Sunday, October 16, 2011

Blackberry Outage Ends

Research In Motion's (NASDAQ:RIMM) Blackberry devices, which depend on RIMM-supplied back-end support for which RIMM charges subscription fees, suffered an intercontinental email service outage that began October 10 and went unresolved until October 14. Now that the outage is over, some customers who bought RIMM's "ready for business" pitch are re-assessing the single-point-of-failure aspect of depending on RIMM for critical infrastructure.

Although RIMM has suffered (and suffered) in stock price (market cap is at the time of writing about a tenth of the $123B RIMM once commanded) and in market share, it now also suffers a setback in something that might be hard to restore: its brand.

If RIMM's profit continues to suffer pressure, infrastructure investment (and service quality) may be in long-term jeopardy. The discussion of RIMM as a takeover target (more here) is interesting, as it offers promise of capital with which to address service quality – and management change to aid re-direction in a more competitive direction.

Frankly, a successful and independent RIMM has been a good motivator of other manufacturers; I hope they pull the firm out of its dive. RIMM has a large subscriber base; hope springs eternal.

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