3 min read

Unless RIM buys me a pony I’m ditching my BlackBerry

With the first domino having fallen, Research in Motion is being hit-up by restrictive governments worldwide

The recent trials of one of Canada’s technology jewels, BlackBerry-maker Research in Motion, highlight both the differences of RIM’s model from its competitors and the challenges of doing business in a world where, while the network may be borderless, political borders remain.

While RIM competes with handset manufacturers such as Apple, HTC and Samsung, it has one significant difference from those companies that, until recently, was seen as an advantage: it’s also a service provider. I traded-in my Windows Mobile phone nearly two years ago for a shiny red BlackBerry Curve. With six months left on my contract, I expected to have to pay a little out of pocket. I didn’t, though, because in addition to the loyalty credit from Bell Mobility for signing a new contract, there was also a credit from Research in Motion for the BlackBerry Data Service.

And it’s this BlackBerry Data Service that has been causing RIM headaches lately. The service sees all BlackBerry e-mails, as well as BlackBerry Messenger traffic (you’ve probably seen the commercials lately) and web traffic routed through BlackBerry’s servers in Waterloo, Ont. It’s a system supposedly so secure, RIM has claimed they couldn’t read the traffic even if it wanted to.

This has caused issues for RIM recently in a number of markets with countries led by regimes with an interest in knowing what their citizens are up to. While they can force the local service provider to disclose the e-mail traffic or browsing history of an Apple iPhone user, with the BlackBerry it’s not as easy. Because of the BlackBerry Data Service, they need RIM to disclose the information.

In countries such as the United Arab Emirates, Saudi Arabia, and elsewhere in the Middle East, the security of this data service has made the BlackBerry a favourite of pro-democracy activists; and a thorn in the side of repressive governments. The first to act was the UAE, threatening to close the market to the BlackBerry unless RIM let it spy on the data service. As RIM signaled willingness to compromise, despite the backing of the U.S. and Canadian governments, sensing weakness the Saudis soon followed. Then India. And they won’t be the last. We don’t know the terms of agreements that have reportedly been reached with the Saudis and the UAE, but they would have to involve a compromise of the security of the entire model.

I do feel some sympathy for RIM here. The nature of their business model means it’s having to deal with issues competitors such as Apple don’t; they just drop the iPhones in a market and leave it to the carriers. With the pressures of stockholders to open new markets and grow revenues, losing access to lucrative emerging markets (while their competitors march on in) isn’t tenable for RIM. And many technology companies have been forced to consider similar compromises: look at Google, or any company that has tried to do business in China.

It’s worth asking, do we really expect our multinationals to be political activists, and put ethical considerations ahead of business? It’s easy to say no but, at the same time, whether it’s mining in Africa or sneaker production in Asia, we do expect our multinationals to adhere to certain ethical standards. And we should expect our IT companies not to give anti-democratic regimes the ability to spy on and repress their citizens.

RIM could have stood firm here, with the Canadian and U.S. governments in their corner. And even if they lost access to the UAE, they could have more than made up the business with increased share elsewhere from people impressed the company took a stand on principle. Instead, having decided to compromise once, RIM is finding the compromises won’t be ending there.

So, it’s come down to this. Either buy me a pony, Jim Balsillie, or I’ve getting an iPhone.

Follow Jeff Jedras on Twitter: @JeffJedrasCDN.