RIM scrambles to end global BlackBerry outage
Research In Motion, in a hastily announced conference call on Wednesday, vowed to eventually deliver all delayed email and instant messages to customers in five continents affected by the outage.It later told some of its corporate clients that it may not clear the huge backlog of messages until Thursday morning on the U.S. East Coast.The outage - and RIM’s sluggish communications with its customers - have fanned rising dissatisfaction with its co-chief executives, Mike Lazaridis and Jim Balsillie.Critics have called for a shake-up, saying the top managers have let the company fall too far behind Apple and other rivals in a rapidly changing market.”The board clearly needs to take decisive action now - they need to draw a line in the sand,” said Richard Levick, who runs a consultancy that specializes in crisis management.”RIM needs to change its DNA entirely - they need to start thinking like a startup again, instead of a former market leader,” he said.Though RIM’s stock dropped modestly on Wednesday, its shares have already tumbled more than 50 percent this year on a series of profit warnings and product missteps - a sharp reversal of fortune for a company that once dominated the smartphone market.This week’s disruption - the worst since an outage swept North America two years ago - may have damaged RIM’s once-sterling reputation for secure and reliable message delivery - perhaps its No. 1 selling feature.RIM is unique among handset makers, as it compresses and encrypts data before pushing it to BlackBerry devices via carrier networks. Apple and others rely on the carrier networks to handle all routing and delivery of content.Even before this week’s disruptions, many companies had started to balk at paying a premium to be locked into RIM’s service. Some are now allowing employees to use alternative smartphones, particularly Apple’s iPhone, for corporate mail, and the outage could accelerate the trend.”One possibility could be that it encourages client companies to look more at other options such as allowing users to connect their own devices to the corporate server and save themselves the cost of buying everyone a BlackBerry,” said Richard Windsor, global technology specialist at Nomura.DLA Piper, a law firm with 4,200 attorneys worldwide, is a prime example. It is accelerating discussions about switching to iPhones and Android devices, Don Jaycox, its chief information officer, said on Wednesday.”This has brought it to the front-burner,” Jaycox said. “It will cause more people to opt for other choices.”UNIQUE SYSTEMThe corporate defections are making a big software transition even more crucial to RIM. The company is getting ready to shift its line of BlackBerry smartphones to the new central operating system first used in the poorly received PlayBook tablet.Without a successful shift, RIM may never regain market share lost to the iPhone and devices powered by Google’s Android, analysts say.”It’s a blow upon a bruise. It comes at a bad time,” Nomura’s Windsor said, referring to Wednesday’s service disruption.While corporate customers were weighing their options, BlackBerry users were venting their frustration at the company and what they said was its failure to keep its customers informed.”Totally appalled at the lack of communication from RIM,” wrote Lynn Murdoch on RIM’s BlackBerry Facebook page. “Love my Berry, but furious at the fact that no one can actually give a time frame of how long its going to take to fix. Utterly disappointed!”“I’m right at the edge where I might be saying goodbye to my BlackBerry,” said Tony Vitali, a BlackBerry user in New York. “The device freezes twice a day. … It’s a very frustrating device.”BAD TIMINGFrom a marketing standpoint, the timing of the service glitch could hardly have been worse for RIM.Apple on Wednesday launched an major upgrade to its iOS operating system that includes iMessage, an instant messaging service for users of Apple’s iPhones, iPads and some iPods. It is a direct competitor to RIM’s BlackBerry Messenger, or BBM.The RIM service, which allows BlackBerry users to send free text messages to other BlackBerry users, has made the devices a popular choice with young consumers. That has partially compensated for its losses in the corporate market in North America and Western Europe.On Wednesday RIM’s shares closed down 3.46 percent at C$24.27 on the Toronto Stock Exchange and down 2.17 percent at $23.88 on the Nasdaq.
