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Blackberry makers feel heat from govt's

An Indian customer waits next to a Blackberry display at a shop in New Delhi.

TEXT OF STORY

Tess Vigeland: The makers of the Blackberry have been losing ground against Apple and Android in the battle to dominate the smartphone market. And now tehe company Research In Motion is also facing harsh criticism from governments about encryption on Blackberry devices. It's so good, the story goes, it represents a security threat.

Steve Henn tells us what began as a key selling point has morphed into the company's Achilles' heel.


Steve Henn: Research in Motion, the makers of Blackberry, were pioneers in the smartphone business long before smartphones were cool. Years before anyone imagined an iPhone or Google Android, lawyers in Washington were crack-berry addicts.

Charles Golvin: Also, Wall Street and the traders and other folks like that for whom, certainly, the security of their communications about trades and the like, crucial.

Charles Golvin is an analyst at Forrester Research. He says from the beginning, a key part of Blackberry's sales pitch was that its messages sent on its devices are safe.

Tyler Shields: Blackberry phones, in particular, have an end-to-end encryption solution built into them. A lot of your other phone manufacturers such as Apple or Google Android out of the box don't have that level of encryption of their data.

Tyler Shields is a security researcher for Veracode. He says Research in Motion even built its own data network to handle Blackberry traffic. And all this drives intelligence agencies around the world crazy. The United Arab Emirates tried to hack its way in. They offered Blackberry users there a patch that was, in fact, a piece of spyware. When that failed the UAE threatened to shut Blackberry out entirely.

This month RIM reached a deal there, and now India is demanding concessions too. But analyst Charles Golvin says any new deals could be dangerous for a company whose core business is built around the promise of absolutely secure communication.

Golvin: For them to wilt on it in any way, shape, or form is going to undermine that core.

Yet with hundred of millions of possible customers in India, reaching an agreement there has to be tempting.

In Silicon Valley, I'm Steve Henn for Marketplace.

About the author

Steve Henn was Marketplace’s technology and innovation reporter for the entire portfolio of Marketplace programs until December 2011.

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