership position in the near future — are most interesting.

    Let’s rewind a few years. Picture yourself sitting in an executive briefing at Research In Motion. You’d hear Mike Lazaridis unequivocally state time and time again that BlackBerry smartphones would never have MP3 players or cameras in them because it just does not make sense when the company’s primary customers were the government and enterprise. “BlackBerry smartphones will never have cameras because the No. 1 customer of ours is the U.S. government,” Mike Lazaridis would say in meetings. “There will never be a BlackBerry with an MP3 player or camera.”

    The fact is, that RIM didn’t only miss the boat in terms of product features and device trends as we now know, but the underpinnings of the company’s consumer failure began all the way back in 2005 with bold statements like these, combined with a lack of research and development in numerous key areas.

    Mike Lazaridis would say that the most ridiculous idea was to name a phone with a marketing-derived name, like the Motorola RAZR. “BlackBerry will never do that, it will always be a model number,” he said to executives. “A BlackBerry with a name is ridiculous.”

    “Here we are, as young, brazen people, and we’re just like, ‘Mike, you’re missing out. There’s a trend here; it’s a social and collaborative scene in certain media circles’,” one former executive said, describing the general feeling among other executives at the company. “Now look at what’s happened 4 or 5 years later — an MP3 player, camera, name, all done reluctantly.”

    “When I would work with our major carriers, I would have to go to Mike’s product development team, and ask what are we going to bring to [redacted],” and it was never a cutting edge product, one former executive told me. There wasn’t ever a three-year roadmap. Mike was always focused on small, granular features like how to make the speakerphone in a BlackBerry the best speakerphone on the market. Mike would say that people were going to buy a BlackBerry because of the speakerphone… “because they wouldn’t need a Polycom anymore.”

    The three-year roadmap for RIM products focused on refining the technology in phones had already been released, rather than looking at where to add major new componentry or trying to identify or even shape future trends. “One of the main reasons RIM missed the mark with the browser was because
    they were always proud of how little data usage a user would use,” a former executive said. “There was no three-year plan at RIM.” RIM would be proud of the fact that someone would only use 1MB of data in a month in 2005, and as a result, there wasn’t ever any extensive R&D done within the browser space. Over time, that misstep affected BlackBerry tremendously as competing devices began to deliver desktop-like Web experiences. “Mike Lazaridis couldn’t imagine that consumers would be spending hours watching and streaming video to their devices, he couldn’t understand it,” the former exec continued. This is why we don’t see RIM excelling in spaces like camera technology, or displays — because the company never even attempted to anticipate the smartphone trends we’re seeing today. “RIM is a reactionary company.”

    I remember going to sit with the CMO of one of the largest wireless carriers, and we would deliver features like “increase battery life by 40%” in the next model, and we would get a blank look on the other side of the conference room. The executives would think, ‘so your telling me with this device I am going to sell 40% less car chargers’, there was a blank stare. “They want the flavor of the week, and the carrier’s loyalty is to their customers and what their customers want. Then try and delivery that.”

    “Mike is really brilliant, and superior beyond his years, and what he’s doing with Steven Hawking and the Perimeter Institute for Theoretical Physics is compelling,” he continued. “There are hundreds of millions he’s put into it, but that doesn’t have anything to do with what RIM’s facing, and what’s in front of them, and the market is asking for them to change their ways.”

    “Back a handful of years ago, if someone had a phone at work that wasn’t a BlackBerry they paid for it,” another executive who no longer works at Research In Motion said. “I was at a Fortune 500 organization a few weeks ago, and people were carrying a corporate issued BlackBerry in their left pocket and their own personal iPhone in the right pocket.” He continued, “The fact that people are spending their own money to buy the iPhone, when their company is giving them a ‘free BlackBerry’ sends quite a message to RIM,” says one of our sources.”

    They were both stunned that someone could have a corporate-issued phone that could handle some consumer needs, but still walk around with two devices. There were and are many paradigms at RIM. In the corporate world, especially at large companies, the senior executives would buy a BlackBerry as soon as it came out. They would then give their old devices to employees beneath them, and these BlackBerry phones would eventually make their way down through the corporation. This isn’t the case anymore, and now those people that used to receive the hand-me-down BlackBerry devices are asking for shiny new phones.

