BlackBerry stock loses $ 2.7 bn as Indonesia joins ban demand
Problems continued to mount for BlackBerry maker Research In Motion as its stock sank more than 4 percent further.
Toronto: Problems continued to mount for BlackBerry maker Research In Motion (RIM) Wednesday as its stock sank more than four percent further after dropping by a similar margin Tuesday.
With the new BlackBerry Torch 9800 not getting a great response and Indonesia joining the UAE and Saudi Arabia to seek a ban on BlackBerry, RIM shares were hammered on the markets, losing $ 2.7 billion in just two days.
With Goldman Sachs making "sell" recommendation on it, RIM stock sank 4.46 percent Wednesday to close at $ 54.24. The stock has fallen more than 20 percent in 2010 as it Apple's iPhone 4 and Google Android have made a major dent into BlackBerry market in North America.
With its current business of worth $ 15 billion globally, BlackBerry has more than 41 million subscribers in over 150 countries.
Unlike iPhone 4 or other smart phones, BlackBerry emails don't go over the internet. They are first encrypted to be secured on the device and then routed through its own secure servers which cannot be accessed even by RIM. But the foolproof security feature which made BlackBerry the smart phone of choice for corporates, businesses, professionals and governments, has now become its major headache.
Indonesia joined India, the UAE, Saudi Arabia Wednesday to seek access to data on BlackBerry devices which is routed through RIM servers. With about 1.2 million BlackBerry users, it wants RIM to install a local mini server so that the data is routed locally, not through RIM servers abroad.
But amid mounting pressures from foreign governments, RIM repeated Wednesday that it won't compromise on its security features.
In a statement, the wireless giant said, "The BlackBerry enterprise solution was designed to preclude RIM or any third party, from reading encrypted information under any circumstances, since RIM does not store or have access to the encrypted data.
"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."
But there was even more worrying news for RIM from the US where Google Android smart phones have outsold BlackBerry in the second quarter of 2010.
The US market research firm NPD Group says Android devices accounted for 33 percent, BlackBerry 28 percent and iPhone 22 percent of all handsets sold in the US in the second quarter of the current year.