BlackBerry stock slips on UAE security concerns
With the United Arab Emirates joining India in seeking access to BlackBerry's encryption key to let their intelligence agencies have access to emails, shares of Blackberry maker Research In Motion (RIM) fell for the second consecutive day on Tuesday on the Toronto Stock Exchange.india Updated: Jul 28, 2010 13:34 IST
With the United Arab Emirates (UAE) joining India in seeking access to BlackBerry's encryption key to let their intelligence agencies have access to emails, shares of Blackberry maker Research In Motion (RIM) fell for the second consecutive day on Tuesday on the Toronto Stock Exchange.
After slipping 1.8 percent on Monday, the RIM stock fell further by 3.55 percent to close at $55.15 on Tuesday. The Canadian wireless giant has reported 24 per cent rise in its revenue over the previous year, but its stock has sunk 30 percent this year.
Before the economic downturn, RIM shares once traded as high as $150.30 to plunge to $44.23 last year as the financial crisis gripped world markets.
Citing the BlackBerry as a social and security risk, the UAE authorities said over the weekend that RIM was operating outside its laws by sending data offshore for management by foreign commercial interests. Like India, the Gulf nation wants control over data transfer for security reasons. With Apple's iPhone 4 and Google Android devices already making major inroads into its market, UAE concerns have only added to RIM worries about erosion of its smart phone market share.
Though BlackBerry still controls 41 percent of the North American market, its share has dropped from 55 percent in 2009, with Apple gaining as much as much 22 percent of the smart phone market.
Just last week, Apple announced that more than 80 percent of the Fortune 100 companies are toying with the idea of opting for its iPhones, putting pressure on the BlackBerry maker and its stock. According to a survey by ChangeWave Research last month, the huge demand for iPhones is set to topple BlackBerry from its top slot in the North American market.
To check this onslaught, RIM is reaching beyond its core market of professionals and corporates to win over consumer and youth segments.
It has launched TV, Internet and poster ads to woo this segment by playing up its BlackBerry Messenger (BBM) - extremely popular among its professional and corporate clients.
More than 25 million of the total 46 million BlackBerry subscribers worldwide use BlackBerry Messenger.
According to RIM co-CEO Jim Balsillie, BlackBerry Messenger is so popular that its use has shot up nearly 500 percent during the fiscal year.
Later this year, RIM is also releasing its rumoured touchscreen phone with a sliding keyboard, a new Internet browser and a BlackBerry tablet to compete with Apple's iPad.