Thursday, October 13, 2011

BlackBerry service restored after worst outage ever

On Monday, October 10, BlackBerry suffered, what they called, its largest-ever network disruption. The BlackBerry service's infrastructure suffered a hardware error and then the problem cascaded with a backup system not properly working, according to RIM's founder and co-CEO Mike Lazaridis. Research In Motion (RIM) is the company that produces the line of BlackBerry phones, tablets, etc. On Thursday, October 13, the BlackBerry service was restored but not without slight damage to the psyche of the company. While BlackBerry has had a whopping 40% growth in subscribers over the previous year, it's not a good moment to alienate them. With increasing competition from the growing popularity of Google's Android phones and the market-dominating iPhones from Apple, the room for mishaps in this arena is minimal. Competition is as fierce as it has ever been in the cellular phone market and this disruption gives consumers a seed of doubt that could end up harming BlackBerry.

The infrastructure being down could potentially change the consumer's perception of the product, which could bring a devestating change in demand for BlackBerry's. This "leftward" shift of demand creates an excess of supply, which would eventually force BlackBerry to lower their prices. The Substitution effect will take place as well with Andriods and iPhones stealing frustrated customers away from BlackBerry.

- Taylor E.


Molly Aaron said...

Coming from a Blackberry user as myself, it was frustrating to experience a crash like this. Regardless, my elasticity is no different than it was before. I love the phone and would never even concider switching to Iphone. As you said, though, competition is fierce and there really isn't any room for errors, especially with the new update with Iphone, which includes their new Imessaging, a setting exactly parallel to BBM. I just hope Blackberry comes back from the downfall with a big bang.

Taylor Epperson said...

In competitive economies, like the telephone economy,it is not uncommon for comapnies to borrow each other ideas in order to meeting the growing popularity of certain aspects. Some BlackBerry users may not be inelastic as yourself, which is where BlackBerry can get hurt by this outage. A lot of consumers use BlackBerry's for business purposes only and they cannot afford to be out of service for so long. With the trust in BlackBerry taking a huge hit, inelastic consumers will have to make the decision to stay with their current provider or switch to a more trsuted provider.