BlackBerry service blues to take toll on brand

Service glitches may dent consumer confidence as outages enter third day
BlackBerry service blues to take toll on brand
By Claire Ferris-Lay
Wed 12 Oct 2011 12:27 PM

in Motion (RIM), the Canadian maker of the BlackBerry smartphone, may face an
uphill struggle to regain consumer confidence as service disruptions enter a
third day.

Twitter users across the Middle East, Europe, Africa, India and
Latin America on Wednesday reported disruptions or complete outages of their
email and BlackBerry Messenger services.

“If it had been a brief problem that had been resolved then
perhaps people would see it as a one-off incident, however, I think it’s
getting a bit beyond that now because it has dragged on into the third day,”
telecoms analyst Matthew Reed at Dubai-based Informa told Arabian Business.

reaching a point where it could begin to damage the consumer sentiment [and]
the user perception of BlackBerry.”

RIM has blamed a core switch failure for causing a large
backlog of data and has said it is working to restore normal service.

Shares in the Canadian handset maker have
fallen 58 percent this year amid a declining market share and increased
competition from Apple’s
iPhone and handset makers that use Google’s Android operating system.

firm’s overall market share declined four percent to 12 percent in the second
quarter, according to research firm Gartner.

CEO Tim Cook, who last week unveiled the new iPhone 4S, said 93 percent of
Fortune 500 companies are currently testing its iPhone.

“The iPhone
is pummeling the competition,” he said during his introduction of the latest
handset. Apple has a five percent market share of the global handset market, he

RIM on
Monday said its business in the Middle East had grown 140 percent in the last
12 months and said it planned to expand its presence in Lebanon, Jordan and

“We have
grown 140 percent Gitex to Gitex in the Middle East. We are really dominant in
UAE, Saudi, Kuwait and Qatar and then we are expanding to Lebanon, Jordan – we
just launched our services in Iraq – Bahrain, Oman and then we are looking at
Pakistan,” Sandeep Saihgal, managing director for RIM Middle East, told Arabian

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“We are
one of the dominate players in the segment in the Middle East. The growth is
very high…there is investment in local actions [and] we are partnering with
local developers.”

RIM has
increased its business in Saudi Arabia 225 percent from August 2010 and August
2011, the firm said. In the UAE and Kuwait, business increased 63 percent and
56 percent respectively during the same period.

said the disruption in BlackBerry services across the Middle East would be
particularly damaging to the brand.

“It is
particularly unfortunate because RIM’s saving grace has been that, while it’s
facing more and more pressure in advance markets, it’s still been quite strong
in emerging markets including the Middle East,” he said. 

The BlackBerry device has been the subject of numerous
threatened suspensions across the world, as governments seek to access its
encrypted email and messaging devices.

The UAE last year threatened to suspend BlackBerry services,
after authorities said the encryption technology didn’t comply with national
security laws allowing access to data traffic.

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