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Global glitch bruises RIM

Description: A major technical glitch affected BlackBerry service across much of the globe Wednesday, delaying e-mails and messages for an estimated 30 to 40 million users – about half of RIM’s customer base of 70 million.

Source: CNN.com & Globe and Mail.com

Date: Oct 13, 2011

The problems, which began earlier in the week in Europe, the Middle East and elsewhere but have now moved to North America, RIM’s largest market, come at the worst possible time for Canada’s leading technology company.

BlackBerry shipments have fallen two consecutive quarters, it is losing market share in the United States, and it has been stung by a number of executive defections and delayed and botched product launches.

Its share price, which fell 3.5 per cent yesterday, is down 58 per cent this year after a series of profit warnings.  READ REST OF STORY

Questions for discussion:

  1. Can RIM survive this latest problem with their system? Why?  Or Why not?

2.  What path can they take to restore the “Blackberry” brand to that of a leader in this sector of the industry?  Explain

18 Responses to “Global glitch bruises RIM”

  1. Iryna Guzhva

    RIM is losing their market share. As it was stated, RIM is already third after Android and Apple. People have options who to chose from. Power outages happened, but people sometimes reluctant to rapid change the electricity provider. But I admit those who rely on “Blackberry” are disappointed by last glitch.
    RIM has to come with better service for “Blackberry” customers and do not let this happen again, and establish new service/product for the customers.

  2. Randy Bonham

    As a Canadian citizen i hope that blackberry can recover from their recent severe troubles and rebound to become a global technological leader. Blackberry has contributed a significant amount of resources, both financial and technological, to the improvement of our Ontario educational institutions. They were the pride of the Canadian high tech industries. Unfortunately they were on top for so long that they ignored some key components of their business. RIM has never put much emphasis on advertising, because for the longest time they didn’t have to. While RIM continues to invest in R&D, they focus on improving their existing product instead of trying to lead the industry through the use of new technology. Finally RIM is facing is the threat of new competitors, competitors that are much larger and have a huge advantage in financial resources. Combined with the recent disasters, the future doesn’t look good. Their playbook couldn’t compete with the ipad, and their foray into consumer products, versus their tradition business demographics has turned into a fruitless endeavour. Finally the one thing that RIM had going for it, besides its security features, its reliability became a detriment as it was exposed. I hope that blackberry can survive, even if it’s a fool’s hope.

  3. Chris Schulz

    I wouldn’t go as far this is a knockout blow for RIM. However they need to be very careful over the next year or two. Blackberry shipments have fallen two quarters in a row now and with this recent outage they could possibly be heading for a third. Blackberry users are very frustrated right now, some to the point where they have come over to the dark side and purchased the new iPhone 4S. RIM has taken proper steps and has admitted that there is a problem and that they are working to fix it. They have also done some key damage control in the form of a $100 credit for all users to blackberry app world. RIM needs to rethink their strategy about which markets they want to get into. They like many other companies tried to compete with Apple’s iPad and have failed miserably in doing so. They also lost a lot of capital pursing a tablet device which has reflected in a 56% decline in their stock prices from last year. If they keep to the business market they should be well off as long as Apple doesn’t get in. If Apple does break the business market then they could be in for some trouble.

  4. Mark Dicks

    I think it is only a matter of time before RIM discontinues the development of new BlackBerry products. With a glitch that affects half of its customer base, a company cannot survive these glitches before their customers lose faith in the product of the company, especially when so many people use it for business purposes. With stock continuing to decline and the forever losing of market share to Apple and Android, the age of BlackBerry is that of days gone by.

  5. Kashika Bhatia

    I own a Blackberry and I experienced the same problem for 48 hours that almost 30 million other people experienced in the world. Technology still has its flaws and I believe that people are making a big deal out of nothing really. Having a day or two without constantly glancing at your phone or having your fingers stuck to it 24/7 is not going to be the end of the world. I agree that businessmen may be effected the most as they might be at a loss but what businessman today does not have a laptop or an iPad in today’s time? I however do believe that this technological glitch has caused shares and supports of RIM to fall even more than before. I don’t think that Blackberry can gain its market share back when they are competing against companies like Apple which is known for its innovation. A majority of Blackberry supporters are there because of the Blackberry Messenger and the high level of privacy but I think that other companies now know this and offer their own messenger service and advertise other applications which weigh greater than what RIM offers. However, I do think that it is silly to switch to another company just because of technical glitches as I’m positive that other companies have experienced the same numerous times in the past and will continue to in the future as with any form of technology.

