CRISIS MOUNTS FOR BLACKBERRY

 
Steve Dinneen
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BlackBerry maker Research In Motion’s (RIM) crisis deepened yesterday when services in the US and Canada also collapsed.

Customers in the UK were forced to cope without data services on their beloved handsets for a third day, with no sign the misery is about to end.

Analysts told City A.M. the latest breakdown means between 40m and 50m of RIM’s 70m customers are likely to have experienced problems. Services have now failed across Europe, South America, the US, Canada, Africa and the Middle East.

Activist shareholder Jaguar has seized on the outage to redouble its calls for a sale of the company or radical corporate reshuffle. Jaguar, which hopes to build on its eight per cent stake in RIM, has called for co-chief executives Mike Lazaridis and Jim Balsillie to be replaced. RIM has lost two thirds of its value since the start of the year.

The phone-maker said the failure was triggered by a “core switch failure”, causing a gigantic backlog of data. The extra weight on the system led to the delays and interruptions experienced across the world. BlackBerry software boss David Yach said all emails will eventually be delivered.

Sources say it could take until at least the weekend to solve the issue, which is understood to originate in its Slough data centre.

Yach refused to comment on his company’s response to the crisis, which has come in for heavy criticism.

Users are now demanding compensation for their lost services.

One industry insider told City A.M. the cost of data over the period so far could amount to an average of £3 to £4 per user. Based on this, RIM could be set for a payout of around £160m.

However, law partner Toby Rogers of Clyde & Co said it is unlikely customers will have a legal claim. Instead pressure is mounting on RIM to make announce a “make-good” payment. Yach again declined to comment.

RIM apologised to users in a letter last night, adding that it has “people around the world working around the clock to address this situation”.

The outage could not have come at a worse time for RIM, which has seen its market share eroded by the popularity of Google’s Android handsets and Apple’s iPhone. It has invested heavily in a new range of products, including touch-screen handsets and its PlayBook tablet, which have failed to make an impact.


Apple boss Tim Cook used the launch of the iPhone 4S to stress that he is gunning for BlackBerry’s share of the enterprise market, claiming that more than 90 per cent of Fortune 500 firms are now trialling or using the iPhone.

Even Lord Sugar waded into the debate, saying the outage is the biggest he has ever experienced, adding he could not understand how it is taking so long to fix.