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BlackBerry Dropped by Booz Allen for Apple, Android

October 18, 2012

Booz Allen Hamilton Inc., whose 25,000 staff provide consulting services to the U.S. government, has dropped BlackBerry maker Research In Motion Ltd. (RIM) as a smartphone supplier.

Booz Allen has started decommissioning the firm’s dedicated BlackBerry server that runs those devices and plans to move those staff onto iPhones made by Apple Inc. (AAPL:US) and handsets that run Google Inc. (GOOG:US)’s Android software in the coming months, James Fisher, a Booz Allen spokesman, said by telephone. The company already issues some iPhones and Android handsets, though he declined to say how many. Staff not issued a device who now bring their own BlackBerry to work won’t be able to access work e-mail on the device once the switch is complete, he said.

The move is a knock to Waterloo, Ontario-based RIM because its sterling reputation for security had helped shore up BlackBerry loyalty in government circles even as sales (RIMM:US) plummet elsewhere. Its market share has fallen as customers in the U.S. tire of waiting for its twice-delayed BlackBerry 10 phones due out in early 2013 to replace its current lineup.

Booz Allen, based in McLean Virginia, provides management and technology advice to the U.S. Army, Navy, Air Force and Department of Homeland Security. Its parent company Booz Allen Hamilton Holding Corp. (BAH:US) last year had sales of $5.86 billion, the “vast majority” of which comes from government consulting, Fisher said.

Government Clients

Yesterday, Booz Allen said it was buying the defense systems and engineering support unit of Annapolis, Maryland- based Arinc for an undisclosed sum, adding 1,000 staff.

Other smaller government agencies are also looking at BlackBerry alternatives. The General Services Administration procures more than $70 billion worth of products and services for other federal agencies a year. Since February, those eligible for a smartphone among its staff are entitled to ask for iPhone and Android devices. The company employed 12,635 at that time.

The U.S. National Oceanic and Atmospheric Administration said in February it plans to begin replacing the BlackBerrys it issues with iPhones as the Apple devices can be integrated into its current infrastructure more cheaply than paying for a dedicated BlackBerry server.

RIM continues to work closely with its more than 1 million government customers in North America alone, Crystal Roberts, a company spokeswoman, said by telephone today.

Scott Totzke, senior vice-president for BlackBerry security, said in April that sales to U.S. federal agencies are rising and the BlackBerry is still a White House fixture.

RIM fell (RIMM:US) 1.9 percent to $7.84 at the close in New York. The shares are down 95 percent from their mid-2008 high and have tumbled 45 percent this year. Booz Allen dropped 1.6 percent to $12.67.

To contact the reporter on this story: Hugo Miller in Toronto at

To contact the editor responsible for this story: Nick Turner at

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