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NTSB Discontinues BlackBerry, But RIM CEO Optimistic

NTSB Discontinues BlackBerry, But RIM CEO Optimistic
November 21, 2012 1:54PM

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Analyst Peter Misek said he was "surprised by the strongly positive initial feedback on BB10 from carriers." He had expected a "more muted response" to RIM's coming BlackBerry OS, considering BB10 is "two years late and RIM's market share has plunged." The reason could be that carriers prefer not to be locked into the Apple-Android duopoly.

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Struggling smartphone maker Research In Motion has received some highly visible bad news. The U.S. National Transportation Safety Board has decided to discontinue using BlackBerry smartphones in favor of Apple's iPhone 5.

In a document posted last week on a federal Web site, the NTSB said BlackBerry phones have been "failing both at inopportune times and at an unacceptable rate." The agency investigates plane and other kinds of transportation accidents, and noted that it needs "effective, reliable and stable communication capabilities" to carry out its mission and ensure employee safety in remote locations.

'Surprisingly Positive'

Ontario-based RIM said it has a million governmental customers in North America, and the company expects at least 400,000 of those to transition to its new BlackBerry 10 devices, which are scheduled for release early next year.

But the news is not entirely bleak for RIM. The investment group Jefferies & Co. has raised the stock's rating to hold, following a report on Tuesday by one of its analysts, Peter Misek, who said that RIM might be able to avoid what he called "a worst-case scenario."

Misek said he was "surprised by the strongly positive initial feedback on BB10 from carriers." He had expected a "more muted response," considering that BB10 is "two years late and RIM's market share has plunged from 20 percent to 5 percent." The reason, Misek said, could be that carriers prefer not to be locked into the "long-term smartphone OS duopoly" of Apple and Android.

Meanwhile, RIM CEO Thorsten Heins has been talking up the company's makeover and strengths. The makeover includes a streamlined management structure designed for faster decision making, as well as a new team of top executives.

FIPS Certification

The strengths include the fact that RIM owns the largest private, global data network, whose security can appeal to IT departments nervous about that aspect of mobile technology. Additionally, Heins has been promoting the idea of the smartphone as a replacement for the computer, with only a keyboard, mouse and screen needed to complete the setup for the typical worker within a few years.

Also, RIM announced earlier this month that BB10 had received FIPS (Federal Information Processing Standard Publication) 140-2 certification from the National Institute of Standards and Technology, a security credential confirming a certified encryption technique.

This marks the first time a RIM product has been FIPS-certified prior to its release, and it means that U.S. government agencies can start to use the devices as soon as they are on the market.

Additionally, RIM added 2 million subscribers between the first quarter of 2012 and its San Jose, Calif., BlackBerry Jam event, held in September.

And, while the Jan. 30 launch of BB10 represents a delayed start to that much-awaited new platform and lineup of products, and although it misses both the holiday season and the Consumer Electronics Show in January, Heins has taken an upbeat view. He has said that the date allows RIM to avoid the crowded schedule of product releases during the holidays and CES.

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