  6. Chris Inglis

    I am sorry to say that I do not think that blackberry will survive this latest problem. There recent downfall has been steadily declining for quite some time now and it seems that this is just the cherry on top. Their market share has been declining rapidly to competitors who are NOT having this type of problem and I feel even more users will switch. Another reason why I feel that many more user will abandon Blackberries is because that their reputation has been built around their business consumers due to their e-mailing aspects. Through them having malfunctions with the only thing that differentiates them from the other smart phone producers I feel could be the deciding blow.
    I think if they are to restore the “Blackberry” brand to this sector will be difficult, however they need to create/invent elements to the process of emailing that no other smart phone acquires. The business aspect of this company was its claim to fame so to speak, and it needs to recapture it. Through the modern day business developments I think Blackberry needs to stay in tune to them in order for them to pick back up their end of the market.

  7. Christopher Rush

    This “glitch” as it were, could not have come at a worse time for research in motion. People are very excited for the new iPhone and the market for smart phones is fiercely competitive. I honestly do not believe that RIM will survive too much longer, and I think they will be some much larger firm’s acquisition. They have been steadily losing market share for some time now and the only thing keeping them here so far is their brand value, though it is diminishing, and their private network that gives them their competitive advantage. To remain competitive, Blackberry will need to restore investor confidence, invest in research and development, develop applications advertise aggressively and drop dog markets. RIM needs to regroup and refocus their strategy. Of course all things will not remain the same and there it is quite possible for RIM to rise again given the right leadership, strategy and exploitation of opportunity. If you’re going to compete with Apple, Google, and Microsoft, you’re going to have to play hard ball and spend some money as well. I do hope that RIM gets it together because we need more players in the smartphone industry, especially more Canadian players.

  8. Regan Smiley

    Last weeks seriously inconvenient (I know being a blackberry user) glitch really hurt RIM’s reputation. I have been a very happy blackberry using for years now and I almost lost my mind last Wednesday when that ugliness occured. It’s hard to say whether they will be able to survive this slip up or not. So many people these days are switching from RIM products to iPhones, I personally know about 3 or 4 who did just due to last Wednesday’s occurance. It is well known that RIM is loosing much of its market share as the article states and that has always been one of their number one selling points. The fact that they are reliable and things like that just don’t happen with RIM products.

    The path they may need to take to restore their repuation would probably be to take a page out of their competitors handbook. They need to make their product a little bit more efficient in terms of the overall product. I know up until Wednesday I was very happy with the reliability of the product but the speed of the internet as well as some other features were a little bit frustrating. The iPhone is basically as fast as a computer and therefore have a competitive advantage over the blackberry.

    Updates and promises that such things as last weeks mishap won’t happen again will help blackberry slowly get back into everyone’s “good books”.

  9. Mayowa Ashade

    RIM’s last outage was in Decemember 2009, and was also experiences in 2008. its so embrassing for a company that has built its reputation on notion of service and reliability. The outage doesnt help the company’s perception with consumers and businesses. However, considering the fact that they have fallen two consecutive quarters and losing its market share as well the kind of pressure they will get from their competitors, i doubt if they will remain in the industry.

    To restore their reputation and brand, i think they should work towards developing new strategies and techniques as well as upgarde their technology.

  10. Corina Nelson

    In order to restore their brand, I think that Blackberry needs to take a risk and make some major changes to their phones. With each new model of Blackberry they have not made very many changes to how the phone is set up, and I think they were too conservative, especially with the major break throughs that Apple and Android have had.
    With the new update & phone that Apple introduced, it is really poor timing for Blackberry to be experiencing those problems. I think that some people were already having doubts about Blackebrry and that the problem with their system made Blackberry users want to switch over, and reassured Apple users that they have made the right choice.

  11. Mark Dicks

    I think it is only a matter of time before RIM shuts down the development of new BlackBerry products. With a glitch that affects half of its worldwide customer base, a company cannot survive these glitches before their customers lose faith in the product of the company, especially when so many people use it for business purposes. I know of a few people who have switched from BlackBerry to an IPhone and Android since this glitch has taken place. They found the glitch very much a high inconvenience and almost went insane when they couldn’t use their phone. My friends tell me they have not regretted switching to another phone one single bit and that they should have done this sooner. I can only imagine the amounts of other people who have switched since this glitch. This glitch could have not come at a worse of a time than it did for Blackberry. With the IPhone 4S debuting around the same time as the glitch happening; with the price of shares continuing to decline; the forever losing of market share to Apple and Android; and with the Playbook competing with the all IPad, the age of BlackBerry is that of days gone by.

