Apple never really considered the Razr to be a competitor of iPhone, though. It's an entire product category that is (mostly) supplanting an older category. We're long past the point where any smartphone vendor spends any resources trying to convince people that smartphones are preferable to feature phones.

You might still call that competition, but it's not what I meant.

Much less so at that time. iPhone came out with a much better browser than BlackBerry, but in 2007 websites still often poorly displayed on all mobile devices. Sites started optimizing better for small screens after than point, and only then did it start to matter that BB had a browser written in Java that performed extremely poorly if you navigated to any site that used JavaScript.

And touchscreens are only really compelling for two use cases: games and browsing. There weren't many games on phones back then either. It made for a cooler UI but the keyboard was still more practical for most of what people did on smartphones in 2007 (i.e. texting, IM, email).

Look at RIM's revenue numbers from 2006 to 2010 if you don't believe that they were successful in the consumer market during that time period. By the end of 2006 they pretty much had dominated the entire enterprise market. Growth after that was almost entirely on the consumer side.

I've wondered about this part a little bit. Windows Mobile was a disaster in the market, and Microsoft stopped seriously investing in mobile phones until after the iPhone took off and they suddenly realized a huge missed opportunity. But if you go back 7-8 years ago, when there were lots of Palm and generic hardware phones running Windows Mobile, Microsoft boosters claimed that they would beat BlackBerry "because of the third party applications", which actually seemed somewhat plausible at the time. People were writing more Windows Mobile apps because they knew the Win32 API.

But it didn't pan out that way. RIM under-invested in building a 3rd party developer community -- which did exist, in spite of major frustrations with the platform -- for years. It didn't matter, and by the end of 2006 RIM was essentially the only player in the game. When the iPhone was released in 2007 it didn't even allow 3rd party applications. I speculate that RIM's historical success despite a weak app ecosystem caused them to downplay its significance, meaning when Android and iPhone put out good developer tools with rich, familiar APIs, with a large consumer market hungry for apps, RIM was flat-footed and struggled much too late to catch up.

The ability to run 3rd party native code was a huge sticking point between RIM and major game developers. BlackBerry wasn't architected for that, and the game companies insisted they needed it for performance fine tuning. RIM was working on building that capability, but shelved the effort when it became clear that they were moving to QNX in 2010 (because who would invest in creating titles for a proprietary operating system that was close to end of life?).

Unfortunately, QNX-based BlackBerry models are not yet to market, and history marches on...

This is pretty far off base. RIM was working hard to try to create a consumer smartphone market starting from around 2004. Their first attempt at a 'candy bar' form factor smartphone was crap (7100 series), but the Pearl (8100 series) released in mid-2006 was quite solid for the day and a good design for trying to wean people off of traditional 'feature' phones, which were cheaper but much less capable. The consumer market didn't really take off until the first iPhone was released in June 2007, and RIM's consumer offerings did crazy well at that point (mostly the Pearl and the Curve, which were much cheaper than the iPhone and were perfectly fine if you didn't care about the web browser or the touch screen). By 2010 more than 80% of RIM's sales were to end consumers rather than businesses.

RIM's real problem was that they were building on top of a proprietary operating system, originally designed to run nothing other than a JVM. This made it really hard to build it into a compelling platform for apps and games which have become vital for the smartphone category in the last 2-3 years. This is why they did a complete overhaul by deciding to switch to QNX, but apparently much too late and with poor execution.

Several years ago I first heard the argument that BlackBerry was getting its brand poisoned a bit because IT administrators were disabling most of the features that shipped on the phones (for security reasons, or whatever). So a large percentage of users didn't even know you could load third party apps or browse the web on it (though the web browser sucked until BB 6 shipped in 2010), and so the phones seemed much less compelling to get for personal use. Of course that's not the whole story of BlackBerry's decline, but it's an interesting point nonetheless.

That's a silly argument. Smartphones haven't really been competing against traditional cell phones since around 2005. You're argument (viz. people just need to talk on their phones, and smaller is better) could equally be applied to the entire smartphone category, which most certainly does not have "a long term problem".

In reality, RIM's business was soaring until about 2 years ago. That's when the real problem started to catch up with them: a vastly inferior 3rd party app ecosystem.