BlackBerry's future prospects worry dealers, analysts after outage

The future of Research In Motion's BlackBerry products is being questioned by mobile phone dealers and analysts following the the company's recent service outage that affected EMEA subscribers the most.

RIM has made some attempt to heal the damage caused by the outage with the offer of free premium applciations to users and one month of free technical support to enetprise customers, and operators have responded by offering additional airtime. Still, mobile phone dealers are questioning the company's reputation given the widespread negative press and TV coverage the service outage attracted.

According to Mobile News, Focus Mobile, a London-based reseller with 50 per cent of sales attributed to BlackBerry, said: "It's absolutely unavoidable that there won't be an element of people who are put off BlackBerry and it remains to be seen whether it is for the long term or en masse."

Commenting on the BlackBerry service problems, which occurred during the same week that Apple's iPhone 4S was released, another dealer said it could see its customers switching towards Apple devices when upgrades and contract renewals become due.

"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," Mark Tuff from The Word, a Cardiff-based dealer, told Mobile News.

Telecoms analysts also warned that the BlackBerry server problems could damage the firm's longer-term prospects, which saw its profits for the third quarter of this year drop 59 per cent to $209 million. Ovum analyst Nick Dillon commented to Mobile News: "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," he added. "Despite the benefits the network brings in real-time delivery of email and data efficiency, it remains a significant risk for the company."

A survey conducted by UK-based YouGov after the service problems indicates that BlackBerry user confidence has been badly impacted, with nearly 50 per cent of all BlackBerry users saying they will select a different device when they change handsets.

According to the Daily Telegraph, Russell Feldman, the consultant that led the YouGov research, said: "While BlackBerry may have a loyal following, their handling of the blackout has severely undermined confidence amongst consumers and while they may be forgiving once, if it happens again the brand could find itself in serious trouble."

He added: "The emergence and popularity of Android devices is seriously starting to challenge BlackBerry's share of the market, and with the iPhone starting to focus in on the business market, BlackBerry could soon lose out."

For more:
- see this Mobile News article
- see this Daily Telegraph article
- see this YouGov report

Related Articles:
RIM considers compensating carriers in wake of BlackBerry outage
O2 UK shuns RIM's Playbook, blames poor customer experience
RIM boosted by unexpected hike in EMEA subscribers
Telecoms M&A speculation - the possible, and the downright crazy
BlackBerry to offer BBM Music service to UK Messenger users

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.