It's Too Late, Research In Motion


It seems as if Research In Motion (NAS: RIMM) is taking the same customer-friendly approach to last week's service outage as a restaurant manager dealing with patrons who have been waiting too long for a table: Keep them quiet by feeding them free apps.

Fellow Fool Evan Niu went over the "I'm sorry" package yesterday, but it's basically a $100 bundle of free downloads, including Electronic Arts' (NAS: ERTS) Sims 3.

In terms of historical apologies, this isn't quite on the scale of Kobe Bryant's $4 million diamond ring for his wife after his ill-advised tryst, but it's better than a slick Don Draper denial.

Free downloads have been the apology of choice lately. Sony (NYS: SNE) offered up premium downloads after its PlayStation network was hacked earlier this year. Early Nintendo (OTC: NTDOY) 3DS owners got 20 free digital games after a quick-trigger price cut.

Downloads are easy gifts. They can be redeemed immediately. Digital goodies are cheaper to deliver than physical goods. Developers also likely give the gifting companies great rates for the shot at wide audience penetration.

However, this doesn't mean that this is worth $100 to any of RIM's frustrated BlackBerry owners. Unless someone was bent on buying all 12 apps, this is not a $100 gift.

It probably doesn't matter, since we all know that RIM is a dead smartphone maker walking.

Sure, it has 70 million BlackBerry accounts. However, revenue and earnings staged larger than expected declines in its latest quarter. Apple (NAS: AAPL) and Google (NAS: GOOG) continue to run away with this market.

If corporate IT departments are hesitant to relinquish BlackBerry control to iOS or Android, nerd darling Microsoft (NAS: MSFT) is likely to come on strong in the coming quarters to woo the corporate customers that RIM has feasted on for years.

In the end, the apology and the parting gifts are irrelevant. Even if RIM were giving away free PlayBook tablets -- and don't go getting any ideas, RIM -- it wouldn't undo the damage and the lousy timing of last week's wide-reaching outage. The event simply validates the reasons for BlackBerry owners to bail when their contracts run out.

Free apps or not, these stomachs are still grumbling.

If you want to see how the smartphone battle plays out, follow the relevant companies by addingGoogle, Research In Motion, andAppleto My Watchlist.

At the time thisarticle was published The Motley Fool owns shares of Apple, Microsoft, and Google. Motley Fool newsletter services have recommended buying shares of Apple, Microsoft, Google, and Nintendo. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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