RIM: Does $100 App Credit Restore Confidence?

Stung by its three-day e-mail outage last week, BlackBerry developer Research in Motion announced a dozen free apps will be available to customers through Dec. 31.

RIM, whose 70 million customers experienced unprecedented interruptions due to a server problem, estimated the value of the downloads around $100 per customer.

We will work tirelessly to their confidence, said co-CEO Mike Lazaridis. We are taking immediate and aggressive steps to prevent something like this from happening again.

Perhaps more crucial for the Waterloo, Ontario-based company, enterprise customers will get a free month of technical support. The free apps are mainly games from Electronic Arts like Bejeweled and The Sims 3.

The announcement came on the eve of RIM's annual developer conference in San Francisco and as the company faces a challenge from activist shareholders to replace Lazaridis and co-CEO Jim Balsillie and become more competitive.

Victor Alboini, chairman of Jaguar Financial in Toronto, which is spearheading the challenging to RIM management, told IBTimes he had no comment on the move. Alboini now claims support from about 8 percent of RIM's shareholders and claims he will have more soon.

With a premier share of the corporate e-mail sector, RIM's announcement may appear to be inappropriate, resembling Sony's offer to PlayStation customers of two free games after a system failure earlier this year.

Still, said Peter Misek, analyst with Jefferies, An already frustrated user base is now questioning RIM's reliability. Misek estimates compensation costs for RIM may reach about $350 million, but relations with service providers like Vodafone, Verizon Communications and others may cause more damage.

A poll of BlackBerry users last week by Crackberry.com found about a quarter of RIM customers believed the outage to be unacceptable while 36 percent thought it was no big deal. The remainder were undecided.

The BlackBerry service woes began just before Apple began shipping the iPhone 4S, with Apple stores and service providers reporting long lines of customers last Friday.

Alboini, the RIM activist investor, is himself a devoted BlackBerry users but complained he can't keep his employees from buying iPhones.

RIM shares, battered last week, may trade down another 1.1 percent in early trading, according to early indications. The shares closed Friday at $23.97, down 58.8 percent this year