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BlackBerry outage hits India hard - and opens door to competitors

An Indian pedestrian walks past a billboard for Blackberry phones in Mumbai on August 13, 2010.

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The technical collapse of Research in Motion Ltd.'s BlackBerry server has caused global grousing – and speculation about the impact on the long-term health of the faltering company.

But the damage may be greatest in India, a market where the BlackBerry remains the smartphone of choice and in which the company increased its smartphone market share by nearly 50 per cent between 2009-10.

Almost two-thirds of the global users of RIM's enterprise server are in India; the company has more than 1 million subscribers here, and a 15 per cent share of the smartphone market (the leader is Nokia India Pvt. Ltd., with 46 per cent).

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The service outage in India was one of the most severe of the global problems, and it seems to have had a comparatively greater crippling effect on business function here for a couple of reasons. First, employees are hugely dependent on their phones which are often their sole source of internet connectivity outside the office. Many workplaces do not allow employees to take corporate laptops home, and home WiFi connections fall victim to frequent power cuts in many cities. Many families have smartphones as their only internet access.

In addition, many Indian businesses are providing services for corporations in North America or Europe; the substantial time difference makes mobile connectivity crucially important for employees. Financial brokerages in Mumbai, in particular, have found the BlackBerry outage disruptive of their cross time zone work practices.

Smartphone sales in India are growing by an estimated 35 per cent a year; sales are expected to exceed 13 million units this year. In more bad news for RIM, this week and next mark the peak of annual retail purchases in India, leading up to the holiday of Diwali. Anecdotal evidence suggest smartphones are this year's wish-list topper for middle-class Indians.

Last year, BlackBerry increased its share of the Indian smartphone market to 13 per cent, up from eight per cent in 2009, according to data from Cyber Media Research.

In a bit of perhaps fortuitous timing for Microsoft Corp., the company on Wednesday launched its Windows phone platform in India, an operating system called Windows Phone 7.5, or, much catchier, Mango. The company is pairing with hardware producers such as Nokia, Samsung Electronics Co. Ltd. and HTC Inc., and hopes to take on Apple Inc.'s iPhone and Google's Android for a share of a very lucrative market in India.

Apple has put very little energy into developing a presence in India to date, but its products nevertheless have huge cachet. There is no word yet on when the new iPhone 4S will go on sale here, but the product now seems certain to find newly heightened interest in the Indian market.

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About the Author
Latin America Bureau Chief

Stephanie Nolen is the Latin America correspondent for The Globe and Mail.After years as a roving correspondent that included coverage of the wars in Iraq and Afghanistan, Stephanie moved to Johannesburg in 2003 to open a new bureau for The Globe, to report on what she believed was the world's biggest uncovered story, Africa's AIDS pandemic. More

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