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The BlackBerry BIS Outage is a Bigger Threat to RIM than the iPhone 4S or Android Ice Cream

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RIM’s BlackBerry customers are experiencing a further outage as the BlackBerry Internet Service (BIS) fails again (BBC News coverage) for the second day of problems. The issues started yesterday, on Canadian Thanksgiving. RIM is a Canadian company. These service faults cover a wide geographical region across Europe, Middle East and Africa but not North America. BIS is the network service that powers consumer email, BlackBerry Messenger (BBM), and other BlackBerry Internet functions for consumers. SMS and voice calling is unaffected.

This isn’t the first such problem with BIS (or see here), but the timing is horrific, for multiple reasons:

  • BBM rival iMessage arrives tomorrow on Wednesday, October 12. iMessage is a part of the iOS5 update for iPhones, iPads and recent iPod Touch models. Similarly to Facetime’s integration with voice telephony, iMessage replaces an iPhone’s SMS app and automatically delivers the improved messaging experience if the phone knows a recipient is also an iMessage user. It also uses Apple’s cloud service to sync messages across the iPad and iPod Touch that lack SMS messaging ability.
  • The new version of Android, Ice Cream Sandwich, is imminent. While Apple is the key competitor for all high end smartphones, it’s Android-powered phones that threaten to eat into RIM’s Curve & BBM toting young customers.
  • RIM is suffering a fall in device unit shipments. That’s perhaps too mild a summary, RIM has reported a terrible set of results for its most recent quarter combined with appalling sales for the PlayBook tablet. RIM needs to be able to devote its resources and prestige to expand with new innovations and not run to stand still by patching old services such as BIS for existing users.
  • RIM is midway through a risky technology transition. Current BlackBerry smartphones run an evolved version of the same software they have for years. The new QNX software is in development and is on which RIM’s future depends. RIM will have to persuade current users to transition to this new product range that will almost certainly have some irritations for long term users, even if QNX smartphones are excellently executed. Long term users often dislike small changes that new users wouldn’t notice.

What’s clear from the metrics I analyzed yesterday is that the rapid growth of Android is squeezing RIM, Microsoft and Symbian tremendously while Apple is holding its own. RIM has to fix these outages fast and resolve the customer relations disaster or its customer retention levels will drop.

RIM shipped 10.6m devices in its Q3 2011, down from 13.2m the previous quarter. If these outages cause customer satisfaction to fall further then RIM will have an even harder transitionary period. Re-acquiring lost customers will prove much more expensive than upgrading current Curve and Bold users when QNX smartphones ship in 2012. RIM is in danger of becoming its own worst enemy if it is unable to reliably operate the communication services that have differentiated it. BBM is the reason many young consumers stay with BlackBerry. If it doesn’t work, they will leave RIM.

RIM’s competitors must avoid schadenfreude. Too many of their new services borrow the centralized design and thinking of RIM’s to date successful services (BIS and BES were essentially mobile cloud services far ahead of their time that delivered lower data usage, effectively faster mobile data speeds, and high security).

Apple’s iCloud is the most pressing near term example. It goes live tomorrow (October 12). The last time Apple tried something like this with MobileMe it had numerous bugs. Steve Jobs uncharacteristically described MobileMe as, “it wasn’t our finest hour” during the iCloud announcement last June. Microsoft and Google have similar centralized services that increase users’ dependency on their smartphone’s software’s creator.

But Apple does not rely on iCloud to differentiate, at least for now.

For RIM, the services that are down today are precisely those with which it differentiates its consumer offerings.

Written by Ian Fogg

October 11, 2011 at 6:12 pm

2 Responses

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  1. […] “RIM is in danger of becoming its own worst enemy if it is unable to reliably operate the communication services that have differentiated it. BBM is the reason many young consumers stay with BlackBerry. If it doesn’t work, they will leave RIM,” Fogg blogged. […]

  2. […] Ian Fogg, a mobile industry analyst, said RIM had built its reputation on reliability. […]

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