  12. Erin Mitchell

    This is going to have grave reprocussions for RIM. People have become so reliant on technology that if they don’t have it, they feel like they cannot function properly in a business and in a personal sense. I am an iPhone user, but if I was a blackberry user and I couldn’t use it for a couple of days, I would be mad. And whose to say that it wont happen again. That being said, I am sure this was a bit of a wake up call for other communication providers and they are able to learn from RIM’s mistakes. I heard on the radio that during the time that the RIM service was down, in a Middle Eastern country (can’t remember which one) the number of car accidents went down 40% according to local police. This is a huge wake up call that supports the idea that cell phone use while driving is a global issue and should be delt with all over the world.

  13. patricia ojuderi

    I think that soon Blackberry would go out of business. if a service loss occurs again i believe that a lot of their customers would switch to other phones like Android or Apple. they need to fix the problem with their router to survive.

    In order to restore the “Blackberry” brand RIM must “deliberately “throttling,” or slowing down, data traffic in Europe. However, many messages travel in to and out of the continent from other regions. Soon, the backlog of messages had spread to Asia and North America. Business and consumer users in those areas were suddenly unable to access services such as Twitter, surf the Web or receive e-mail on time.” the need to have a router that is able to handle the massive data that their users send.

  14. Richard Infante

    i think rim can easily survive this problem,if it does not become a reoccurring thing. though its market share went down i believe that it will increase again. other companies survived much worse than not being able to send or receive emails, such as Toyota and their breaks problem a couple years ago. the only way to restore the bran in my opinion is to assure that if their server goes down that the back up WILL work.

  15. Kaitlyn Boyle

    If RIM can find a way to upgrade or adapt their system I think that they could survive in today’s market even with their recent problem. Blackberry has many things going for it especially their secure “Network Operating Centers”, which big competitors such as Apple or Android cannot provide. If some sort of upgrade was possible to fix their excessive stream of data traffic and was publicized in the correct way I think that many businesses that need secure connections such as government customers would continue to be loyal to the Blackberry brand. Unfortunately in my opinion I don’t see Blackberry being a leader in this sector of the industry for reasons other than the RIM crash. Apple has recently upgraded their phone operating system to iOS 5, which enables iPhone users to communicate with iMessage, a similar system to Blackberry’s BBM concept. Many people have stuck with their Blackberry’s throughout the years because they don’t want to give up the ability to see when a message has been delivered and read. However, with Apple’s new operating system iPhone users are given that same ability and with all of the other enhanced features that come with Apple products such as access to over 100,000 apps I can see many people making the switch with their next phone purchase.

  16. Taylor Chobotiuk

    I believe RIM is a declining company that due to decisions made in the past and lack of innovation in regards to an operating system. This glitch may just expedite the rate of users switching to another device. Although Blackberry users enjoy the lower priced data plans and BBM I think that iPhone and Android will innovate further to create more and more options that will rival all of their current options.
    I believe if Blackberry moves out of the tablet market and concentrates on innovating their software and optimizing their interfaces to make it a little cleaner they can reinvent themselves as a global player once again. But then again, it may be too late and these little hiccups every few years does not help their brand image at all.

  17. Stacey Kowalchuk

    I think RIM can survive this latest problem for a while. I do not however think they will survive in the long run. These problems keep happening and I think they are more annoying than anything. People need to be able to rely on their provider, and if RIM can’t fix these problems and provide us with the service we need people will start moving to other companies. I personally don’t know how long ill stick around with blackberry. They provide us with email and BBM but now Apple has come out with new things that give us BBM in their software. With all the fun things you can do on Apple, who wouldn’t want to switch over? I think RIM needs to fix these problems and build their reputation back up. This would increase the amount of customers they get and the image of the company. Without these things, RIM will slowly slow down and disappear into the background with all the lower companies. Right now RIM has the chance to improve their service and products and keep up with Apple. If they loose that now, there may be no coming back for them. They have an opportunity to come back fighting against their competitors. I hope they take it and come back with stronger, better products.

  18. Kevin K

    I don’t believe that RIM can survive the latest problem with their systems. They have already been on decline, losing customers to both Apple and Android platforms. This graph is a telling story on where people are looking to go for their future smartphone needs. http://static6.businessinsider.com/image/4c571d707f8b9aea78670100/chart-of-the-day-desired-smartphone-os-august-2010.jpg
    This shows that RIM will lose more than half of its current customers while drawing in next to no new customers. Also keep in mind that this information came out before the RIM outage, which probably moved potential RIM customers towards an alternative smartphone.

    Their market share has been on decline for a few years, and Apple and Android have seen their market shares increase over the same period. If they’re smart, they sell their company to a company on the rise in their market and get out before they become obsolete.

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