October 26, 2011 10:07 pm

RIM drops on delay of software upgrade

Shares in Research in Motion fell again on Wednesday after the Canadian maker of the BlackBerry family of smartphones and the PlayBook tablet admitted once again that it has delayed a key software upgrade.

The company revealed that the new PlayBook software designed to add key applications including built-in email, calendar and contact applications that were missing when the tablet launched in April, would not now be available until February, months behind schedule. It added that even then, the new software will still lack support for the company’s popular BBM messenger service.

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Shares of RIM dropped more than 6 per cent to $20.94 in early trading as investors reacted to the latest in a string of disappointing announcements and management mis-steps, as RIM struggles to staunch the loss of smartphone customers in the US and shore up its PC tablet offering in a market dominated by Apple’s iPad.

The latest delay suggests that RIM is continuing to struggle with the QNX operating system that powers the PlayBook and which it plans to use in an modified form, BBX, to power its next generation of BlackBerry smartphones.

Some analysts believe RIM might be struggling with its attempts to get the PlayBook’s QNX operating system to link with its secure servers and data centres, which push email and other data to users via mobile carrier networks.

When RIM launched the PlayBook it was widely criticised for failing to include email and other key applications that users of Apple’s iPad and other PC tablets have come to expect. RIM’s management initially promised that these and other features would be added within 60 days.

It later pushed that deadline back to the summer, then to October after its developers conference, which was held last week. It announced the latest delay in its official blog.

The latest setback comes just two few weeks after tens of millions of BlackBerry users suffered service interruptions when a key switch in the company’s UK data centre failed. RIM’s response to the service problems have been widely criticised by its users, some of whom are demanding compensation. So far RIM has offered users up to $100 of free BlackBerry apps in an effort to restore confidence in the company and its brand.

The service disruption was a serious blow to RIM’s reputation for reliability at time when some of its core business customers are beginning to follow consumers and abandon their BlackBerrys in favour of Apple’s iPhone or smartphones powered by Google’s Android operating system.

“Following prior product and software delays and the recent outage, this represents another execution stumble,” Mike Abramsky of RBC Capital Markets, wrote in a note to clients.

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