BlackBerry outage a reminder of why RIM rules

April 18, 2007, 11:20 AM UTC

How do you send the world’s executives into a tailspin? Withhold their hourly CrackBerry fix. Some users of Research in Motion’s (RIMM) addictive e-mail service experienced outages between Tuesday afternoon and Wednesday; the company says service was mostly restored Wednesday morning, but there is still a backlog of messages to work through.

Lawyers and others C-suite types fretted on message boards across the web; on The Wall Street Journal’s MarketBeat Blog, some complained of their suffering. “I may actually have to talk to people! The horror!” wrote a commenter who used the name Oh No. “If you need me I’ll be curled up under my desk in the fetal position.”

When there’s a service outage like this, it’s natural to wonder whether Research in Motion is in trouble. There is a bevy of smartphone device providers out there, after all; Palm (PALM) has the Treo, Motorola (MOT) has the Q, and Apple’s (AAPL) iPhone is coming out soon. Is the BlackBerry in a jam? Is it toast?

Not even close.

While the other smartphone players are focused on the device-making game, RIM is playing two games at once – and doing a splendid job. Not only are its BlackBerry devices the number-one smartphones in the U.S. market – it had 45 percent market share in the fourth quarter, according to research firm IDC – RIM also has a wireless e-mail service with 8 million subscribers, one million of which signed up in the last quarter, according to documents the company filed with the Securities and Exchange Commission. RIM has a base of deep-pocketed enterprise customers who view its devices and services as must-have tools, and now the company is making inroads with the consumer market thanks to its popular BlackBerry Pearl.

That’s why RIM should be fine now, and fine when the iPhone arrives. RIM has become the big dog in the smartphone market by building not only a smart device, but also an e-mail service that millions of corporate users have embraced.

There are dangers, however. Some BlackBerry users have complained that service has been spotty lately, and no enterprise user likes to be too dependent on a single service provider. This outage could inspire IT managers to look for alternatives to RIM for wireless e-mail, and Microsoft is more than willing to chat with them.

But if RIM can fix its system problems and pacify its high-powered users, I wouldn’t be surprised to see it maintain its strength for quite some time.