Blackberry outage, make or break for RIM?

As many of us know Blackberry service was interrupted this past week worldwide. Does this mean RIM is doomed? No, it does not. RIM relies on the BIS servers to function, these are RIM owned and operated. They are worldwide, and use a lot of capital every year to maintain.

When a switch in a system this size fails it causes a major backlog, which will cause a bottleneck in the system. This bottleneck cause things to function slower than normal, think of it like taking a hose and putting a kink in it. The water flows out at a lot slower rate than it did before flow was restricted.


So, what happened with the outage? Well, RIM had a switch fail in the middle east, and the back-up failed to work. This caused a major backlog, to which RIM reacted to in a timely manner. The backlog grew, like a bag full of water. To alleviate the backlog RIM had to slow traffic in other parts of the world.

Because of the size of the RIM network this outage is felt on a much larger scale than if your carrier were to have an outage. RIM has more users worldwide than any US carrier. The outage that occurred this past week is not enough for me to “jump ship”. RIM still has the most secure, most reliable Operating System on any phone hands down. BlackBerry Internet Service (BIS) is available in 91 countries worldwide on over 500 mobile service operators.

The following graph shows RIMS year over year growth. This is not a failing company, but a company that is still growing and still profitable. And, with the BBX platform coming out early next year, I see RIM being back on the “top of the heap” once again.

RIM’s Growth in US Dollars:

Year Sales

Operating Income

Net Income

2002 294,000,000

  (58,000,000)

  (28,000,000)

2003 307,000,000

(64,000,000)

(149,000,000)

2004 595,000,000

78,000,000

52,000,000

2005 1,350,000,000

386,000,000

206,000,000

2006 2,066,000,000

617,000,000

375,000,000

2007 3,037,000,000

807,000,000

632,000,000

2008 6,009,000,000

  1,731,000,000

  1,294,000,000

2009 11,065,000,000

2,722,000,000

1,893,000,000

2010 14,953,000,000

3,507,000,000

2,457,000,000

2011 19,907,000,000

4,639,000,000

3,444,000,000

Don Berzley

Co-Founder of OSBB. BlackBerry 10 app developer. Father of a son with Cystic Fibrosis.


Follow Me On Twitter - @BlkScorp33

Check Out My Apps - BlackBerry World

Help Find A Cure For Cystic Fibrosis!

Website: www.teamlorenzo.wordpress.com

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