RIM’s BlackBerry brand once owned the smartphone market in the UK, but after a string of PR disasters (London riots and the recent three-day outage), its reputation for reliability and security is now looking a bit tarnished.
The company’s confused stance on encryption, under pressure from regimes around the world, hasn’t helped either. By an unfortunate coincidence, the failure of RIM’s core switch in Slough coincided with Apple’s iPhone 4S hitting UK stores.
The iPhone 4S features iMessage, a direct competitor to the BlackBerry Messenger (BBM) instant messaging service that has made BlackBerrys so popular in the youth market. ‘So users coming to the end of their contracts will now have a reason to think beyond BlackBerry,’ argues Francisco Jeronimo, research manager for European mobile devices at IDC.
Will operators and resellers desert BlackBerry or has RIM done enough to retain consumer interest among its 70 million customers? Only time will tell.
In the aftermath of the London riots, RIM’s promise that it would ‘engage with the authorities to assist in any way we can’ led to fears that confidential data sent via BlackBerry devices would simply be handed over to the police.
Far worse, however, was the three-day outage from 10-12 October, which was blamed on a switch failure in the core network in Slough and the backup system that didn’t work. The switch is akin to a telephone exchange where the calls just stack up. It’s not like an internet router where you can just abandon the data and start again.
RIM is not alone in relying on servers to provide mobile phones with a service. Opera’s Mini browser, which features in Vodafone’s 555 Blue phone among others, employs similar technology.
An Opera spokesperson told Mobile: ‘Yes, it’s correct that all Opera Mini traffic is sent through Opera’s compression servers. As for uptime, we have several data centres around the world that handle compression traffic. They are designed with redundancy in mind, to take over for lack of capacity elsewhere. Unplanned downtime is rare at our data centres and so far the redundancy has worked as expected.’ As IDC’s Jeronimo observes: ‘It shouldn’t have happened.’
It’s difficult to measure what impact such events have on the consumer, but shopping comparison website Kelkoo tried to gauge the public mood. Its survey found that 62% of consumers would now opt for an iPhone above all other brands as a direct result of BlackBerry’s service problems.
Among the 1,075 existing BlackBerry users surveyed, almost one-fifth (19%) are thinking about moving to another manufacturer and 42% will think about changing when they next upgrade their handset. Only three in 10 (29%) respondents would still purchase a BlackBerry phone.
As Jeronimo observed: ‘There were also reports of consumers demanding compensation as they were paying for a service that wasn't working.’
Mobile interviewed three typical BlackBerry owners, all women under 21, and one of them – Claire Greenaway from Epsom – was adamant that she wanted a refund. ‘I don’t want free apps because I don’t really use them and most of them are games. What I want is my money back.’
Bizarrely, Demi Web from Worcester Park was in Vodafone’s Epsom store hoping to switch phones when it was robbed of its existing stock. She’s now on an iPhone 4S waiting list with O2. The third BlackBerry owner, Trish Hull, is happily sticking with her device.
Among the UK operators, Virgin Mobile seems to have been the most proactive. It sent a text message to all of its BlackBerry users that stated: ‘We’re happy to say that RIM has fixed the recent BlackBerry issues. We hope this hasn’t caused you too much trouble.’
Virgin spokesman Asam Ahmad claimed that the incident hadn’t changed the operator’s approach to BlackBerrys. ‘It’s still one of our top performers,’ he told Mobile. The company heavily promotes BlackBerry products to its Virgin Media customers. ‘It fits the profile of our customers who are tech-savvy, high-speed data users,’ explained Ahmad.
RIM’s response to the outage, of course, has been to offer BlackBerry owners £60 worth of free apps as a ‘thank you’ for their loyalty. These apps are gradually being rolled out, although to date there were only four and Shazam’s Encore still wasn’t one of them. Typically, RIM’s communication of this offer to its customers has been poor.
Virgin’s Ahmad admitted his company hasn’t texted customers the news for several reasons, one of which is a desire to avoid tech support for the offer. However, it has published a clear explanation for BlackBerry owners on how to obtain the freeware on its community support forum, community.virginmedia.com.
Vodafone sent a text to its BlackBerry owners concerning the free software offer. Demi Web tried the game and found it asked for £1.49 after the first level was completed. The other ‘free’ app reads out received texts but asks for nearly £10 to recognise the sender’s name from the address book.
‘The BlackBerry brand still has a very strong value proposition and BBM is still the main communication tool for teenagers in countries such as the UK [as a recent Ofcom report showed],’ IDC’s Jeronimo observed. But is RIM doing enough to compete against Apple and Android?
Craig Cartier, an analyst with Frost & Sullivan, says: ‘RIM has already taken steps to improve relative to the competition, most notably through its acquisition of The Astonishing Tribe (TAT) as a means to improve user interfaces, and the acquisition of the QNX operating system.’
RIM announced its BBX OS last week, along with a range of support services for the app developer community. As Cartier says: ‘These moves represent real improvements in key areas, but the question is: are they too little, too late?’
The market has reacted by pounding RIM’s share price, which is down 60% from a year ago. At the height of its success in 2008, RIM was worth £50bn, but the firm has recently been valued at £8bn.
‘It’s a shame to see the BlackBerry brand turn rotten, but the co-CEOs at the top are going to have to pull something very, very special out of the bag if they’re to turn it around,’ commented Tamlin Magee, principal analyst with TM Analysis. ‘Otherwise, it’s hard not to see RIM’s iconic mobiles going the way of Symbian – where a buy-out might be its only hope.’
How the BlackBerry service works
When you activate a BlackBerry device it sends your mail server information, username and password to a RIM global data centre (or NOC – Network Operation Centre).
Next, the BlackBerry mail server uses the email connection information to retrieve messages from your email host, puts them into the BlackBerry servers, and then pushes them back down to your BlackBerry device.
If RIM’s core switch is affected (as it was for three days), then millions of people are cut off from their email, BBM messaging service and the internet.
Understanding the Slough outage
RIM’s BlackBerry services went down on Monday 10 October due to a core switch failure in the UK. This initially impacted email and message delivery in EMEA (Europe, the Middle East, and Africa).
By Tuesday, the outage had spread to some Latin American countries since Telefónica  runs its BlackBerry service from the UK.
By Wednesday, North American users were reporting problems. Only four days later was the service back to normal. A root and branch analysis of the whole network is now underway.
An alternative way to keep corporate BlackBerry users happy
Significantly, US-based unified comms provider IceWarp offers software that enables users to bypass RIM’s infrastructure and connect a BlackBerry device directly to a corporate email server. ‘Advantages are obvious,’ claims Ladislav Goc, IceWarp’s president.
‘Your emails are not dependent on the RIM data centre’s behaviour – your emails are stored on your company’s own server, and you can still use your favourite BlackBerry device!’
IceWarp believes that while BlackBerry devices are gradually losing their market share to Android and Apple smartphones, BlackBerrys still have a future in the corporate world. ‘Millions of businesses are used to BlackBerrys and the only bottleneck that needs to be removed is the RIM synchronisation dependency,’ Goc concluded.
John Cooper, IceWarp’s director of North American sales, points out: ‘We do have a channel programme and the standard commission rate is 25%, but that can be adjusted based on sales volume.’ Like many of RIM’s competitors, IceWarp’s product uses SyncML or ActiveSync standards to ensure emails bypass RIM infrastructure. One of its customers, therefore, is the British Army.