• by Mark Walsh  @markfwal, August 2, 2010

The United Arab Emirates' decision to block use of email, IM and Web services on BlackBerry phones for security reasons could herald a broader ban of the device in the region. Saudi Arabia is expected to follow suit, and India has also taken issue with how the BlackBerry operates -- using encryption technology that makes it hard to monitor messages and routing emails through Canadian servers.

Electronista points out that the plan to block BlackBerry services would not only discourage outsiders from doing business in the region, but could open the door to higher sales of iPhones and Android-based devices in the UAE and Saudi Arabia.

With an estimated 500,000 to 1 million BlackBerry users, the two Gulf states make up a relatively small market for RIM. Still, the company won't want to lose those users or see the ban spread to other countries as it battles Apple and Google in the smartphone wars. Research firm Canalys reported Monday that shipments of Android phones worldwide jumped 886% in the second quarter compared to a year ago, while RIM shipments grew 41%. RIM is expected to unveil tomorrow the BlackBerry 9800, its answer to the iPhone 4, equipped with a touchscreen and a slide-out keyboard.

According to the Wall Street Journal, the BlackBerry crackdown is the latest episode in a long-running dispute between the UAE and RIM over how the country handles electronic security. "Last year, RIM notified BlackBerry users in the nation that an application Etisalat [the name for Emirates Telecommunications] had told its clients was a technical upgrade was actually spyware," the article stated.

While none of this is good for RIM on an operational basis, it really shouldn't hurt the BlackBerry brand itself. After all, it underscores how secure messages sent on device are -- a key consideration for its traditional base of enterprise users. And the fact that RIM has pushed back against UAE efforts to spy on BlackBerry users there should be reassuring to customers, who could be expected to return the favor with their loyalty.

Perhaps RIM can turn to its best-known customer -- Barack Obama -- to help resolve the issue. Would the UAE make the U.S. President check his super-secure BlackBerry at the border? Maybe not. But if the UAE wants to present cities like Dubai as cutting-edge, business-friendly world capitals, it should back off any heavy-handed tactics for tracking mobile communications.