Financial Institutions Look for Alternatives to the BlackBerry

By Ed Silverstein November 05, 2010

Shares in Research In Motion dropped more than 3 percent on Friday morning as investors suspected the BlackBerry’s stranglehold on corporate communications was being eroded by rival devices, Reuters reported.

Reuters said that Bank of America and Citigroup have joined a growing group of financial institutions looking for alternatives to RIM’s BlackBerry for corporate e-mail.

The banks are testing software designed to make Apple's iPhones secure enough for company messages, Bloomberg News said, citing unnamed sources.

BlackBerry smartphones have been preferred by many bankers, politicians and executives who need secure access to e-mail and the Internet when outside of their office.

But popularity of consumer-oriented smartphones such as the iPhone and devices running on Google's Android software, coupled with moves to boost security, are putting pressure on RIM's dominance in the corporate sector, Reuters said.

Allowing employees to access corporate email on personal devices also saves companies the cost of supplying a BlackBerry. In a September survey, Bernstein Research found 83 percent of U.S. businesses allow employees to use non-BlackBerry alternatives to access corporate email.

On Thursday, PC maker Dell said it was moving 25,000 BlackBerry-wielding employees over to its own line of smartphones. Dell said the move will save money, but RIM disputed that, citing the cost of buying, deploying and supporting new devices.

"We find it highly unlikely that they will actually save any money with this move and far more likely they were looking for a little free publicity," Mark Guibert, RIM's senior vice president of corporate marketing, said in an e-mailed statement.

BlackBerry smartphones are more efficient with data usage, which means that their monthly service charges will also likely increase after switching from BlackBerry, Guibert said.

The move by Bank of America and Citigroup follows the lead of JPMorgan Chase & Co., and UBS, which said in September they were considering allowing employees to use iPhones or other alternatives to the standard-issue BlackBerry.

British bank Standard Chartered already gives employees the choice to use iPhones.

Bank of America has around 290,000 employees, while Citi employs some 258,000.

But RIM defends its products.

"We believe the opportunities for both corporate-issued and employee-purchased smartphones are growing and that RIM provides the best overall platform for CIOs (chief information officers) to address both scenarios without compromising security or manageability," RIM's senior vice-president for enterprise and platform marketing, Jeff McDowell, told Reuters.

Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf

TechZone360 Contributor

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