BlackBerry woes spread to the U.S.
A three-day outage affecting BlackBerry customers in Europe spread to North America as the smartphone’s maker struggled to recover from one of its worst service breaks, deliver a backlog of email and revive other features.
The huge disruption, which affected customers on five continents, hit Research in Motion Ltd. at a time when it has been trying to increase sales overseas to offset market gains by the iPhone and Android phones in its primary markets, the U.S. and Canada.
By Wednesday, the outage had prompted some frustrated BlackBerry customers to say they planned to switch to a competing device, even as the company was starting to restore email and such services as BlackBerry Messenger and Internet browsing.
“This is a big blow because it undermines the core value proposition that RIM is built upon — the secure, reliable delivery of messages to your BlackBerry,” said Charles Golvin, a wireless analyst at Forrester Research Inc.
“Any time something like this happens, you forget about the reliable, unflawed delivery of every message over the last 2 1/2 years and you say, ‘I just missed this message. What’s wrong with this thing?’”
Robin Bienfait, RIM’s chief information officer, offered customers an apology late Wednesday. “You’ve depended on us for reliable, real-time communications, and right now we’re letting you down,” she said on the company’s website.
The problems began Monday with an equipment failure in Europe and spread to Asia, Africa and South America before washing ashore Wednesday in North America. RIM did not say how many customers were affected.
“Some customers haven’t seen any impact, while others saw varying degrees of delay or in some cases service interruptions,” said David Yach, RIM’s chief technology officer for software.
Denise L. White, 40, chief executive of Entertainers & Athletes Group, a sports management company in El Segundo, realized something was wrong at 7:43 a.m. Wednesday when there were no new messages on her BlackBerry.
“It’s been horrible for me. I’m someone who relies on my BlackBerry every second,” said White, who normally receives hundreds of emails a day. “It never ceases to amaze me that we can put a man on the moon, but we can’t get our BlackBerrys to work.”
With a schedule that involves constant meetings and time out of the office, she depends on her smartphone for rapid responses to messages. White said the “huge inconvenience” of the latest BlackBerry outage was leading her to think about other options.
“I know there’s quirks with technology and it’s not perfect, but this certainly makes me rethink the iPhone,” she said. “If this strings out until tomorrow, I’m not going to be a happy camper.”
RIM was dealing with unhappy campers around the globe after what it described as a core switch failure triggered the problem. Backup systems failed, causing messages to stack up, Yach said.
“We’ve had to throttle traffic to stabilize service while we process this substantial backlog of messages in a controlled manner,” he said.
But that process led to problems in other regions as messages bound for Europe clogged the system.
Tom Leishman, 25, a freelance photographer in London, said the outage has disrupted a busy week and has “been nothing but a pain.”
He plans to ditch his BlackBerry Curve 8520 for a new iPhone before the weekend.
“With this disaster and the consistent poor performance from BlackBerry, it has just put the last nail in the coffin for me,” he said in an email sent from his iPad. “A calculator would be more useful to me as a phone right now, rather than this Brokeberry.”
In the United Arab Emirates, telecom provider Etisalat said it would compensate its BlackBerry customers in 18 countries in the Middle East and Africa for the three days they have been without service.
And in Colombia, the government reportedly launched an investigation and said it could try to force Research in Motion to provide refunds to customers.
In Washington, D.C., many lawmakers and staffers struggled to do their jobs without their BlackBerrys.
“People live and breathe with these things here,” said Zachary Coile, a spokesman for Sen. Barbara Boxer (D-Calif.). “It’s the go-to device on Capitol Hill.”
But RIM has been losing market share — even in the halls of Congress, where BlackBerrys have dominated electronic communications since the early 2000s.
For House members and staffers, government officials authorized the use of iPhones and iPads on the internal network last year and Android phones in April. There are now about 9,000 BlackBerrys and 1,500 other smartphones, according to House administrators.
RIM, which is based in Canada and has 70 million customers worldwide, about 60% of them in North America, has been the dominant provider of cellphone and email devices for corporate and government customers.
But even though it continues to add subscribers, it is being significantly outpaced by Apple Inc.'s iPhone and devices with Google Inc.'s Android system. BlackBerry’s share of the U.S. smartphone market has plunged to 19.7% in August from 37.6% in August 2010, according to online research firm ComScore Inc.
With disappointing sales for its PlayBook tablet, RIM posted earnings of $329 million for its fiscal second quarter, which ended Aug. 27. That’s less than half the $797 million it earned in last year’s second quarter. Revenue fell 10% from a year earlier to $4.2 billion — the first such quarterly drop in nine years.
Shares have plummeted 59% so far this year. They fell 53 cents, or 2.2% on Wednesday, to $23.88.
“BlackBerry just looks kind of unappetizing to the broader market, and I think as an investor you have to really wonder what it is that would cause you to be optimistic about them,” analyst Golvin said.
Joey Lauren Koch, 29, a music supervisor for film and television who works in West Los Angeles, is a self-proclaimed “BlackBerry girl.” But she didn’t sound too optimistic about her future with the device.
“Not having emails is a nightmare. It makes me feel like I can’t leave my computer all day,” she said. “I can’t even go and get lunch.”
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