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Dealers: BlackBerry will be affected by outages

Mobile News
October 20, 2011

Mobile phone dealers believe recent BlackBerry service outages will affect Canadian based RIM in the months ahead 

Dealers and analysts fear sales of BlackBerry devices could be hit following issues with its data services earlier this month.

BlackBerry customers across the EMEA region, India and the Americas were all hit by data issues which affected services such as their email, BlackBerry Messenger (BBM) and other BlackBerry applications.

The issues, which took a week in the UK to resolve, attracted damning news headline across the world and was also ridiculed on a number of television and radio programs such as the Jonathan Ross show.

A large number of people vented their frustrations online through chat forums threatening to switch manufacturers and complained about the lack of information being relayed from RIM regarding the problems and when they would be resolved.

RIM co-CEO Mike Lazaridis eventually issued a video apology via the RIM website and later during a live questions and answer session where he admitted BlackBerry had “not delivered on its goals” to provide reliable communication solutions.

Despite the problem being resolved by the end of Friday (October 14) dealers fear BlackBerry’s reputation is now being questioned and customers will now actively seek alternatives based on its negative publicity – with Apple being the biggest benefactor.

Southwick based dealer Focus Mobile head of mobile operations Keane Beaken who said BlackBerry accounts for 50 per cent of sales said: “Its absolutely unavoidable that there won’t be an element of people who are put of BlackBerry and it remains to be seen whether it is for the long term or en masse.

“The service issues are going to be a problem when we go to customers in the future and we are selling BlackBerry devices to them on the basis of its service strengths, we constantly talk about how robust and secure those services are.”

“What we are going to find now is people who come in looking for iPhones are not going to want to accept that and argue that the server and the services are not reliable and they are absolutely right to tell us that.”

The issues experienced by BlackBerry occurred during the same week its rival Apple released its iPhone 4S.

Cardiff based dealer The Word, says the contrast in press coverage between the two manufacturers could ultimately see customers switch towards Apple devices when upgrades and contract renewals are ready.

However its head of account management Mark Tuff, who claims 35 per cent of The Word’s business goes to BlackBerry claimed it is unlikely its long term future would be badly damaged.

Tuff said: “If any one was on the fence between buying a BlackBerry or an Apple device and are in the buying cycle over the next month, this will push them over the edge away from BlackBerry,”

“BlackBerry has been the singularly most robust system for email in the UK if not the world for 13 years and having one little blip in all that time is not a major issue.”


Industry analysts also issued warnings that BlackBerry’s server issues could cause longer problems for the manufacturer, which’s saw its profits for Q3 this year drop 59 per cent to $209.2 million.

Frost & Sullivan ICT practice analyst Craig Cartier said: “As Apple and Android smartphones continue to cut into RIM’s market share and enterprise players begin to see those manufacturers as viable alternatives, RIM can ill afford the questions to the company’s reliability the outage brings.”

Ovum analyst Nick Dillon added: “This is the first major disruption to the BlackBerry service since 2009, during which time the number of BlackBerry users has doubled.

“However, this period of sustained downtime will again call into question RIM’s reliance on its centralised network architecture. Despite the benefits the network brings in real-time delivery of email and data efficiency, it remains significant risk for the company.”


However, some dealers claim the recent set-backs will ultimately see BlackBerry forced to push its products harder to remove any stigma recently attached.

For Leicester based dealer Scancom, sales of BlackBerry handsets account for around 90 per cent if its business.

Its director Chen Kotecha defended the manufacturer claiming customers should take “comfort” in the recent issues as it will encourage RIM to put in place measures to prevent it happening again.

Kotecha said: “A lot of people look at what happened in a negative light and were quick off the mark to say they will be switching to Apple or Android. But the only reason the outages caused so much hype shows how important BlackBerry is to people,”

“If anything people should take comfort from what has happened. It’s a big learning curve for RIM and I am sure they will be adopting more resource to ensure it doesn’t happen again.

“We are going to push on stronger and harder than ever and BlackBerry is going to be affected in the most positive manner, because the bad always turns into good.”

Research In Motion (RIM) UK and Ireland managing director Stephen Bates gives his take on the BlackBerry service outages in the next issue of Mobile News, out on October 24.


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