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Research In Motion ended up having a very bad week, thanks to a hardware issue that knocked out BlackBerry service for millions of customers around the world. Rival Apple, whose public profile is particularly high at the moment with the Oct. 14 launch of its new iPhone 4S, encountered some minor bumps when customers complained of issues when upgrading to the new iOS 5 operating system.
RIM finally managed to bring the global outages to its BlackBerry service under control by Oct. 13, four days after they began. That morning, RIM co-CEO Mike Lazaridis told media and analysts on a conference call that “immediate and aggressive steps” were being taken “to minimize the risk of this happening again.” Both Lazaridis and co-CEO Jim Balsillie insisted that RIM would work to regain customers’ trust following the incident.
That didn’t satisfy some analysts, who criticized RIM’s tactics in the midst of the crisis.
“The extent of the outage has been and continues to be shocking,” Stephen Mann, an analyst with Forrester, wrote in an Oct. 12 posting on his corporate blog. Moreover, he added, RIM’s communications with customers “have been lacking and one could argue that their tone has been terse-a far cry from customer-focused.”
As noted by many analysts and pundits over the past few days, the outages hit at a particularly auspicious moment for RIM, which is undergoing what its executives refer to as a “transition period.” Within the next few quarters, the company will release QNX-based “superphones” that will supposedly allow it to reclaim the competitive initiative from the likes of Apple’s iPhone and Google Android. In the interim, however, its finances are taking something of a beating: 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.
Moreover, RIM faces a significant challenge to its traditional power-base within the enterprise: driven by lower IT budgets and the increased popularity of smartphones like the iPhone, more CIOs and IT pros have initiated “bring-your-own-device” policies for workplaces. That has kicked off a flood of personal Android and iOS devices into the corporate IT infrastructure-and, according to one analyst, affected the tone of the BlackBerry outage.
“What’s interested to me is that there wasn’t a bigger outcry from IT managers,” Phillip Redman, an analyst with Gartner, wrote in an Oct. 13 posting on his corporate blog. “Many companies today have as many iPhones as they do BlackBerry devices. Fewer of their employees, and their businesses, were impacted by the outage.”
While he doesn’t believe that the outage “will lead to a faster move off of BlackBerry onto other platforms, it doesn’t build a stronger case to stay,” and that enterprises supporting “a diverse environment will be impacted less if one goes down.”
To be fair, though, even RIM’s competitors suffered a less-than-stellar week when it came to smartphone-related services: users trying to download the new version of Apple’s iTunes and the iOS 5 mobile operating system have reportedly strained that company’s servers, leading to error messages and irate users on Twitter and Apple support forums.