Sleeper Apps Smuggled Past Carrier Gatekeepers

“RIM had an advantage that Nokia and other phone makers lacked: its own data network. BlackBerry messages traveled through RIM’s in-house network, which was plugged directly into the carriers. The unique connection gave RIM a back door to sneak in services carriers wouldn’t allow. In the mid-2000s RIM began shipping BlackBerrys secretly loaded with sleeper applications. Carriers and customers had no idea the applications existed until RIM sent an alert to BlackBerry users about a software upgrade. Hidden within the digital transmission was a file that unlocked the applications on the device—a Web browser and links to popular instant messaging services. Icons immediately popped onto BlackBerry home screens around the world. By the time carriers realized what was happening, millions of customers were using the Internet and exchanging instant messages on their BlackBerrys. Initially carriers were furious. Verizon threatened to pull BlackBerry from all retail channels. “I had to speak with probably twenty different carriers about this,” says Aaron Brown, then a director of services in RIM’s product management group. “But at that point, they realized the truth”: carriers were powerless to turn off the browsing or messaging services. Brown reminded his angry callers about the fine print in service contracts that gave RIM the right to change features and services on its phones “without permission or notice.” After a while carriers stopped complaining. Lucrative data traffic was becoming a multibillion-dollar business for the carriers thanks to the growing popularity of e-mails and instant messaging. “The key was stealthily leveraging and launching, then asking for forgiveness,” Balsillie says.”

“Balsillie recalls the ARDIS deal as the moment RIM put formidable U.S. carriers on notice that the Waterloo bantamweight could play just as rough as the big guys. Steering RIM, he says, meant being “massively scared shitless and fucking terrified” that carriers or competitors would one day toss the company over a cliff. After “trying to bob and weave” around bigger hitters for years, he saw a unique chance to grab the advantage when ARDIS came calling. He correctly gambled that BellSouth was in a corner because it had already signed its contract to buy the Leapfrog, a pager its network badly needed. Recalling the controversial transaction, Balsillie throws his hands in the air and breaks into a broad grin: “I played the leverage,” he laughs. “Welcome to business.””