Is Obama bailing out the BlackBerry?

The federal government remains a loyal customer for Research In Motion even as everyone else jumps ship.

By Kim Peterson Apr 5, 2012 3:32PM
Image: Washington, D.C. (© Bilderbuch/Design Pics/Corbis)The federal government and bureaucracy go hand in hand. Change does not come easy there -- and Research In Motion (RIMM) is grateful for it.

The company's BlackBerry devices get bashed daily. People are leaving in droves for phones running on systems from Apple (AAPL) and Google (GOOG).

But not the feds. At the center of our government, where "time stands still," half a million federal employees still use the BlackBerry, The Washington Post reports. That number has stayed stable over the years despite all the problems with BlackBerry maker Research In Motion.

Even President Obama still has one.

Officials give several reasons for sticking with the BlackBerry, the Post reports. The phone is secure. The tech guys know how to fix them. And RIM gave the government good deals through years-long contracts.

So maybe in its own, glacier-like way, the federal government is giving the BlackBerry a bailout.

The Canadian company's share of the U.S. market is plummeting. At the end of February, only 13.4% of smartphone subscribers used a BlackBerry. That's down 3.2% just since November, according to comScore.

One analyst predicts RIM will go out of business in the following video.

Post continues below.
At this rate, we could see RIM down to precarious levels soon. Already some analysts are talking about the company possibly going bankrupt.

But at least RIM has the U.S. government to fall back on. And as government spending continues to be a hot-button political issue, any overhaul of employee mobile phone usage is doomed.

Uncle Sam will be there for you, RIM, right to the very end.

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175Comments
Apr 5, 2012 9:26PM
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All the posters who think RIM is receiving a bailout need to read the whole article. \

 Gene Munster and anyone else who says RIM is headed to or near bankruptcy needs to bring up some of RIM's financial sheets.  Even with declining BB sales, RIM is still very much profitable and averaging about 16 billion in yearly sales.  Sales, paired with 0 long term debt and about 75 million subscribers, should be an indication that the company is no where near bankruptcy. 

Not mentioned in this, or many articles is the fact that Blackberry outsells the Iphone in many parts of the world, notably at a ratio of about 3:1 in the Middle East/Africa, and about 5:1 in Latin America. Interesting enough, Munster quickly dismisses other manufacturers like Nokia, the leader in mobile phone shipments (smartphones and feature phones). 

Apple is a great company and sells a great product, but balanced journalism would be a refreshing change of pace. 
Apr 5, 2012 10:31PM
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A lot of people really don't read these articles before they post, do they?

 

As Charlie Brown would say, "Sigh...."

 

Apr 5, 2012 10:54PM
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People must really not read the articles. The author is suggesting that the fed's contract with RIM almost is as if the fed is bailing out RIM - as in, its the only large client keeping RIM afloat. Please read the articles before you post. It has nothing to even do with Obama. Sure he has one, as the article mentioned, but I am sure the fed had this contract for MANY years.

 

Oh and what an AWFUL title to this article. The author should have their head examined.

Apr 5, 2012 8:58PM
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This is such a total BS article, it's pathetic. How is the USE of a product a "Bailout"? How is The President doing something wrong by using the most secure mobile device available. How is RIM about to go Bankrupt. Yes, the USA is all about Apple and Android, but the REST of the entire world is still buying Blackberry. 

Why would someone BLAME The President for something that he didn't even do? There's been no "Bailout" here, and yet we have all of these comments that are already taking him to task for doing it. You guys are insane. I guess the goal here was to write a hit piece to go after TWO big things and see which one you can take down the fastest. Total, pure crap. 

Kim Peterson should be ashamed of herself, as should every single person who has SLAMMED the president for doing something that he DIDN'T do. Pathetic. 
Apr 6, 2012 9:19AM
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Why is being a customer for many years called a bail out?
Apr 6, 2012 1:12AM
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It is BlackBerrys security that makes it popular with our government. Just look at all the hacking concerns with the other handset companies. The people that have been hacked are seen the next day carrying a BlackBerry. You can keep your iPhone and Android phones. I will stay with my BlackBerry and stay safe and secure.
Apr 6, 2012 10:19AM
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read the article..we are not "bailing out" blackberry. It is saying the feds are still using the blackberry heavily while other companies and smart phone users are ditching them for newer technology (like the iphone), therefore "bailiing" RIM out from basically being nonexistent! Poor terminology by the writer or just some of you dont know how to comprehend what you read.
Apr 6, 2012 8:03AM
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Well this was one of the most misleading titles ever
Apr 5, 2012 5:10PM
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I have a Blackberry, I had an I-phone before that.  The I-phone is a great toy, the Blackberry is a better business tool.  For my use, the longer Blackberry remains on the market, the better.
Apr 5, 2012 4:16PM
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Is he going to tell the Supreme Court that he's going to support a law where everyone has to buy one ?  Well, 50% of the people will have to buy one for themselves and then buy one for someone else who either does not have the money, a job that doesn't have "phone" benefits, or someone that is owed one.
Apr 5, 2012 9:28PM
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Do you think the Government would bail me out?
Apr 6, 2012 4:55AM
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Some people are really stupid. There is no bailout for RIM. Read the whole article before you post anything.
Apr 6, 2012 11:14AM
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Let me get this straight...the US government uses the most secure mobile platform currently available...and the headline implies Obama is "bailing out" RIM? MSN should be ashamed.
Apr 6, 2012 11:31AM
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This is a disgustingly misleading headline specifically meant to draw partisan ire. 
Apr 6, 2012 12:40PM
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NO BAILING OUT BUSINESSES. BAIL OUT THE AMERICAN TAX PAYER, IF YOU WANT TO HELP THE COUNTRY. LOWER OUR TAXES TO FLAT 10% AND MAKE EVERYTHING AND EVERYONE PAY. NO EXCEPTIONS, NO BAIL OUTS, NO TAX SHELTERS.
Apr 6, 2012 10:54AM
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People really don't get "security".  Who cares if Blackberry fails?  Unless you want your IRS info secure, your banking info secure, your credit card info secure, your medical records secure.

As a healthcare provider I have to be sure that your records are safe from prying eyes.

I know that Apple's browser has been cracked by Google, Android phones are about as secure as screendoors.

This Really has nothing to do with propping up a company as much as working within a secure environment. 

I don't think most people look into an issue like this before throwing out their opinion.

Apr 6, 2012 9:05AM
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I am still waiting for the Headlines to read: "Government Bails Out Struggling Americans". 
Now that is the American way. Holding breath Confused
Apr 6, 2012 8:29AM
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You stock analysts are idiots when it comes to technology. You aren't in the IT department for a reason. The fact that you can make boobs giggle on an Iphone isn't a good reason for the government and the president to use it. I hardly think the secret service should be using a communication system that you can buy at the mall.
Apr 5, 2012 8:51PM
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Blackberry is Canadi****xander Graham Bell was Canadian, and all the oil in the sands of
Alberta is Canadian, yet it seems most of you want to believe the US and/or Obama has some kind of control here.  The reason the US Government uses Blackberry is it was the best of cutting edge technology, and has a much more secure operating system.

Myself, I don't particularly think that Government employees need a communication system to play 'Angry Birds' and access the latest scores in a sporting event.

Apr 5, 2012 4:27PM
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I can confirm one of the biggest reasons BB is still used by the gov't and big business is due to it's security.  Hands down BB has the best security.   However, once Apple or Google figure out the security part (or some third party vendor) BB will become irrelevent.
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