RIM: I’ve Fallen and I Can’t Get Up

Published on October 12, 2011
by John Paczkowski

Research in Motion can mend the infrastructure failure that led to what is now a metastasizing three-day BlackBerry service disruption, but recovering from the PR nightmare it has caused will likely take quite a bit longer.

Despite RIM’s repeated reassurances and apologies, ill-will toward the company is building, with public outcry mounting and growing calls for compensation from users all over the world.

And it couldn’t happen at a worse time — just two days before the launch of Apple’s iPhone 4S, which racked up pre-order sales of 1 million in its first day alone, and a week before BlackBerry Devcon, RIM’s big developer event.

A three-day outage like this would be a PR challenge for anyone, but for a company working hard to shore up its declining position in the smartphone market, it’s a daunting one indeed. These outages may well drive some BlackBerry users to consider alternative smartphones, as Jeff Fidacaro of Susquehanna observed in a note to clients this morning.

“Our view is that the longer this issue remains in the headlines and the longer users are without service, there is clearly an increasing risk of building negative goodwill and increasing the churn rate to other platforms such as iPhone and Android,” Fidacaro wrote.

As I write this, RIM shares are trading under $25. In February they were at about $70.50.

Below, a particularly apt skit from comic legend Ronnie Corbett …

Return to: RIM: I’ve Fallen and I Can’t Get Up