    Jim and Mike got along very well, I was told by multiple current and former RIM employees. The interesting thing, however, is that when they have disagreements, Mike wins all of the internal arguments. “Jim, given his background, doesn’t have the pedigree to compete with Mike on an academic level.” As a result, perhaps, I was told that things have slowly deteriorated between the two co-CEOs. Jim and Mike have “titanic” arguments in the halls of RIM headquarters on various subjects, and we’re told it’s quite open. Stories of explosive fights bleeding out into the hallways and even lunch spots in Waterloo have filled Research In Motion. It used to be that only vice presidents or above would get the privilege of listening to Mike and Jim debate — behind closed doors or in the boardroom. Regular employees now hear the arguments as well, and “they aren’t insulated for that. It’s unnerving. It makes for a nervous environment, and many employees are looking to jump ship. Most people are just uncertain as to what the future holds [for RIM].”

    “When you hear Mike talk about the latest and greatest, it’s been the same thing for ten years: security, battery performance, and network performance. RIM has positioned battery life and network performance for years. People are not concerned with iPhone battery life,” one source told me. Network performance, to Mike, trumps any innovation a device like the iPhone offers. “Mike is convinced people won’t buy an iPhone because battery life isn’t as good as a BlackBerry,” a different source said. Mike apparently is in disbelief that people can use over 15GB of data on their iPhone and Android devices, and he feels that people will buy smartphones based on network efficiency, even though carriers with tiered data plans in developed markets love customers who use monstrous amounts of data.

    While RIM has always viewed carriers as customers rather than end users, carriers have long been trying to find a different partner that doesn’t charge network fees. Since all BlackBerry devices use the BlackBerry NOC, RIM gets a piece of the data plan users pay on their bills each month. And RIM is the only manufacturer whose products are configured in such a way. “Carriers have always tried to negotiate the fees they pay RIM. They try everything to get that dropped or lowered, but that has been the one holy grail of RIM that has not been touched. ”

    An ex-executive who had been responsible for a number of carrier partners for RIM recently told me that the data network fees paid to RIM were definitely the number one cause of heartburn from carriers, and a big point of contention.

    If you look at RIM’s global revenue today, the story it paints isn’t a good one as far as driving new business and revenue channels. “They essentially just channel stuff,” a former exec said. For instance, when RIM wants to sell to a new market, it will go to two or three primary carriers and make those carriers purchase a set amount of devices up front to stock the channel for what is typically the remainder of the calendar year. Then RIM will sell those devices at full margin. It’s a great quick and easy profit from the channel. So RIM has now opened up three new carriers in a new country, let’s say, and it had them each purchase “X” thousand units each. Now, RIM can report to the Street that it shipped 700,000 devices at full market value.

    After multiple sequential quarters of opening up new countries, there’s obviously a lot of volume there. Though the consensus of many is that RIM is nearing capacity with this strategy. The company now has to rely on the old school model of growth within these existing channels, and just as we’re seeing in North America with the tide changing now that long-standing BlackBerry customers are moving to other platforms and devices, that will happen in countries outside of the U.S. and Canada that have been stuffed with BlackBerry phones. Growth will slow to a stall in these markets, one source told me, and the problems will be compounded by the fact that a lot of these devices are not being sold through to end users. “They’re selling a screen with a giant calculator attached to it. It’s not a cool device anymore.”

    As far as the PlayBook is concerned, RIM’s initial 500,000 shipments weren’t even sold at full margin. “RIM’s thought process was that they hoped if they put a product in a carrier’s hands that was less than full margin, it would entice the carriers to apply whatever number of discounts against that to bring it to market at an even lower price — a subsidy on the tablet. RIM isn’t making any money on the PlayBook.” To complicate matters, however, Jim Balsillie told the carriers at the 11th hour that the PlayBook wouldn’t have native email and would require the Bridge app in order to receive emails and provide calendar functions. “RIM is notorious for dropping these bombshells at the 11th hour on the carriers, and the PlayBook not having native email was a shock to the carriers.” They were all expecting a BlackBerry with a bigger screen. RIM was hoping to blow through the 500,000 units and have carriers take orders for millions of additional PlayBooks, but that has not happened yet. Mike Lazaridis looks at it as, why aren’t people buying this tablet when it has the most powerful engine with respect to multitasking, and supports Flash? But consumers have spoken pretty loudly a number of times, and Mike unfortunately leads the product side and continues to miss the mark with the masses, a former RIM executive told me. “I don’t even see anyone in Waterloo walking around with a PlayBook that doesn’t work for RIM,” another former RIM employee said.

