RIM BlackBerry Outage Hits Users Around the World

Research In Motion's BlackBerry service outage is reportedly affecting users around the world, as the company wrestles with its own "transition period."

Research In Motion might end up having a very bad week.

Reports from around the world indicate the company's BlackBerry service is experiencing widespread interruptions. "Some users in Europe, the Middle East and Africa, India, Brazil, Chile, and Argentina are experiencing messaging and browsing delays," RIM said in a statement to The Wall Street Journal Oct. 11. "We are working to restore normal service as quickly as possible. We apologize for any inconvenience this has caused."

Meanwhile, Canadian merchant bank (and RIM shareholder) Jaguar Financial Corp. is making a well-publicized call for a RIM shakeup. "Everybody is in support of a sale of RIM or another value creative transaction," Jaguar CEO Vic Alboini told Reuters Oct. 11.

During its Sept. 15 earnings call, RIM reported revenues of $4.2 billion for the second quarter of fiscal 2012, a 15 percent decline from the $4.9 billion it earned during the previous quarter. The company shipped some 10.6 million BlackBerry smartphones and around 200,000 BlackBerry-branded PlayBook tablets during that period. RIM has acknowledged that demand has slowed for its older BlackBerry models, but has argued that new devices running BlackBerry 7 OS will hold the market-share line until the company can release its QNX-powered "superphones" sometime in the next few quarters.

RIM's executives, meanwhile, have been trying to sell media and analysts on the story of a company in transition, but with a clear road map to success. During that earnings call, RIM co-CEO Mike Lazaridis told listening media and analysts that sales of the PlayBook are "below where we'd like it to be" but that the tablet will "ultimately be successful in a market that's in its infancy." A major software update for the tablet, which will reportedly include native email, is due at an unspecified date after October's BlackBerry DevCon conference.

However, some analysts have taken a different perspective.

"Our checks indicate slowing sell-through of new OS 7 handsets, and we believe a new low-cost iPhone and low-end Android phones will pressure RIM in the mid-range and low-end, respectively," analyst Peter Misek wrote in a co-authored research note for Jefferies & Co.

RIM management "remains bullish on its prospects for the PlayBook and new BlackBerry 7 smartphones," wrote analysts T. Michael Walkley and Matthew Ramsay in a Sept. 16 research note for Canaccord Genuity, but "we maintain our more cautious view as we believe RIM is underestimating the increasingly competitive smartphone environment."

The question is how these newest RIM outages will affect public perception of the company.

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