A Very Good and Very Bad Week for BlackBerry

This week marked the both high and low points for maker of the popular BlackBerry smartphones, Research in Motion, Ltd. (RIM). Countries including India, Saudi Arabia, and the United Arab Emirates (UAE) have decided to either halt BlackBerry services altogether or have begun discussions with the vendor to convince the company to make concessions. These countries are concerned with the abilities provided to their security agencies to monitor device transmissions. Elsewhere, the company announced its new Torch 9800 smartphone and the arrival of version 6 of the BlackBerry operating system.

Focal Points:

• The encryption method used by RIM to secure transmissions to and from BlackBerry devices was called into question by several nations this week. These concerns were voiced by governments concerned with preserving their national security and the preservation of conservative social requirements. RIM reports that the encryption keys installed on companies' BlackBerry Enterprise Servers (BES) are company specific and that there neither master keys nor backdoors can be employed to decipher messages.  In some cases, RIM is being required to install servers in these countries to prevent data from traversing their borders. Saudi Arabia has reportedly accepted this solution. RIM is also offering metadata regarding activity BlackBerry transmission types, but not the ability to view the transmissions themselves, in an attempt to appease complaints. India has been provided with this metadata option, though that country's Department of Telecommunications (DoT) is expected to ask RIM to provide an in-country server scenario. Saudi Arabia has reportedly halted BlackBerry services already, though that has not yet been confirmed, and the UAE is set to suspend BlackBerry services within its borders on Oct 11. Rumors regarding concessions already made to China and Russia are also swirling, though the vendor denies these unsubstantiated claims.
• Heralded by many as the best BlackBerry yet, RIM introduced its newest BlackBerry this week, the Torch 9800. The device is the first BlackBerry to feature a touchscreen and a dedicated keyboard, and features key upgrades including unified inbox functionality and a replacement for the much maligned BlackBerry Web browser. The new Webkit-derived browser, also underlies Apple Inc.'s Safari and Google Inc.'s Chrome, renders pages in a manner similar to traditional desktop browsers and is faster than its predecessor. Available on August 12 for $199 on contract with AT&T Inc., the Torch 9800 uses a lower-resolution screen and a slower processor than competitive devices based on the Apple iOS and Google Android platforms.
• Powering the Torch is the new BlackBerry OS 6. The updated operating system is the first from the smartphone manufacturer in close to a year, and brings the BlackBerry platform much closer to the capabilities found in key competitors' offerings.  Social networking integration, multimedia integration, and universal search capabilities are among the key upgrades found in the new operating system. Those familiar with earlier versions of the OS will feel at home with OS 6 as the company opted for an evolutionary rather than revolutionary approach. Aside from the Torch 9800, many older BlackBerries will be able to update their software to the latest version in the coming months.

Experton Group believes that rationales behind the recent batch of countries rallying for assistance with national security protections from RIM are multifaceted; part legitimate and part posturing. Regardless of impetuses, corporations should take these threats seriously as temporary shutdowns are likely while agreeable solutions are reached. On a permanent basis, Experton Group believes BlackBerry service will continue in these areas, though IT executives will need to work with and independent of RIM to see if changes still meet with enterprise security requirements. Assuming agreeable arrangements can be met in each of affected geographies, IT executives may have find that BlackBerry users visiting these areas may have limitations or outright prohibitions placed on activities occurring within country borders. No real actions or meaningful planning can be adopted until agreements are finalized; however, IT executives should plan on alterations affecting business operations.  While the BlackBerry Torch may lack some of the fun, speed, and pizzazz of its competitors, the Torch is best business-class smartphone available. Upgrades address the most disagreeable aspects of the outdated BlackBerry OS 5, and the new browser coupled with the enterprise-integration that is BlackBerry's mainstay should help the company keep its enterprise dominance.