It seems Research in Motion (RIM) may be in for an unpleasant turn of events as yet another government agency terminated its contract with them, citing unreliability of RIM’s quality of products and consistent failure of Blackberry services over the last year or so. RIM has built a large customer base in over a million government agencies for nearly decade and recently lost another agency in September. They are now banking on the Blackberry 10’s success in the market to recover their declining business and slightly muddied reputation.
The National Transportation Safety Board (NTSB), a 400-employee government agency that investigates plane accidents, reported a notice to a federal website stating that the phone was prone to frequent failures, particularly at inopportune times, and they could not afford to risk their employees’ safety with these devices during primary investigative missions in remote locations. The NTSB has now planned to switch to Apple’s iPhone 5, according to the document, citing that the Blackberry devices were unreliable modes of communication that hampered their missions.
Aside from their most recent loss, RIM has also lost their contract with General Services Administration, which was severed following the GSA’s recent adoption of a bring-your-own-device policy to cut corners on costs. RIM has experienced two international service disruptions for Blackberry network service within the last 15 months, leaving a painful stain in RIM’s reputation reliability.
RIM’s market shares have also taken a few hits as its largest rivals Apple and Google dominate the market with their respective smartphones, the iPhone and devices running the Android OS. RIM shares have rose 1.2% to close at $9.71 in New York yesterday and, according to Jefferies analyst Peter Misek, its share price has climbed as much as 4.7% in the past week. However, in 2012, RIM has seen a daunting 34% drop in stock price and the company has consequently based all their bets on their newest release, the Blackberry 10 OS, to recover their losses and turn the tide.
Chief Executive Officer Thorsten Heins expects a round figure of 400,000 government agencies in North America to take to the new Blackberry 10 devices and believes that the damage done to their reputation for reliability can be undone. He insists that the failures were due to their government customers still working with older versions of the Blackberry, such as Blackberry 5 and Blackberry 6, and insists that the BB platform will prove be to more than satisfactory with the upgrade to Blackberry 10, which will soon launch globally.