China official paper urges wider yuan trading band
The Journal, run by the Xinhua state news agency, said
instead that Beijing could help the yuan cope with
rising market speculation by widening its trading band.The paper noted that the yuan band now stands at plus or
minus 0.5 percent from the daily mid-point set by the central
bank. Other emerging markets typically start with trading bands
of 1.0 percent.”A widening of the yuan’s trading band would help change
market expectations for the yuan to rise,” the paper said. “That
would reduce the impact of speculative fund flows on China’s
economy and help the yuan to trade freely in markets in the
future.”But it noted that Beijing is unlikely to widen the yuan’s
trading band soon.Tensions between China and the United States ratcheted up a
notch this week after the U.S. Senate approved a controversial
bill aiming at pushing Beijing to let the yuan rise in a bid to
save American jobs.Many lawmakers have said that by preventing the yuan to
trade freely, China artificially keeps the value of its currency
low, thereby making its export products unfairly cheap in global
markets.Beijing has condemned the bill, which would allow U.S.
companies to seek countervailing tariffs on some Chinese goods,
calling it a “protectionist” move and one motivated by politics
rather than economics. In order to become law,
the bill would also need to be approved by the House of
Representatives and signed by President Barack Obama.The ongoing spat has led investors in the offshore yuan
market to trim bets for further gains in the currency, with some
going as far as to bet on declines. ?CNY/?But the newspaper argued that the yuan is unlikely to fall
sharply — despite investor bets — since it is supported by
China’s healthy economic growth.
Canon seeing no sales downturn, eyes year-end
“We had a global meeting last week, involving the sales heads from America, Europe and Asia,” Toshizo Tanaka said in an interview at the company’s Tokyo head office. “At that point, there were no pessimistic comments.”His remarks came days after rival Nikon told Reuters there was some evidence that dealers were putting off orders. Nikon is the world’s second-largest player in the profitable single-lens reflex camera market after Canon.Other consumer electronics makers including Sony and Panasonic have said they are facing an extremely tough environment going into the year-end, usually their most lucrative period, with consumer sentiment flagging amid concerns about debt and unemployment in Europe.Like other Japanese consumer electronics makers, Canon is being hurt by the strength of the yen against both dollar and euro, and Tanaka said he expected exchange rates to stay near current levels for some time.”I think rates may stay as they are for quite a while against both the euro and the dollar,” he said. “What is happening in Europe is not a cyclical downturn but structural, a financial crisis, so it will take a long time to recover.”The company had predicted exchange rates of 80 yen to the dollar and 115 yen to the euro for the second half of its financial year to December, compared with current levels of about 77 yen to the greenback and 106 yen to the euro.Each one yen rise in the yen versus the dollar is expected to cut operating profit by 4.8 billion yen and a one yen rise against the euro reduces operating profit by 3 billion yen over the July-December period.THAI SUSPENSIONSeparately, Tanaka said Canon was unsure whether the suspension of operations at its Thai inkjet printer factory would affect profits, adding that the company could make up some, but not all, production at a plant in Vietnam.Canon said it had closed a printer plant and a printer materials facility in Ayutthaya on October 6 and would be unable to operate them until at least Friday after the country was hit by its worst floods in 50 years.Canon declined to comment on the Ayutthaya plant’s capacity, but said last year it planned to hike it to 8 million units out of a planned global production capacity of 27 million units for 2011.The company is set to open another inkjet printer plant in northern Thailand within weeks.The camera and printer maker, which also competes with Hewlett-Packard and Xerox, will announce its July-September earnings on October 25.Analysts expect it to meet its forecast of a 380 billion yen ($4.95 billion) operating profit for the year to December as cost-cutting balances out the blow from exchange rates.Shares of Canon dropped 0.3 percent on Wednesday, roughly in line with the Nikkei average. The company’s share price has slipped just over 1 percent since the beginning of the financial year on April 1, compared with a 10 percent fall in the Nikkei.($1 = 76.700 Japanese Yen)