    “People really think Mike has lost his touch and vision. He’s paranoid. It’s not uncommon to see him walking around campus with bodyguards in tow,” one source told me. “This is a small community of folks in Waterloo. There’s what? 100,000 people and 30,000 of them are students, and it’s an understated place. Sure there are millionaires but no one drives anything fancier than a 5-series BMW. For Mike to be on campus with bodyguards is very peculiar. It’s very Orson Wells-like.” Another former employee I spoke with doesn’t find the fact that Lazaridis has bodyguards to be odd at all due to his stature. RIM’s other Co-CEO, however, is a completely different person.

    “Every year, Jim Balsillie and COO Dennis Kavelman would take all the executives to Redtail golf course for a day of R&R with great meals, great VIP service, and every year one executive would not ever go.” Mike could not understand why everyone would go and have a golf day. In fact, he supposedly hated it and he never showed up on purpose, I was told.

    “Jim chasing the NHL teams, that caused some separation between Mike and Jim,” one former executive stated. When Jim was in the midst of buying an NHL team, the NHL hired a large group to work on the project, and it had countless former RIM executives called for testimony on what Jim Balsillie was really like — all of the “TMZ dirt,” as one source described it. One executive BGR spoke to refused to talk to the NHL when they reached out, however many others were happy to open up. While this former exec did not have an issue with Jim, it was hypothesized that those with an axe to grind lobbed some dirt at the NHL and it’s most likely one of the reasons they didn’t allow him to proceed with a purchase.

    Multiple former executives also spoke of a notable divide between Mike, an internal product guy, and Jim, who focuses more on external partner relationships, in how they each react to leaks from inside the company. “I remember this one time when we had a new device coming out and it leaked to BGR.” Mike lost his mind for a few weeks. He couldn’t fathom how something like this would happen, and he constantly threatened to fire any employees who leaked any information. “He had this ‘you’re either with us or against us’ attitude, and he went off the rails. Every product is Mike’s baby”. On the other hand, Jim would try and spin things, I was told. He would get everyone excited, “you know, here it comes, he’d roll with it and have the attitude that they’re boosting the hype of the device, they’re pre-selling it for us, and so on. That was the message Jim would take.”

    RIM seems to be doing damage control in a bunch of areas right now. One such area is the PlayBook and trying to mitigate the negative response to that product, and I was told the company is even going so far as to selectively block different media and even social networking sites from being accessed by employees. One of my sources said he anticipates RIM always having a niche market in the enterprise and government spaces, but he doesn’t think RIM has the potential to become a true market leader with consumers due to several shortfalls. “You’d honestly think RIM is more than a year or two behind in [the consumer market],” one source told me. “There will most likely be another heavy reduction in the workplace later this year or early next year. I don’t see the stock getting back to where it was. There are no real market impact executives coming into RIM, times have changed since Robin came in from Motorola, that ‘stock’ incentive isn’t there any more.”
    Last edited by ZMc1834; 07-13-2011 at 12:32 PM.
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  5. ADGrant's Avatar
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    I think it is a well written article. Some points really stand out such as:

    I remember going to sit with the CMO of one of the largest wireless carriers, and we would deliver features like “increase battery life by 40%” in the next model, and we would get a blank look on the other side of the conference room. The executives would think, ‘so your telling me with this device I am going to sell 40% less car chargers’, there was a blank stare. “They want the flavor of the week, and the carrier’s loyalty is to their customers and what their customers want. Then try and delivery that.”

    However there are very valid reasons why someone with a corporate BB may carry another smartphone. The corporate device can have all the consumer features disabled by BES and may also have the abiility to access personal email accounts disabled.
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    *This* is the "crazy big news story" ????

    RIM has internal management issues? Holy smokes! Stop the presses!!!!
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    I though it was very interesting....

    I DO own 400 shares of RIM.

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    I laugh at you so called fanboys in regards to BGR... Seriously Blackberry lost it's space in the consumer market 2 years ago. Every product released in the last 3 years has yet to compete with Android or iOS, and now even WM7. Consumers are voting with their wallets and right now the majority is saying Blackberry devices don't suit their needs. If you don't like the news feel free to be a sheep of the once so great RIM until it's doors close or it's bought out. No need to slam the site for making false claims when their industry contacts paint a better picture at the workings of RIM than you'll ever realize, unless of course you currently do work for RIM.
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    The Rise to and fall from dominance would be a more accurate title

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    Quote Originally Posted by deRusett View Post
    The Rise to and fall from dominance would be a more accurate title
    Accuracy doesn't generate pageviews.
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    I don't have anything really against the article, but don't market it as "huge news." There has been story after story regarding almost every point in the article. The only thing new is the anonymous quotes.
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    I'm starting to wonder why BGR has such a seemingly personal beef with RIM. Did they kill a family member of his or something? He just seems so determined to keep RIM in a bad light. It's so obvious at this point, there has to be some personal grievance there. I just wish I knew what it was. Anyway, back to enjoying my Playbook...
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    Quote Originally Posted by calaviqpfza4 View Post
    Another great article by BGR. Good job.
    Huh????

