Ripe Pickings In Blackberry Season
By Jim Balsillie; Julie Schlosser REPORTER ASSOCIATE Oliver Ryan

(FORTUNE Magazine) – You can thank Research in Motion and its highly addictive BlackBerry for the fact that office e-mail can now find 1.3 million users pretty much anywhere. Co-CEO Jim Balsillie has run the 20-year old Ontario company for 12 years, and recently announced better-than-expected earnings, thanks to sales that surged 158% last quarter. FORTUNE's Julie Schlosser caught up with Balsillie recently to talk about former rival Palm, Silicon Valley North, and "CrackBerry" addictions.

Your stock was hit hard during the downturn, but since late 2002 you've been on a tear. What's going on?

Back in 2000 the wireless data networks weren't ready. And our products weren't ready for them either. It wasn't that people didn't want to buy BlackBerries, it was that when they bought them, they didn't work very well. When we got to early 2003, they started to say, "This is working well now."

You and Palm were bitter rivals. How come you're now working together?

I think it was a function of a shift in strategy. They moved out of the application space, which is a hard business. And we definitely had a strategy of wanting to work with all the handset vendors. They maybe changed their strategy. We changed ours. They have a really powerful new management team. If we cooperate to solve corporate problems and carrier problems, there's a lot more success before us.

How do you see BlackBerries changing in the next five years?

What you are seeing is that there are a whole lot of companies doing a broad array of phone strategies--smart phones, PDA phones, camera phones--big, small, Bluetooth, Wi-Fi, multibands. There is an almost infinite portfolio of device-packaging possibilities, and we are going to stick to our knitting--a thumb-based voice data terminal. But we are going to really make sure that the middleware connects to all the different networks, e-mail environments, and countries.

You are headquartered in Waterloo, Ontario. Does the region deserve its reputation as Silicon Valley North?

Yeah. It is a bit of a technology hub, but I don't call it Silicon Valley North. We are really true to our own culture and values. It's a low-key and high-quality-of-life environment. Our turnover is very, very low. It's between 1% and 2%. Our quality of employees is to the moon. We are somewhere between Silicon Valley and Utah.

Have you seen any less of a focus on trying to please Wall Street every quarter?

It just never has been the way we run the business. We have one policy at RIM: If I catch you checking the stock or talking about the stock price, you have to buy the whole company doughnuts.

Have you enforced it yet?

Twice. I've caught two employees, and it cost them about $1,000 in doughnuts. One was very senior and one was medium level. I don't think they've talked about the stock again.

What BlackBerry do you use?

I change them up. Picture me -- I work for a candy bar company and I can have whatever type of candy bar I want. I frequently use one of the advanced 7280s GSM versions, but I've just fallen in love with the Nextel's 'push to talk.' I love the globalness of the GSM 7280.

How many messages do you send and receive a day?

Just a couple hundred. I am not one of those heavy, crazy types.

Didn't people start referring to your devices as CrackBerries because they were so addictive?

I refuse to comment on the grounds that I might incriminate myself.

Okay, so if you had to give up your BlackBerry or your car, which would it be?

I don't mind walking an hour to work.