Gartner's advice: Halt BlackBerry deployments

U.S. operations could be shut down soon, analyst firm warns. Best to wait "until RIM's legal position is clarified."
Written by Munir Kotadia, Contributor

Analyst firm Gartner has advised its clients to halt deployments of Research In Motion's BlackBerry e-mail devices because of a legal battle that could see a judge effectively shut down the company's U.S. operations.

Holding firm NTP contends that it owns patents for the technology that powers the popular PDAs. At stake is RIM's right to operate in the United States. According to Gartner, NTP has already won an injunction that would force RIM to "shut down its U.S. operations."

The research note advises enterprises to "stop or delay all mission-critical BlackBerry deployments and investments in the platform until RIM's legal position is clarified," because "U.S. BlackBerry users would lose messaging services...and international users would lose message service while traveling in the U.S."

However, Gartner expects the two companies to reach a settlement within three weeks because an agreement would be "in both companies' interests."

There is a possibility that RIM could bypass the patent dispute by deploying a workaround, but Gartner said this path could be "highly problematic."

"RIM claims its workaround is legally sound, but its history in the courts does not inspire confidence. Moreover, end-user validation and implementation would take time, resulting in a temporary loss of service," the research note said.

Gartner advises enterprises "not to sign any agreements that could involve them in the RIM-NTP dispute" and "demand that RIM discloses its workaround plans."

If RIM deployments are not mission-critical, Gartner said, enterprises could take no action for the moment but rather "assess the potential impact of operation outages of unknown duration."

"If you read it closely, we're telling people to sort of take a break here and wait until this case settles within two to three weeks," Gartner analyst Ken Dulaney told Reuters.

"We don't have any information from RIM on this workaround," Dulaney said. "There's no way to tell if it's legally OK. They say it is, but they've been wrong already on their cases a couple of times. They've misjudged NTP."

RIM shares hit a five-week low Wednesday. The company's stock on Nasdaq fell 1 percent, or US$0.44, to US$61.51. At one point, shares of the BlackBerry maker were trading at US$59.74, their lowest since Oct. 27.

One Toronto-based technology analyst suggested that the stock price decline is related to a growing awareness of the Gartner report. He also cited a report in Canada's National Post newspaper of NTP co-founder Don Stout saying his company had not held talks with RIM since June. Lawyers representing NTP declined to comment on the National Post story.

Munir Kotadia of ZDNet Australia reported from Sydney. Reuters contributed to this report.

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