Is BlackBerry crumbling?

The outages that recently blighted BlackBerry services across EMEA have prompted many to speculate about the long-term damage this may have on a brand that many business users previously considered infallible.

Millions of EMEA-based BlackBerry users were unable to consistently access email, web and messaging services for several days earlier this month because of a core switch failure in one of its UK datacentres.

BlackBerry manufacturer Research In Motion (RIM) was widely pilloried on social networking sites for its handling of the situation.

Stephanie Watson, general manager of telecoms analyst MZA, said all this could not have come at a worse time for RIM, given the amount of market share it has lost in recent years.

"BlackBerry's reputation in the enterprise market has been built upon its secure, robust and reliable services and this sort of outage is bound to make companies nervous," said Watson.

"Many organisations are adopting the ‘bring-your-own-device' model, rather than dictating what mobile device workers should have. This is supporting the growth [in popularity] of Apple iOS and Android devices, which is increasing the pressure on RIM's market position."

Business continuity

Nessa Lynchehaun, channel director at unified email management vendor Mimecast, said the reliability and security of BlackBerry devices have previously been their main selling points.

So much so, that when her firm took the wraps off its business continuity service for BlackBerry users earlier this year, it was greeted with a degree of scepticism by customers and partners.

"When we would say to people, ‘what are you going to do if the RIM server goes down?' the response was usually ‘RIM doesn't go down'," explained Lynchehaun. "What all this has proved is that RIM's services are just as susceptible as anyone else's to downtime."

On the back of BlackBerry's problems, Lynchehaun claims that Mimecast has noted an increase in interest in its smartphone business continuity offerings, which it plans to capitalise on by recruiting more partners.

"We do not want it to sound as if we are profiteering on the back of someone else's misfortune, but we have had a lot of calls from people we already deal with who did not realise we supported BlackBerry devices," she explained.

However, Richard Holway, chairman of analyst TechMarketView, is not so sure, and claims firms are more likely to use BlackBerry's woes as a prompt to switch between smartphone makes than invest in business continuity.

"Both Apple and Android have security limitations, let us not forget, but lots of CIOs have bought them anyway," said Holway. "What firms such as Mimecast will need to do is prove to customers why it is better for them to stick with the devices they have and enhance them with their add-ons."

However, Tony Lock, programme director at analyst Freeform Dynamics (pictured left), said he doubts that spending a few days without email or internet access will result in many firms changing the way they do things.

"We are probably more likely to see defection [to other brands] on the consumer side or in small pockets within companies, because it is a lot easier for smaller groups to switch brands.

"Even so, doing something like this is a major business decision and investment, and such things do not tend to happen overnight or
because of a few days of disruption," concluded Lock.

BlackBerry: The "Filofax of the noughties"?

Doubts over whether Research in Motion (RIM) can survive as an independent company are also intensifying as the BlackBerry maker attempts to appease customers hit by the outage.

Even before a fault at its Slough datacentre sparked up to three days of disruption for BlackBerry customers, RIM was enduring something of an annus horribilis.

The Canadian firm's share price has plummeted by almost two thirds in 2011, BlackBerry shipments are beginning to fall for the first time and sales of its PlayBook tablet have trailed expectations - with shipments limping in at just 200,000 in its most recent quarter.

Holway argued the firm that has defined enterprise mobility over the past decade may soon be acquired or - worse - fade into obscurity.

"We now suspect that the days of RIM as an independent company are numbered," he said, picking out Microsoft as a possible acquirer.

"But maybe RIM will be the noughties equivalent of the Filofax. It will just fade into a distant memory of how things used to be."

RIM responded to the incident by offering its customers access to free premium apps worth up to $100 (£64). Enterprise customers are also being offered one month of free technical support.

RIM co-chief executive Mike Lazaridis said the firm is taking "immediate and aggressive steps" to prevent a repeat of the incident. "We have apologised to our customers and we will work tirelessly to restore their confidence," he said.

However, Holway said the problem with RIM's infrastructure may run deeper than a bad switch.

"There is a sense that BlackBerry has not invested in its infrastructure as much as it should have done and that it is using a system built to support seven million users, when there are more than 70 million BlackBerry users out there."

Kay Bruen, founder of channel consultancy Clipsham IT (pictured right), questioned whether some free technical support would be enough to placate customers.

"If I were a customer, I would want to know why all those fault-tolerant systems did not prevent this outage," she said. "Although the free support is a sweetener, this is not a price issue, it's about reliability and security. RIM needs to bring back confidence by explaining what it has done to prevent it from happening again."

RIM's rivals

Apple

Apple now tops the smartphone vendor rankings just four years after the release of its first ever phone, holding more than 19 per cent of the worldwide market. The recently released iPhone 4S was met with an unusually muted response from press and analysts, but that did not stop the customary fanboy hysteria and day-long queues outside Apple stores and four million devices were sold inside three days. Apple could dominate the mobile computing world for a long time to come.

Samsung

The Korean firm has shot up the rankings to become the world's second-largest smartphone maker, after very strong sales of its Galaxy S model. Between Q2 2010 and 2011, the vendor's smartphone sales increased almost fivefold, while its market share nigh on trebled to 16.2 per cent.

Nokia

If RIM gets the urge to feel sorry for itself, it can always look one place above it to its Finnish rival. Nokia remains the world's third-largest provider of smartphones, but the company has haemorrhaged sales and market share in the past couple of years. Just over a year ago it was 20 points ahead of its nearest challenger (then RIM) in the market. Both companies have a hard row to hoe in the coming years if they want to claw back market share.

HTC

Formerly an ODM phone maker for carriers, the Taiwanese outfit has quietly and diligently become one of market's leading brands. In the past year its market share has almost doubled and, in Q2, its 11 per cent share put it just half a point behind RIM. The vendor has released a succession of well-received models, including the Dream and the Spark. HTC is another firm on the up.