BlackBerry Woes Continue as Trade-Ins Surge (NewsFactor)

A tough spell for Canada-based Research In Motion continued this week, as a Web site that buys used phones reported a surge in BlackBerry devices entering the market.

The surge coincided with the release of Apple's iPhone 4S earlier this month on three of the top four carriers: Verizon Wireless, AT&T and Sprint, all of whom also sell BlackBerry smartphones.

Record Spike

The site, Gazelle, told Forbes.com that users dumping their BlackBerrys reached a record high this month, with an additional 80 percent spike last week. That follows a three-day outage of RIM's data services that prevented some users from accessing BlackBerry Messenger service (BBM) and the Internet Oct. 11-14.

Initially in Europe, the Middle East and Africa, the problem later spread to Asia and South America, then to North America. Some disgruntled users this week reportedly filed a class-action suit in Quebec Superior Court because of the outage, seeking refunds and damages, unsatisfied with the company's offer of free tech support and premium apps as amends.

The Gazelle trade-ins coincided not only with the release of the iPhone but the launch of several premium Android-based phones. But Gazelle official Anthony Scarsella told CNET that Android trade-ins during the same period were almost as high, 72 percent, and that the glut of surplus BlackBerry devices was likely due to the iPhone launch.

The report did not mention the quantity of BlackBerrys sold this month and Gazelle did not provide the information requested in time for publication.

One soon-to-be-former BlackBerry user is Jerry Richter, a New York City public school teacher, who is switching his Verizon service from the Tour device he's had for nearly three years to the iPhone 4S he has ordered and expects to receive this week.

"I have an iPad, and since the iPad and iPhone are so similar, it's more seamless for me to transition from one device to the other," said Richter, 51. "I'm excited about the Apple technology and the ability to get apps that you can't get with BlackBerry, as well as FaceTime [video chat]."

Cautionary Tale

Rob Enderle, principal analyst at Enderle Group, said RIM's predicament "showcases what can happen when you lose your connection to your customer and scare them away from your product."

He said brand loyalty in an age of ever-changing gadget tastes can be fleeting, at best. Just five years ago, BlackBerry was the status phone for people on the go who needed constant access to messages.

"Consumers are very flighty and only Apple has been able to hold them for an entire decade [including iPod sales], largely as a result of Steve Jobs' unique focus on the market and also his unique personal interest in Apple's products. Both departed Apple when Steve died and RIM -- and Palm before them -- are both cautionary tales of what can happen if you lose your connection to your customers."

Apple was able to recover from mistakes made during Jobs' absence from 1985 to 1996, Enderle said. "Today's star is tomorrow's bum and Commodore, Atari, Palm, Motorola, Nokia, Netscape and now RIM are all examples of what can happen if you, for even a moment, lose track of how important maintaining customer loyalty is."

Source: http://us.rd.yahoo.com/dailynews/rss/internet/*http%3A//news.yahoo.com/s/nf/20111027/tc_nf/80780

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