It's Too Late, Research In Motion

It seems as if Research In Motion (Nasdaq: RIMM  ) is taking the same customer-friendly approach to last week's service outage as a restaurant manager dealing with patrons who have been waiting too long for a table: Keep them quiet by feeding them free apps.

Fellow Fool Evan Niu went over the "I'm sorry" package yesterday, but it's basically a $100 bundle of free downloads, including Electronic Arts' (Nasdaq: ERTS  ) Sims 3.

In terms of historical apologies, this isn't quite on the scale of Kobe Bryant's $4 million diamond ring for his wife after his ill-advised tryst, but it's better than a slick Don Draper denial.

Free downloads have been the apology of choice lately. Sony (NYSE: SNE  ) offered up premium downloads after its PlayStation network was hacked earlier this year. Early Nintendo (OTC: NTDOY) 3DS owners got 20 free digital games after a quick-trigger price cut.

Downloads are easy gifts. They can be redeemed immediately. Digital goodies are cheaper to deliver than physical goods. Developers also likely give the gifting companies great rates for the shot at wide audience penetration.

However, this doesn't mean that this is worth $100 to any of RIM's frustrated BlackBerry owners. Unless someone was bent on buying all 12 apps, this is not a $100 gift.

It probably doesn't matter, since we all know that RIM is a dead smartphone maker walking.

Sure, it has 70 million BlackBerry accounts. However, revenue and earnings staged larger than expected declines in its latest quarter. Apple (Nasdaq: AAPL  ) and Google (Nasdaq: GOOG  ) continue to run away with this market.

If corporate IT departments are hesitant to relinquish BlackBerry control to iOS or Android, nerd darling Microsoft (Nasdaq: MSFT  ) is likely to come on strong in the coming quarters to woo the corporate customers that RIM has feasted on for years.

In the end, the apology and the parting gifts are irrelevant. Even if RIM were giving away free PlayBook tablets -- and don't go getting any ideas, RIM -- it wouldn't undo the damage and the lousy timing of last week's wide-reaching outage. The event simply validates the reasons for BlackBerry owners to bail when their contracts run out.

Free apps or not, these stomachs are still grumbling.  

If you want to see how the smartphone battle plays out, follow the relevant companies by adding Google, Research In Motion, and Apple to My Watchlist.

The Motley Fool owns shares of Apple, Microsoft, and Google. Motley Fool newsletter services have recommended buying shares of Apple, Microsoft, Google, and Nintendo. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


Read/Post Comments (3) | Recommend This Article (2)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 18, 2011, at 1:58 PM, powerphrase wrote:

    never too late? as long as 70+ million crackberry addicts out there. go rimm go, haters will hate paid analysts will come with negative propaganda, who cares!

  • Report this Comment On October 19, 2011, at 1:39 AM, krista54 wrote:

    Although RIM is still sitting in a comfortable spot being the business leader in the mobile sector it is clear they are feeling the heat. The other day several of my colleagues who were crackberry addicts started to show emotional signs of embarrassment of having one. Think about that! Not too long ago most who had blackberry's were revered as those who are on the up-and-up. Now today, even the business community is shifting allegiances towards everything and anything iPhone/iPad and to a lesser extent even Android. How times have changed.

    Krista - http://www.freetradesbabe.com/

  • Report this Comment On October 23, 2011, at 8:17 PM, Ipadhata4life wrote:

    RIM doesn't have squat to worry about... Really, what can the stupid little iPad do? Can it run an unmanned tank? LOL!

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