Bad timing: BlackBerry outage hits RIM on iPhone 5 daySeptember 21, 2012: 12:45 PM ET
Research in Motion (RIMM) really can't catch a break. The troubled (to put it mildly) maker of the BlackBerry brand of phones/e-mail devices has been struggling due to brutal competition from the likes of Apple (AAPL) and the army of companies in the Google (GOOG) Android camp, most notably Samsung.
With Apple's iPhone 5 (iOS6 map app warts and all) debuting Friday to long lines outside of Apple stores and those of iPhone carriers Verizon (VZ), AT&T (T) and Sprint (S), you'd figure it was already going to be a tough day for RIM. But BlackBerry users woke up Friday to the news that there was an e-mail outage.
Shares of Research in Motion plunged 6% in early afternoon trading and were perilously close to their 52-week low. The stock is now down 55% year-to-date. Making matters worse, this news comes ahead of next week's earnings report. Expectations are already low -- analysts are predicting a loss of 47 cents per share on a stunning 40% drop in sales from a year ago.
RIM has tried to assure investors and customers that, in Mrs. Doubtfire fashion, help is on the way! RIM keeps promising the world that its long-delayed BlackBerry 10 phones will be great. But investors are growing tired of waiting for the phones (now scheduled to be released in early 2013) to finally hit the shelves. Many traders on StockTwits are also growing increasingly skeptical about the future of RIM.
Ouch. It does seem that RIM is stuck in a race with Nokia (NOK) that neither company should want to win: Who's the next Palm? (In case you forgot, Hewlett-Packard (HPQ) bought Palm a few years ago for a fraction of what it was worth at its peak and essentially shut the business down a few months later.) Nokia may have a better chance of survival though since the company is latching itself to Microsoft's (MSFT) Windows Phone train.
RIM really does seem to be adrift all by itself in the vast technology sea. But some investors erroneously seemed to think that RIM had forged a closer alliance with Microsoft earlier this week and that briefly lifted RIM's stock.
Shares rose more than 2% Tuesday on the news of a RIM-MSFT licensing deal. However, the agreement merely allows RIM to use some of Microsoft's technology and not the other way around. What's more, it was a fairly mundane deal that Microsoft has with other device makers. So it looks like investors got too excited about the Mister Softee stamp of approval.
Still, at least one StockTwits user thinks people are being too harsh on RIM.
He is right. To be fair, it looks like the service disruption was brief. RIM tweeted this out about three hours after it first acknowledged the outage.
RIM followed that up with a link to a message from RIM CEO Thorsten Heins in which he apologized for the problem and said that the company was "conducting a full technical analysis of this quality of service issue."
Nonetheless, the problems are sure to remind many RIM investors and BlackBerry subscribers of the far more widespread outage that hit the company nearly a year ago -- coincidentally right around the time of Apple's iPhone 4S launch.
I'd love to stop referring to RIM's flagship product as BleakBerry. But RIM can't afford too many more bad headlines. Time is running out.
And now it's time for my Reader Comment of the Week. It's unsurprisingly about Apple. A lot of people (including yours truly) have had fun with this whole MapsGate issue. Here's my favorite comment about the navigational mishaps.
Hmm. Well Penn State plays in Beaver Stadium and Oregon State's teams are the Beavers. Close enough? No? I just hope that Apple's maps don't pull a Bugs Bunny and keep telling me that I should have made a left turn at Albuquerque.