Will Microsoft Feast On RIM’s BlackBerry Crumble?

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If RIM can’t rebuild its reputation for reliability, then it could be overtaken by Microsoft’s Windows Phone, says Nicholas Kolakowski

RIM’s current spate of BlackBerry service outages, should they persist, have the potential to weaken the company’s standing in the eyes of both business and consumer users. If that happens, the door opens for Microsoft’s Windows Phone to challenge RIM as the smartphone space’s third major ecosystem.

At the moment, RIM appears safe from a serious Windows Phone challenge. Research firm Nielsen estimated the company’s share of the US smartphone market at 18 percent till August, behind both Google Android (43 percent) and Apple’s iOS (28 percent) but well ahead of Microsoft (8 percent).

Microsoft stands ready

However, Microsoft is determined to seize a greater share of the market. Its methods for doing so include the new “Mango” update, which started rolling out on 27th September and offers some 500 new tweaks, including a revamped Office hub. Microsoft has also signed deals with manufacturers ranging from Nokia and Samsung to Acer and ZTE to produce Windows Phone Mango devices. Dual-core and LTE devices are apparently in the pipeline, as is a massive marketing effort.

Meanwhile, RIM is still working feverishly to transition to its own next generation of QNX-powered “superphones,” which the company claims will allow it to compete more heartily against the likes of Android and iOS.

Until those devices reach the market, however, RIM will rely on a just-released set of devices running BlackBerry 7 OS. During its 15 September earnings call, RIM reported revenues of $4.2 billion (£2.7bn) for the second quarter of fiscal 2012, a 15 percent decline from the $4.9 billion (£3bn) it earned during the previous quarter. The company shipped some 10.6 million BlackBerry smartphones and around 200,000 BlackBerry-branded PlayBook tablets during that period.

Those numbers have led to analyst pessimism and even a well-publicised call, from Canadian merchant bank (and RIM shareholder) Jaguar Financial Corp, for a RIM shakeup. “Everybody is in support of a sale of RIM or another value creative transaction,” chief executive Vic Alboini told Reuters on 11 October.

A persistent series of service disruptions won’t help RIM’s attempts to maintain its user base, or push its latest round of BlackBerry devices as reliable and secure above all others. BlackBerry users in North America took to online forums and Twitter on 12 October, to complain of service outages, a day after similar reports began trickling from geographic areas as diverse as Europe, the Middle East and Africa, Brazil, Chile, Peru and Argentina.

RIM must take action

BlackBerry users in Baltimore, New York City and Ontario told eWEEK they were experiencing issues with their service. RIM declined to respond directly to a request for comment by press time, but provided some updates through its official channels.

“BlackBerry subscribers in the Americas may be experiencing intermittent service delays this morning,” RIM wrote in a short message posted on its site on 12 October. “We are working to resolve the situation as quickly as possible and we apologize to our customers for any inconvenience.”

In another posting, the company suggested that the issue had become “our Number One priority right now and we are working night and day to restore all BlackBerry services to normal levels.”

If RIM can’t achieve that goal — or if it does, only to combat yet another widespread outage in a few weeks — it could drive BlackBerry users into taking another look at an alternative platform, just as Microsoft makes another effort to amplify Windows Phone’s marketplace presence. The end result could be a market shift, and not in RIM’s favor.

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