BlackBerry Loyalists Rewarded with Outage

Research In Motion confirmed on Friday that it had restored service to millions of Blackberry users. During the three-hour service outage, the company said in a statement, “Some users in Europe, the Middle East and Africa are experiencing issues with their BlackBerry service... All relevant support teams are working to resolve the issue. We apologize to any customers who may be affected.” Despite this, RIM did not offer an explanation for the outage.

This outage echoes the similar occurrence last October when RIM's entire Blackberry service crashed for several days, and made difficult the smartphone maker's struggling turnaround plans. Following the 2011 crash, RIM took measures to improve its network infrastructure.

Shares of Waterloo, Ontario-based RIM threatened to fall below their lowest point since 2003 by dropping more than 6 percent. A wireless analyst at CCS Insight, John Jackson, commented, “That RIM has experienced another outage is worrisome - something hasn't been put right.” Indeed, that this occurred on the same day that Apple launched its new iPhone, the problem has caused considerable embarrassment for RIM.

Thorsten Heins, RIM's chief executive, issues an apology to those Blackberry users who were affected by the outage – he stated that 5 million users, around 6 percent of its customer base, may have experienced email delays of as long as three hours. In the emailed statement, Heins said, “We are conducting a full technical analysis of this quality of service issue and will report as soon as it concludes... I again want to apologize to those customers who were impacted today.”

Although RIM has made similar promises to provide a clear explanation of the causes of last year's crash, it still has yet to provide the details. The Blackberry once dominated the corporate market because RIM was believed to be excellent at protecting enterprise data and prevent the theft of corporate secrets, but RIM has continued to suffer numerous failures to its delivery system in the last year.

RIM has more than 78 million subscribers, and has watched its customer base grow rather slowly due to the increase in popularity of the iPhone and devices that run on Google's Android operating system. Parallel to the fall of RIM's share price, Blackberry's market share has also dwindled.

As RIM prepares to launch a next-generation Blackberry line-up, this outage is most certainly ill-timed. Furthermore Blackberry's new line-up has been delayed twice, and is now due for release early next year. Francisco Jeronimo, an IDC analyst said, “This outage could not happen at a worst quarter... when all devices are coming out and the Christmas season is approaching. They are close to their last chance, if they miss it, they will not recover.”

RIM's outages highlight a particularly vulnerable point: Blackberry's messages are more secure because they are routed through its own data centers (unlike Apple), but this also means that there is a single point for potential failure.

RIM's BlackBerry 10 line will not be so dependent on RIM's proprietary network. James Cordwell, an analyst at Atlantic Equities states, “The problem is it needs to offer something a step-change better and that's becoming quite difficult in the smartphone market.” (CY) Link