TORONTO (AP) - The Blackberry has left a bitter taste in the mouths of its users.
Trying to make amends for massive outages last week, Research In
Motion on Monday promised Blackberry users free premium apps and a month of technical support. But the apology is unlikely to placate
miffed customers, many of whom are considering whether to part with
the tarnished brand in favor of more popular devices such as Apple's newest iPhone.
Jim Balsillie, one of the company's two CEOs, acknowledged in an
interview with The Associated Press on Monday that his company has
come under intense pressure. Even so, Balsillie defended RIM's handling of the crisis, the company's worst outage ever. He noted that RIM has survived through rough times before.
The Canadian company said it will give Blackberry users free app worth more than $100. The apps will be available over the coming
weeks on BlackBerry(at) App World. They include iSpeech Translator,
Bejeweled and Texas Hold'em Poker 2. The offer runs until the end of the year.
For its enterprise customers, Research in Motion will offer a month of free technical support.
Last week's blackout interrupted email and Internet services for tens of millions of users around the world and left RIM executives apologizing profusely days after the crisis began.
BlackBerry phones are already struggling to keep pace with competitors like Apple Inc.'s iPhone.
Indeed, the RIM's outages came at a particularly bad time. On Friday, Apple introduced its most recent iPhone -the iPhone 4S. In its first three days on sale, according to Apple, 4 million of the new phones were purchased. That's more than the average number of Blackberrys RIM sells per month.
RIM has since scrambled to reassure customers. Balsillie stressed that the company is taking the problem seriously. He said the free offer to consumers includes high value apps.
"This is something we would like to offer as our form of thanks. It's a $100 worth of premium apps. It's a substantial offer to our 70 million users around the world," Balsillie said.
Balsillie and co-CEO Mike Lazaridis came under pressure last week, when they failed to talk publicly about the outages until Thursday morning, the fourth day of the service interruption.
John Crean, national managing partner of Nation Public Relations, the largest public relations firm in Canada, said RIM was too slow in managing the crisis. "Given the significance of the delay and the global nature of it they should have had their CEOs out earlier and more visible," Crean said.
Crean said the latest crisis has to be looked at in the context of what's been happening to RIM. He said the narrative of RIM over the last year is that they've lost the cachet of having a must-have smartphone.
"The brand has diminished significantly in the last year and this is not helping at all," Crean said.
Crean said the app offer is a good tactic, but by no means a strategy to repair the brand. He said he still hasn't heard what RIM has done to enhance its system to avoid future interruptions.
Chris Allen, a 26-year-old cable technician in Fall River, Mass., said he was happy to get free apps for his personal BlackBerry, but thinks the offer will miss the mark with core users.
"Most of the people that use BlackBerrys are business people and all they care about is: `Does it work?"' Allen said.
When service went out on Wednesday in the United States, Allen worked around it by using a third-party Web browser that wasn't
tied to BlackBerry's network. He's pretty sure he'll get another BlackBerry when his phone contract is up next year, and the outage
didn't change that.
"There's nothing that can beat a BlackBerry for productivity," Allen said.
In the Indian capital of New Delhi, Vandana Mehra, who works for the World Bank, thought the offer of free apps was "kind of ludicrous." The apps already on her phone tend to crash, and she doesn't use them much. The 46-year-old depends on her BlackBerry for communications and Web surfing, so the outage irritated her.
Larry L. Smith, the president of the Institute for Crisis Management, a public relations company, said the most important thing a company can do in a meltdown is to take responsibility for the problem and communicate what they're doing along the way to fix it.
Balsillie said he was too busy trying to find out what the root cause of the problem was to comment in the first days of the crisis. He said he was in the Middle East at the time and spent day-and-night on the phone with customers and carriers.
"The most important thing is staying connected to the ecosystem and making sure you're on what's the root cause. If you spend more time on PR it's less time finding the root cause," Balsillie said.
Peter Misek, an analyst at Jefferies & Co. in New York, said RIM had to figure out what was wrong before they announced anything. Misek said it was just the latest in a string of problems for RIM, which has faced product delays, poor reviews and disappointing sales. RIM's stock is down over 80 percent from its high three years ago.
Misek said RIM is behind competitively and is in the process of transitioning to a new operating system and thus RIM is facing more uncertainty than ever.
The service interruption could not have come at a worse time for RIM as it struggles to compete with Apple and with makers of smartphones running Google's Android system.
Although BlackBerrys have dominated the corporate smartphone market, their popularity in the consumer market is waning. U.S. consumers have moved on to phones with big touchscreens.
RIM's Playbook tablet computer has also been a major disappointment. RIM shipped about 200,000 of them to retailers last
quarter. That was far short of what analysts had expected, and paled in comparison to the top-selling iPad, of which Apple shipped 9.3 million units during its most recent quarter.
Misek said much of RIM's future depends on it releasing BlackBerrys with the company's new QNX operating system, designed to compete with iPhones and Android phones. RIM has delayed the launch of QNX phones for months, but Balsillie suggested there could be an announcement on Tuesday when Larazidis is due to talk at a big apps-development conference in San Francisco.
"I wouldn't want to steal any of Mike's thunder," Balsillie said. "It will really be a substantial show."
Balsillie said the new software "leap frogs the mobile industry" and poises RIM to have an engine for the next decade. He noted that RIM overcame doubts during their first days when they went public 14 years ago, in the midst of the tech crash 11 years ago and during a patent dispute in 2003 and 2004 that threatened to shut down its service in the U.S.
Balsillie said he doesn't want to be cavalier about the problems RIM faces but said those who believed in RIM's technology and management during past crisis "tremendously prospered each time."
It's clear that investors were still not in a forgiving mood Monday.
Shares of Research in Motion Ltd. slumped more than 6 percent, or $1.49, to $22.48 in afternoon trading. Earlier this year, shares traded above $70 each.
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