The management at smartphone also-ran Palm (PALM) probably opened their champagne bottles when they heard about the big service interruption that hit RIM’s (RIMM) service network in North America and shut down access to hundreds of thousands of Blackberries. They can put the corks back in.
RIMM has two things going for it. First, it is a monopoly. It may not be that way as The Justice Department would view it. But, the Blackberry is the mobile e-mail device for the huge majority of business people. RIM servers operate in corporate data centers across the country. It is not unlike the ubiquity of Windows save that smartphone devices are not as widely used as PCs. That being said, companies are not going to swap-out their systems and replace Blackberries for all of their employees. The cost and disruption would simply be too great.
The other notable issue is that Blackberry service reliability is excellent. The wide PR from when the system is down would make that seem otherwise, but the actual numbers do not. Of the 8,760 hours in the last year, the RIM system has been down less than 10 of those. Compared to airline, most cars, and PCs that is not a bad figure.
RIMM has its market locked, at least for the foreseeable future. The only people who should have complaints are stockholders. The shares are down from at 52-week high of $137.01 to $94.47. That is a service interruption.
Douglas A. McIntyre
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