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Tuesday, August 03, 2010, 08:20 pm PT (11:20 pm ET)

Saudi Arabia announces it will block BlackBerry service Friday

Saudi Arabia, citing security concerns, revealed Tuesday its intention to block some of Research in Motion's BlackBerry services beginning Friday.

The news comes as the latest threat in a heated debate between RIM and several governments. As reported by Reuters, India and Kuwait have both objected to being unable to monitor Blackberry services. Last week, the United Arab Emirates threatened to block BlackBerry Messenger, email, and browsing services on Oct. 11 if not allowed access to encrypted messages.

Unlike Apple, RIM operates its own encrypted servers for handling data from its BlackBerry devices. Countering rumors that RIM had agreed to allow select governments to monitor BlackBerry data, the Canada-based company released a statement Tuesday reassuring customers that it remains unable to access user data.

"The BlackBerry security architecture for enterprise customers is based on a symmetric key system whereby the customer creates their own key and only the customer ever possesses a copy of their encryption key. RIM does not possess a "master key", nor does any "back door" exist in the system that would allow RIM or any third party to gain unauthorized access to the key or corporate data."

Saudi Arabia's threat arrived at a poor time for RIM. The announcement came just hours after a high-profile unveiling event for the new Blackberry Torch, a device touted by many as RIM's response to Apple's growing dominance of the smartphone market. The new touchscreen phone supports multi-touch gestures and sports a 480x360 pixel display, a 5 megapixel, and a slide-out keyboard.

During the launch event, a RIM executive predicted that few governments would make good on their threats. "I believe they'll have trouble pulling the trigger to shut down BlackBerry," Chief Technology Officer David Yach told Reuters. "Most governments in the world rely on BlackBerry."

Analysts covering Tuesday's drama think RIM has more at stake with the new Torch smartphone than in the Middle East. According to Reuters, Charter Equity Research analyst Ed Snyder believes that "the success or failure of the new smartphone is far more important for RIM's immediate fortunes than the Middle East security issues."

New data released by Nielsen shows that half of BlackBerry users want to switch to other smartphone operating systems for their next purchase. 29% of BlackBerry owners polled want to switch to the iPhone OS, while just 2% of iPhone owners want BlackBerry OS for their next purchase.

NASDAQ shares of RIM were down 2.5% at the close of market, although analysts blame disappointment with the BlackBerry Torch as the key factor, rather than fears of governmental opposition in the Middle East.