History of RIM:

RIM was founded in 1984 by Lazaridis, a University of Waterloo drop-out, and Doug
Fregin as an electronics and computer consulting company in Ontario, Canada. They did so
using their engineering knowledge and early lessons from life. Their startup funds: a loan from
Lazaridis’ parents and small government grant. Among the most memorable conversation
Lazaridis had was with his high-school electronics teacher, who told him in the 1970s not to get
too caught up in computers because it was the person who put wireless and computers
together that would come up with something special. That stayed with Lazaridis, and a decade
later he began to see what the teacher was talking about. 

By the early 1990s, the Ontario-based company had begun to develop technology that
allowed for better wireless-data communication. Then, in 1992, Jim Balsillie joined RIM as co-
CEO, investing $125,000 of his own money into the company by remortgaging his home.
Lazaridis recalls that “Back then I would sit there and say, ‘I understand the value of e-mail. I
know e-mail is the future because it makes me incredibly productive. When will everyone else
understand that?’ ” . One of RIM’s early projects included wireless point-of-sales terminals. This
led RIM to develop its own radio, which RIM then incorporated into a pager. A major
breakthrough occurred when the RIM team developed a way to respond to a page, effectively
allowing two way paging. Thus, RIM became an early player in the wireless data industry.

RIM was an active participant in the two-way pager market, providing two-way pagers
to BellSouth and Motient, the companies that owned the two U.S. data networks. RIM noted
the interest of some users in having their business e-mail forwarded to their pagers, and when
BellSouth decided not to go after the opportunity, RIM decided to pursue it. BlackBerry
emerged as RIM’s solution to the mobile e-mail opportunity. The BlackBerry Enterprise solution
was an enabling architecture that allowed a corporate user to access his corporate e-mail
account in Microsoft Exchange through a small BlackBerry handheld device. BlackBerry was
launched on January 19, 1999. The first model launched was the 950, followed in April 2000 by
the 957. The target market was US companies with a large number of mobile professionals.
Typical high potential targets in these companies were CEOs, chief information officers (CIOs)
and vice presidents of field sales, and customer support. For its initial enterprise sales, RIM sold
a complete bundled solution including handhelds, software and airtime, which RIM had bought
in bulk on the BellSouth network. The BlackBerry name was developed with the help of Lexicon
Branding, a California-based company that specialized in developing brand names. “BlackBerry”
also suggested something small that could be held in a person’s hand.

Blackberry’s Technology

The BlackBerry wireless platform and line of handhelds could integrate e-mail, phone, Instant
Messaging(IM), Short Message Service (SMS), internet, music, camera, video, radio, organizer,
Global Positioning System (GPS) and a variety of other applications in one wireless solution that
was dubbed “always on, always connected.” These features, especially the immediate pushed
message delivery, in addition to the BlackBerry’s small size, long battery life, and ease of use,
made the product extremely popular with busy executives who valued the safe and secure
delivery of corporate mail and seamless extension of other enterprise and internet services.

In particular, organizations that relied on sensitive information, such as the U.S. government
and large financial institutions, were early and loyal adopters of BlackBerry and RIM’s largest
customers. RIM’s enterprise e-mail servers, which were attached to the customer’s e-mail and
IM servers behind company firewalls, encrypted and redirected e-mail and other data before
forwarding the information to end consumers through wireless service providers (see Exhibit 3).
Having been the first to market with a “push” e-mail architecture and a value proposition built
on security, RIM had more than 100,000 enterprise customers and an estimated 42 per cent
market share of converged devices, and significantly higher market share of data-only devices,
in North America.

There are two key elements to the Blackberry Service, namely the Email and the Messenger.
The Email is Highly Encrypted while the Messenger is scrambled i.e. a lower degree of
encryption. To describe the process for Email exchange, let’s take an example of Company A
sending an email to Company B. The sender, in this case Company A, uses its Blackberry device
to send the email. The encryption of the email happens on the device and this is sent to the
cellular phone operator. This encrypted message is then forwarded to a RIM Router in Canada.
From here, the encrypted message gets sent back to a Blackberry Server on Company A’s
premises. Company A now decrypts it and sends the message to its own company mail server.
From here on, it works like a normal Internet service, sending the decrypted message to the
mail server of Company B over the internet. The Company B’s Blackberry server receives this
decrypted message, encrypts it and sends to back to the RIM Router in Canada. The Router
routes this encrypted message to the cellular phone operator which then sends it to the
receiver Blackberry device. This device decrypts the message on the phone.

In case of the Blackberry Messenger, the Blackberry device sends a scrambled message to the
cellular phone operator. This operator forwards the message to the RIM Router in Canada and
then to another cellular phone operator. All of this is in a scrambled format. This is finally
reaches the receiver Blackberry device where it is unscrambled. To unscramble, you need a PIN
number and a code for every Blackberry phone. (Exhibit )