BUSINESS
10/17/2011 05:30 EDT | Updated 12/17/2011 05:12 EST

BlackBerry Apps: RIM Offers Customers $100 In Free Software After Outage

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MONTREAL - Research In Motion hasn't calculated the final price tag for last week's global BlackBerry email, text and Internet outage or how it will affect the company's earnings, co-chief executive Jim Balsillie said Monday.

Balsillie said the company also hasn't figured out the cost of offering 70 million consumer and corporate BlackBerry users $100 worth of free apps by way of an apology.

"Our focus has been on those offers," he said of the free apps and one month of free technical support for business users.

"People could estimate all kinds of things. We just don't know right now," Balsillie told The Canadian Press.

BMO Capital Markets analyst Tim Long has estimated that if RIM (TSX:RIM) were to compensate the carriers and customers for the down time it could cut three to five cents per share off RIM's earnings in the current quarter — a total of about $26 million.

The calculation is based on about 524 million RIM shares outstanding.

"While we believe the immediate financial impact from the outage is minimal, the risk to future service revenues, and maybe Blackberry shipments, has increased," Long said in a research note.

Balsillie said some of the apps being offered to customers would otherwise cost $5, $10 and $15 each.

"That's a lot of value. It's value to express appreciation. It's as good of a way as we can think of," he said.

Balsillie also said that wireless carriers have not yet asked him for compensation for the outage, which affected Europe, Africa, the Middle East and North America for varying lengths of time.

"So far, this hasn't been the first thing on the agenda."

But he said a small number of carriers have service agreements with RIM that would need some adjustment.

Scotia Capital analyst Gus Papageorgiou has predicted that RIM could take a US$182.3-million hit, or 22 cents per share, on its earnings if the company compensates carriers with one month of fees, and assuming that half of RIM's 70 million subscribers were affected.

BlackBerry has been losing market share, especially in the hyper-competitive North American market to Apple's iPhone and smartphones running Google's Android operating system.

Balsillie said RIM will consider releasing the number of users who have taken advantage of the free apps on BlackBerry App World when the program ends.

The olive branch that RIM extended to its customers wasn't yet complete, but the list provided with the announcement included iSpeech Translator, which converts words spoken or typed into the phone into multiple languages.

A variety of other popular games were also listed, including versions of the Sims, Bejeweled, Texas Hold'em Poker and Bubble Bash.

Technology analyst Troy Crandall said free apps may appeal to some consumers, but not necessarily to business users.

"On the enterprise side, the guy that's been mobile for three days with no email, I don't know if that $100 of free apps makes it up for him," said Crandall of Montreal-based MacDougall, MacDougall & MacTier.

It's more difficult to compensate business users with "free games and playthings," Crandall said.

He said he's not sure if BlackBerry users will be interested in all of RIM's offerings, but noted the pre-selected apps lower the costs for RIM because the rates that app developers would be paid would already have been negotiated.

"So it makes it a lot cheaper having the pre-negotiated apps available, rather than just giving a $100 credit to let people download whatever they want."

The apps will be made available over the coming weeks on BlackBerry App World and will continue to be available until Dec. 31.

Shares in Research In Motion closed down $1.36, or 5.6 per cent, at $22.90 on Monday on the Toronto Stock Exchange.