RIM's problems mount: executives depart, consumers switch to more advanced phones, and now there's a lawsuit over the recent three-day outage.
Prospects for Research In Motion seem to get worse with each passing day. Earlier this month the mobile phone giant had a glitch that caused most of its users to lose service for up to three days. It was the worst outage in the company's history. Now comes news that users have filed a class action lawsuit due to the outage, it has lost another high level executive, and customers are increasingly leaving to buy phones that perform and function like they were designed in the last year or so.
RIM's problems are entirely of their own making. The global outage never should have happened. In fact, such an outage that targets one platform is impossible with devices that run iOS, Android, Windows Phone, and pretty much anything else. RIM chose to run 100% of emails, Web browsing, and a few other online services through their server rather than let the devices function independently as other devices do. It wasn't the first outage, and won't be the last.
A group of consumers has filed a class action suit against RIM over the outage. This is the same group that successfully sued Reebok over false claims for stating that by just wearing special shoes or pants, you would magically become fit.
RIM apologized for the outage and offered affected users $100 of free apps, apps that RIM chose, not end users. Only an offer of $100 worth of RIM promotional t-shirts would have been more lame.
RIM has lost executives in recent months in sales, marketing, and developer relations. It has now been confirmed that Jim Tobin, senior VP for software and business services, has left the company. Analysts and some shareholders continue to hope that the two top executives, co-CEOs Jim Balsillie and Mike Lazaridis, will leave and give someone else an opportunity to turn the company around.
Not really caring who is running the company, consumers are more interested in how the phones perform. They actually perform great for 2006, but not so much for 2011. Forbes reports that BlackBerry owners are trading in phones running the aging platform in favor of the just released iPhone 4S in record numbers. A combination of the recent outage and the flashy new features of iOS 5 provided enough reason to some to just throw in the towel on their beloved BlackBerrys. High-end Android devices are also aiding in the migration. RIM has nothing that is catching anyone's eye right now. Ask some random people what phone they want and I'd be surprised if any of them mentioned a BlackBerry.
We'll have to see what RIM's next step is. It will need to be more impressive than anything the company has done in years.
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. We've got a management crisis right now, and we've also got an engagement crisis. Could the two be linked? Tune in for the next installment of IT Life Radio, Wednesday May 20th at 3PM ET to find out.