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RIM's future strong despite outages and outraged users

RIM's future strong despite outages and outraged users

Some users angered by service outages but remain faithful

A data service outage affecting some BlackBerry users nationally this week seems to have left them angry but not deeply concerned about the future of BlackBerry's parent, Research in Motion Ltd.

"I don't see myself as losing faith in RIM, [but I'm] more disappointed and frustrated than anything," said Joe Sanders, a longtime BlackBerry user and moderator for who briefly lost service Tuesday and heard from others who were upset.

Sanders' sentiment, expressed via e-mail, was echoed by others who lost service for as long as 24 hours on U.S. carriers, an indication that the problem was due to either RIM's network service or its BlackBerry devices. RIM has not commented, but T-Mobile USA said the problem was fixed late Wednesday, and gave an explanation for what happened that Sanders and others said was nearly the opposite to what they detected.

"What bothers me is [RIM]'s not letting us know what is really wrong," wrote BlackBerry user John Maguire, a police officer based in New Jersey, in an e-mail. "After this last [outage], I'm losing faith very fast." Maguire said he lost service on his BlackBerry over the Verizon Wireless network earlier this week, meaning he didn't have access to e-mail while in his cruiser. "We use e-mail for all kinds of communication."

Teresa Boardman, a real estate agent for Saint Paul Home Realty in St. Paul, Minn., lost BlackBerry data service for 24 hours Monday to Tuesday and said she didn't lose business, but found the outage "made my life a living hell." Still, she didn't condemn RIM, and said she has used BlackBerry devices since 2003. "I can't think of any device that I own that I get such wonderful support for," she said. Her lingering worry is that "outages used to be few and far between."

However, Sanders and industry analysts said RIM's future is basically strong, despite this week's sporadic outage and even a more serious one last December .

The last year has seen more minor service outages with RIM than in years past, which is probably due to RIM's constant attempts to upgrade software and hardware, said Kevin Burden, an analyst at ABI Research.

"Outages do shake your confidence in what the backend RIM infrastructure can support, but BlackBerry users know that the best [wireless] experience still has the BlackBerry brand on it," Burden said in an interview. " I don't think outages shake user confidence too much, but the illusion is now gone that this is rock solid service."

Burden noted that network outages are not unique to RIM, and many outages are attributable to individual carriers. "I don't think the outages end up hurting RIM," he added.

RIM has been and will continue to be a wireless e-mail giant, especially with corporate users whose devices have been certified as data secure from their companies' IT shops. Part of that success is due to RIM's frequent updates to the BlackBerry Enterprise Server (BES), which had its version 5 update last year.

Sanders, who runs a printing business in Birmingham, Ala., uses a small business/consumer version of the BES, called the BlackBerry Internet Service, or BIS, which he said will get a 3.0 update later this month. "We don't have to wait annually for major upgrades of features," he noted, pointing out that BIS 2.8 was released last summer with support for Gmail among other features.

One big feature that Sanders and other users are waiting for is a BlackBerry browser upgrade expected later this year. The WebKit-based browser was unveiled in February at the Mobile World Congress, shown on a BlackBerry Bold 9700.

In addition to the browser, RIM has long been working on a wholesale operating system upgrade, but a delivery date is not known.

With all the strengths of its various components, RIM also has done well taking on the rival iPhone and Android phones. A majority of its sales in the past year were to consumers, Burden noted. RIM has produced the BlackBerry Storm and the Storm2 with a touch screen and features designed to lure consumers, and has devoted heavy attention to expensive television advertising.

The biggest threats to RIM do not come from network outages and annoyed users, but from Android phones and the iPhone, said Ken Dulaney, an analyst at Gartner Inc. Gartner last fall forecast that the RIM operating system would lose market share globally by the end of 2012, dropping from nearly 20% of sales of mobile devices with the RIM OS in 2009 to 14% in 2012.

Burden said doesn't think the RIM OS will do that poorly, however, and said he calculates the RIM OS had 18.8% market share in 2009, and will see a "slight decline" to 18.3% over the next two years, but will be at 18.5% in 2014.

RIM shipped about 23 million BlackBerry devices in 2008, 34 million in 2009 and will ship about 40.6 million in 2010, ABI research predicts.

RIM's future success, even with stiff competition from the iPhone and Android phones, is heavily based on future sales successes in Asian markets, especially the huge markets of China and India, Burden added. "You've got to remember that RIM is really just now getting into the Asian market," Burden said.

Chinese buyers "tend to like what Westerners have, and the BlackBerry so far has been one of those pieces of forbidden fruit with a good infrastructure behind it that is just now being dangled out there in front of the Chinese," Burden said. "China could be very significant for RIM."

IDC's forecast for RIM in North America is the most impressive of all, showing it will continue to lead all other OSes in every year through 2014, with Android-based phones coming in second. In 2014, IDC predicts 41.7 million BlackBerry devices will be shipped in North America, up from 23.5 million in 2009. Android will be second in 2014, at 38 million shipments, up from 5 million in 2009, IDC said.

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Tags IDCoutageRIM BlackBerry

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