March 03, 2006

Blackberry Avoids Shutdown

As mentioned previously, business executives, road warriors and government officials alike were fearing the possibility of Research In Motion's Blackberry service coming to a premature closure, due to patent litigation with NTP. While the suit's judge had chastised both parties for failing to come to a settlement earlier in the process, RIM and NTP came to agreement today on a settlement that saw RIM pay NTP more than $600 million to avoid a shutdown.

And there was much rejoicing. Analyst firm Gartner and others had previously suggested corporations hold off on extending service contracts with the handheld e-mail device maker until legal issues were concluded, as many feared they would be cut off from constant communication. Not surprisingly, this too was impacting RIM's sales data - as in parallel to the settlement agreement, the company announced what would be a significant earnings shortfall of between $40 and $60 million.

With that nuisance out of the way, RIM shareholders applauded the move, sending the stock up nearly 20% after market close today, even with the earnings miss. But the millions of Blackberry users around the world are even happier, while Palm executives, hoping for some "Schadenfreude" themselves, wishing to benefit from their competition's downfall, will have to grow market share through product innovation instead.