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    Quote Originally Posted by Jake2826 View Post
    I'm starting to wonder why BGR has such a seemingly personal beef with RIM. Did they kill a family member of his or something? He just seems so determined to keep RIM in a bad light. It's so obvious at this point, there has to be some personal grievance there. I just wish I knew what it was. Anyway, back to enjoying my Playbook...
    Ask Katie she knows....

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    I thought this was a great look at RIM, and probably as good of one as we are gonna get. Talking to ex-executives is about as close as we can get to knowing what really goes on there.

    This story painted a much better picture of how RIM got itself into this mess, and I can't help but put a lot of the blame on Mike. I still can't believe he thought there would never be an MP3 player or camera on a phone. Also, that blackberry would never name their phones. Oh well.

    It seems like the leadership of Mike, or lack there of, has caused the most damage to this company. Some genuises are so smart that they can't get a grip on reality. For Mike, it seems like he's so obsessed with certain aspects of a phone that it doesnt matter what market its geared to. It really is a shame, but they followed Mike to the top, and now unfortunately, the bottom.
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    I finished reading this and thought..if this is all the dirty laundry they can hang, I don't know where the big story is. It does provide some small insights in certain situations, but all in all it read like a "here's everything I can get and publish".

    It reinforces Mike's attention to detail and that somebody with consumer vision needs to keep him moving with projects he may or may not back. What it does make me feel is Jim likely has an in with corporate and business circles however neither is truly looking for the masses.

    On principle, I think RIM is looking out for the interests of the customer but the problem is there are two major types of smartphone consumers. Those that want productive, efficient, lean machines and those that want to consume. Sadly longer battery, less data usage, "free internet bridging" carry less weight than YouTube, Angry Birds and iAnything. Is it a surprise that people are bringing apps and games with them to work? They're the ones making the final decision, not the IT guys who manage the tech.
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    Quote Originally Posted by dcsr23 View Post
    I laugh at you so called fanboys in regards to BGR... Seriously Blackberry lost it's space in the consumer market 2 years ago. Every product released in the last 3 years has yet to compete with Android or iOS, and now even WM7. Consumers are voting with their wallets and right now the majority is saying Blackberry devices don't suit their needs. If you don't like the news feel free to be a sheep of the once so great RIM until it's doors close or it's bought out. No need to slam the site for making false claims when their industry contacts paint a better picture at the workings of RIM than you'll ever realize, unless of course you currently do work for RIM.
    This is me. I'm going with the sheep. One of the few stocks I am still holding based on past performance.

    I'm still waiting for other phones to offer the ease of use of a Blackberry as a business device. (IMO).

    BTW RIM isn't dead, they are very much alive and I suspect their phones will have a real wow factor once they start to release the new crop.
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    Quote Originally Posted by Fr3lncr View Post
    Crap title to grab readership. It hasn't 'fallen'. (Maybe it will one day but that day hasn't happened yet). It's like publishing an obituary before the person has died because you've already written it up.
    Really? What would you call it?

    Quote Originally Posted by calaviqpfza4 View Post
    Another great article by BGR. Good job.
    Agreed.

    Quote Originally Posted by JohnEnglish View Post
    *This* is the "crazy big news story" ????

    RIM has internal management issues? Holy smokes! Stop the presses!!!!
    Agreed to a point. Some of this was known already, however it gives great insight into the mindset of the products & features, or lack thereof regarding RIM products.

    Quote Originally Posted by dcsr23 View Post
    I laugh at you so called fanboys in regards to BGR... Seriously Blackberry lost it's space in the consumer market 2 years ago. Every product released in the last 3 years has yet to compete with Android or iOS, and now even WM7. Consumers are voting with their wallets and right now the majority is saying Blackberry devices don't suit their needs. If you don't like the news feel free to be a sheep of the once so great RIM until it's doors close or it's bought out. No need to slam the site for making false claims when their industry contacts paint a better picture at the workings of RIM than you'll ever realize, unless of course you currently do work for RIM.
    110% agreed.

    Quote Originally Posted by JohnEnglish View Post
    Accuracy doesn't generate pageviews.
    While you may want to argue about it's accuracy or not, there is a better argument for it's accuracy than it being completely false.

