BlackBerry outages latest black eye for RIM
Headaches are mounting for Research In Motion, the company behind the BlackBerry smartphones.Waterloo, Ontario-based RIM is facing pressure from activist shareholders at home while its customers in Europe, the Middle East, Africa, India, Brazil, Chile and Argentina have complained of service problems and outages over the past few days.
The Canadian company on Tuesday acknowledged that its customers are experiencing messaging and browsing delays and blamed the problem on a core switch failure. RIM (ticker: RIMM) says it is “working to restore normal service as quickly as possible.”
But the recent service disruptions are only the latest hurdles for the company that once was a leader in the smartphone market but has lost share to Apple and Google. Stock in the once-highflying company has plummeted 65% from a 52-week high of $69.30 to $24.41 Tuesday. A shareholder group led by Jaguar Financial is pushing for a change in company management and the sale of RIM.
Jaguar CEO Vic Alboini says for RIM co-CEOs Jim Balsillie and Mike Lazaridis “it is time to move on. … “There are all kinds of tech leaders out there that could take RIM in the direction” it needs to go.
RIM has struggled in the market for tablet computers as well. Demand for its PlayBook tablet, which made its debut in April, has been weak. In its second quarter, the company said, it shipped 200,000 tablets , compared with 500,000 in the previous quarter.
To boost sales, RIM last month slashed the price of its slow-selling 16-gigabyte tablet by $200 at Best Buy amid the market dominated by Apple’s iPad. Analysts also noted PlayBook manufacturer Quanta had shuttered production.
“We have a couple of mega issues that are hitting RIM at the same time,” says MobileTrax analyst Gerry Purdy. He says among those are the company’s need to provide software that is easy to use like that from Google and Apple.
Jaguar Financial, a Canadian merchant bank that seeks opportunities in underperforming companies, said Monday it has the support of 8% of institutional shareholders and could get as many as 12% to urge the makeover of RIM. Jaguar says RIM missed the boat on smartphones, tablets and the app market and handed the market over to Apple, Google and others.