WSJ reported on how the iPhone crippled BlackBerry.

If the iPhone gained traction, RIM’s senior executives believed, it would be with consumers who cared more about YouTube and other Internet escapes than efficiency and security. RIM’s core business customers valued BlackBerry’s secure and efficient communication systems. Offering mobile access to broader Internet content, says Mr. Conlee, “was not a space where we parked our business.”

The iPhone’s popularity with consumers was illogical to rivals such as RIM, Nokia Corp. and Motorola Inc. The phone’s battery lasted less than eight hours, it operated on an older, slower second-generation network, and, as Mr. Lazaridis predicted, music, video and other downloads strained AT&T’s network. RIM now faced an adversary it didn’t understand.

“By all rights the product should have failed, but it did not,” said David Yach, RIM’s chief technology officer. To Mr. Yach and other senior RIM executives, Apple changed the competitive landscape by shifting the raison d’être of smartphones from something that was functional to a product that was beautiful.

“I learned that beauty matters….RIM was caught incredulous that people wanted to buy this thing,” Mr. Yach says.

Many companies do not realise that consumers care about the aesthetics of a product. If you show that you care about what you make for your consumers, your customers will care about what you make.