    Quote Originally Posted by Jake2826 View Post
    I'm starting to wonder why BGR has such a seemingly personal beef with RIM. Did they kill a family member of his or something? He just seems so determined to keep RIM in a bad light. It's so obvious at this point, there has to be some personal grievance there. I just wish I knew what it was. Anyway, back to enjoying my Playbook...
    He's reporting the news. There is no personal vendetta and why you and others swear BGR is biased and he's always hating on RIM is beyond me. The fact is when Apple released the first iPhone, RIM laughed at them. They weren't concerned in the least. "Nobody will ever buy an iPhone". Now look what's happened. The article was spot on when M was quoted about cameras & mp3's. It goes to show that the company has rested on it's laurels for far too long and has not had the foresight & market anticipation that now has them in the predicament they're currently in.
    This isn't slander. It's not all lies. It's not negative beyond the fact it's actually true. I'm sorry you don't want or care to believe it, but it doesn't make it not true.
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    We can all hate bgr and its "sources" but a lot of the points brought up in this post are valid.

    You can be the biggest fan boy of RIM but you have to admit that average consumer doesn't give a isht about security or battery life or push email.

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    I find the arguments between Jim and Mike to be most interesting. Jim always loses to Mike because of his academic level. Sounds to me like Jim needs to grow some balls and fight harder for what he wants. Kinda like he needs to grow some balls and not deny the comments about the PBs native email.

    I wonder if Jim did put up a good fight and Mike just comes back with "that's not fair".
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    its so funny seeing the fanboys just attack BGR instead of any of the points made in the article
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    Quote Originally Posted by bigtime2 View Post
    We can all hate bgr and its "sources" but a lot of the points brought up in this post are valid.

    You can be the biggest fan boy of RIM but you have to admit that average consumer doesn't give a isht about security or battery life or push email.

    Posted from my CrackBerry at wapforums.crackberry.com
    Some people here especially the one who own RIM stock can take the truth or bad news about RIM. It was a good article and IMO many valid points were made.

    When it comes to bad news about RIM people like to shoot the messenger (BGR).
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    For instance, when RIM wants to sell to a new market, it will go to two or three primary carriers and make those carriers purchase a set amount of devices up front to stock the channel for what is typically the remainder of the calendar year. Then RIM will sell those devices at full margin. It’s a great quick and easy profit from the channel. So RIM has now opened up three new carriers in a new country, let’s say, and it had them each purchase “X” thousand units each. Now, RIM can report to the Street that it shipped 700,000 devices at full market value
    This article also explains the international growth. Great read and good look at the company.
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    Quote Originally Posted by BaconMunch View Post
    I finished reading this and thought..if this is all the dirty laundry they can hang, I don't know where the big story is. It does provide some small insights in certain situations, but all in all it read like a "here's everything I can get and publish".
    This is where we disagree. It's not about dirty laundry. It's not about having the absolute biggest story. It's about why the former leader of the Worldwide Smartphone sales & user base have fallen way behind it's rivals. It helps you to understand the thinking and mindset inside the walls of Waterloo that's gotten them to said point.
    You only have to read the story & remember that RIM was intending on shipping the 99xx with the same lame sub-standard processors & other hardware that's been used in previous models. It's incredulous. The delay was finally seeing the writing on the wall and saying wait we can't ship out 2008 hardware in 2011. That's why there's such a delay, but you knew this already. Point is it gives insight into the mind of the person/s behind this.
    It can't be alright for us(CrackBerry) to rally behind RIM and have numerous blog posts(RIMpire, etc) talking of how it's all going to get better, yet when other publications which have no product affiliation, put out their own stories detailing how we got here, we then call them haters for doing so. There's always two sides of the coin and BGR isn't wrong for showing people it. It's not as if there has been any good info to report on the status RIM anyway. But we can't just hate a site because we're loyal to someone of which they write objectively about.
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  25. ZMc1834's Avatar
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    Some individuals, sometimes myself as well, will support something whether it be a company, a team or just a cause no matter what and will defend them till the end. We more than likely know there is truth behind the reports, but it is our passion and support that lead us to the defense. While defending them, we more than likely are saying to ourselves that the points are valid and we have more than likely thought them to ourselves. This article makes valid points and good background to reasons for RIM's lack of vision. I just don't see this as news, IMHO. News to me, in regards to a company, would be the release of a product, delay of a product, dates regarding products, layoffs, CEO's leaving or changing, etc. This article just seemed like more of a confirmation rather than actual "big news."
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