The growth of Research in Motion, makers of the popular Blackberry Smartphone, is under threat after Saudi Arabia, the UAE and potentially India and Lebanon move to switch the Canadian company’s email services off in their countries.
Yesterday Telstra started warning Australian’s travellers to the Middle East that the Blackberry phones will be voice call enabled but devoid of email messaging due to the ban.
RIM is facing increased pressure to open its smartphones to government scrutiny. U.S. Secretary of State, Hillary Clinton, said yesterday that the United States will hold talks with the UAE and other countries on the issue.
Saudi Arabia said it would ban the BlackBerry Messenger function as of today.
RIM has said its technology will not allow a third party to monitor communications running through the BlackBerry’s enterprise servers. Co-CEO Michael Lazaridis, in an interview with the Wall Street Journal, accused governments of picking on smartphones to score political points.
Shares of RIM fell 2 per cent on the Nasdaq and Toronto stock exchanges overnight.
Reuters said that RIM is in an unusual position of having to deal with government requests to monitor its clients because it is the only smartphone maker that manages the traffic of messages sent using its equipment.
While the Middle East is a small market for RIM, the company believes that the ban could damage the brand and sales of their Blackberry phone.
“The company has to stand its ground, failing to do so, they’re built their brand and they’ve built their loyalty largely around security,” said Nick Agostino, analyst at Mackie Research Capital.