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November 22, 2012

RIM Loses Out to iPhone — Again

Research In Motion (RIM), yet again, is being replaced by the iPhone.

The National Transportation Safety Board has issued a notice of intent saying it plans to “sole source” Verizon Wireless for an iPhone 5 deal.

“These Apple devices will replace the NTSB’s existing BlackBerry devices, which have been failing both at inopportune times and at an unacceptable rate,” the agency says in its decision.

“The NTSB requires effective, reliable and stable communication capabilities to carry-out its primary investigative mission and to ensure employee safety in remote locations.”

The NTSB, which uses Verizon as its carrier for its BlackBerry service, has an agreement to “refresh” its BlackBerry handsets on an 11-month cycle. Although Verizon has offered to replace broken BlackBerry phones, the government agency says it has lost faith with RIM’s range.

“Verizon Wireless, instead, is offering the NTSB a significant discount on the price of the iPhone 5 devices to account for the expenses incurred previously by the NTSB to purchase blackberry devices from Verizon Wireless,” the agency says.

The NTSB has indicated the iPhone is the best way to go because the agency already has iOS support, apps, and infrastructure set up, because it has already adopted iPads.

The NTSB is one of several BlackBerry users — both government and corporate — to make the switch.

The Immigration and Customs Enforcement agency (ICE) last month announced it was dropping Blackberry in favor of the iPhone.

The government agency said it would end its contract with RIM and shell out $2.1 million to buy iPhones for its more than 17,600 employees.

The ICE, who has had a contract with RIM for eight years, told Reuters the company “can no longer meet the mobile technology needs of the agency.”

The NTSB decision is really bad timing for RIM which is gearing up for it global launch of its new BlackBerry 10 devices Jan. 30.

The BlackBerry 10 may be the beleaguered Ontario company’s last chance at redemption. RIM’s devices dominated the market at one time, but have since fallen victim to Apple’s iPhone and devices powered by Google’s Android operating system. With a net loss of $235 million in the last quarter, RIM desperately needs its new Smartphones to be a success.

So far, BlackBerry 10 hype has been good for the company — that and recent positive comments by a major analyst had RIM shares rise to the double-digit range Nov. 20 for the first time since June.

Analyst Peter Jeffries of investment firm Jeffries & Co. said in a note the company has a 20 to 30 per cent chance of succeeding when it launches its BlackBerry 10 devices, a definite improvement from the 10 to 20 per cent chance of success he predicted earlier. Jeffries also upgraded the stock’s rating from “underperform” to “hold.”

RIM earlier this month announced it had secured a key U.S. government security clearance, paving the way the BlackBerry 10 to be the device of choice for the feds.

RIM said its BlackBerry 10 received it U.S. Federal Information Processing Standard (FIPS) certification. Translation: the devices can be used to send classified data between government employees.

RIM’s one seeming advantage over the competition, however — top-notch security — may not be enough if agencies continue to experience problems with the products.

Details about BlackBerry 10 can be found here.