Why the UAE ban is a golden opportunity for BlackBerry

August 6, 2010: 12:11 PM ET

More than one million users could find their cell services halted, but the ban could be just the PR boost RIM needs for its suffering reputation.

It's been a rough month for Research in Motion: its shares have tumbled, a study concluded that half of BlackBerry users plan to switch over to an iPhone or Android headset, and the BlackBerry 6 and BlackBerry Torch 9800 launch did little to sway critics who feel that RIM, which once defined the smart phone, is lagging behind competing devices in terms of hardware and software innovation.

Earlier this week, the UAE attempted to inflict another blow to RIM  (RIMM) with the announcement that it is planning to halt BlackBerry service to all users unless the company allowed access to encrypted user data. China, which just recently lifted restrictions on the sale of Wi-Fi-enabled iPhones, as well as Saudi Arabia, Lebanon, India and Algeria also stated they were discussing bans as well. The reason? Concern over illegal activity being conducted via BlackBerry communications.

Yesterday, Secretary of State Hillary Clinton stated the obvious, that authorities must balance "legitimate security concerns" with the "right of free use and access." But also on the line is the company's reputation. While some might argue this is another nail in RIM's coffin, the company could seize this as an opportunity to revitalize the brand if it plays its cards right.

Gary Singer, founder and CEO of the brand consultancy Buyology, believes this is a defining moment for BlackBerry, an opportunity that could go either way for the company. From a user's perspective, RIM hasn't done enough to set itself apart from competitors even with this week's product releases. Sticking to its guns during negotiations with government authorities could do just that.

"If RIM concedes, they've lost any hope of being distinctive," says Singer. "They will destroy the brand and appear to have a lack of scruples. If they don't 'blink,' they could stand to lose a reasonable amount of volume, but they would also be viewed as courageous."

Focus on security

From a corporate standpoint, one of BlackBerry's strengths has always been that it offers a level of security few other companies can match. It's also an asset the company failed to capitalize on when app-rich, feature-heavy mobile operating systems like Android and iOS entered the picture.

The company seems to have gotten the message. In light of the ban, RIM has emerged with guns blazing. CEO Mike Lazaridis remarked in an interview earlier this week that while BlackBerry's user data is usually encrypted, so is just about everything else on the Internet. Said Lazaridis: "This is not a BlackBerry-only issue. If [these countries] can't deal with the Internet, they should shut it off."

RIM's official statement was equally as staunch:

Any claims that we provide, or have ever provided, something unique to the government of one country that we have not offered to the governments of all countries, are unfounded. … RIM cannot accommodate any request for a copy of a customer's encryption key, since at no time does RIM, or any wireless network operator or any third party, ever possess a copy of the key.  This means that customers of the BlackBerry enterprise solution can maintain confidence in the integrity of the security architecture without fear of compromise.

The potential ban could also be an excellent jumping off point for the company's marketing strategy if it plays up its high-level security and reasserts its willingness to put user privacy ahead of the bottom line.

In doing so, RIM would finally be able to differentiate itself from the pack.

Join the Conversation
About This Author
JP Mangalindan
JP Mangalindan
Writer, Fortune

JP Mangalindan is a San Francisco-based writer at Fortune, covering Silicon Valley. Since joining in 2010, he has written on a wide array of topics, from the turnaround of eBay to the evolution of net neutrality. A graduate of Fordham University, Mangalindan has also written for GQ, Popular Science, and Entertainment Weekly.

Email JP
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.