Continued technical glitches are likely casting a pall on Research In Motion’s image and hampering its fight for market share against the Apple and Android smartphones, a technology analyst said Tuesday.
RIM BlackBerry users in Europe, South America, the Middle East and Africa experienced glitches with their smartphones for a second day, and new problems cropped up in Latin America and India, a day after an unexplained problem cut off Internet and instant messaging services.
Negative headlines on service outages won’t help RIM’s brand with consumers, said Edward Jones technology analyst Bill Kreher.
“The current perception of Research In Motion is becoming increasingly more negative and this does little to stem that trend,” Kreher said from St. Louis, Mo.
RIM (TSX:RIM) is being hurt by the “ongoing loss of market share and the ineffectiveness of current management, to be blunt” he said, adding he isn’t optimistic that the new generation of BlackBerry smartphones hitting the market next year will make a difference.
Adding to RIM’s woes, Toronto-based institutional investor Jaguar Financial Corp. has renewed its call for a shakeup of RIM’s management and either the sale or split-up of the company.
“I would say given RIM’s historical record of reliable service, it is critical that the company get the network back up and running as soon as possible,” Kreher said.
Angry smartphone users posted on social networking site Twitter to vent frustration with the company and bemoan the loss of their messaging capabilities, questioning why the company took so long to restore services.
Research In Motion said some users in Europe, the Middle East and Africa, India, Brazil, Chile and Argentina were experiencing messaging and browsing delays.
“We are working to restore normal service as quickly as possible,” the Waterloo, Ont., company said in a statement. “We apologize for any inconvenience this has caused.”
RIM has about 70 million BlackBerry subscribers around the world.
The technical problems come as Jaguar (TSX:JFC) increased pressure on the smartphone maker on Tuesday.
Vic Alboini, chairman and chief executive of Jaguar, said a total of 12 institutional shareholders are calling for changes at the company. Together they own about eight per cent of the BlackBerry maker’s stock, he said.
Alboini noted that the other shareholders don’t want to be named publicly at this time.
The head of Jaguar said the changes that are being pushed for at RIM won’t happen quickly.
“I suspect this is not going to be a sprint,” Alboini said. “This is going to be a marathon.”
Kreher said a battle by activist shareholders may not lead to a “positive outcome.”
“We believe Jaguar’s action could lead to a protracted fight which ultimately may further hurt Research In Motion. In other words, we continue to believe the company’s prospects will get worse before they get better.”
Alboini said appointing an independent chairman to RIM’s board of directors would be the most immediate change that could happen. It would take five of the nine directors to appoint a new chairman.
As for the technical problems RIM is experiencing, Alboini said it happens from time to time with technology companies and won’t have an effect on his campaign.
“All companies get bugs and have issues, so I don’t think it’s appropriate for us to zero in on RIM,” he said.
“If it became a critical issue that could not be fixed, and it was evidence of a totally broken situation, that’s different.”
The glitches with the messaging feature of the smartphones came after RIM said late Monday that services were fully operational and the unexplained issue responsible for delays in subscriber services had been resolved.
However, problems persisted on Tuesday with several European carriers responding to customer concerns about the outage.
In Britain, Vodafone UK told customers via Twitter that service was not fully restored. T-Mobile UK blamed “a European-wide outage on the BlackBerry network” which it said was affecting all mobile operators.
Etisalat, in the United Arab Emirates, apologized for “the further interruption” to Blackberry services, “once again due to RIM problems.”
Kenya’s Safaricom Ltd. said on Twitter that its Blackberry customers were experiencing a “technical fault” and apologized for any inconvenience.
RIM faces major hurdles as it deals with mounting competition in the smartphone market and the growing speculation among analysts and industry experts that its days of rapid growth are behind it.
RIM was once worth about $70 billion and has, from time to time, been Canada’s most valuable company. Today it has a market value of about $12 billion or so and shareholders have complained about its lagging stock price and corporate leadership.
RIM did not give an explanation for the glitch that occurred on Monday, but some telecommunications companies in the Middle East and Europe laid the blame at the Canadian company’s door.
Among the companies reporting problems at that time were Qtel Qatar, Etisalat in the United Arab Emirates, Dubai-based Du, Zain Kuwait and Bahrain Telecommunications Co.
Shares in Research In Motion were up 46 cents, or 1.9 per cent, to $24.76 in afternoon trading on the Toronto Stock Exchange.
— With files from The Associated Press