BlackBerry Reports Outage on Day of iPhone 5 Release

By Mini Swamy

TMCnet Contributor

 

Has the past come back to haunt RIM? Its CEO apologized to customers in Europe and Africa for an outage last week; the disruption in services lasted up to three hours for some users.

 

"I want to apologize to those BlackBerry (News - Alert) customers in Europe and Africa who experienced an impact in their quality of service earlier this morning. The BlackBerry service is now fully restored and I can report that no data or messages were lost," said Thorsten Heins, CEO said in a statement posted on RIM's website.

 

RIM initially said the outage included the Middle East, but RIM spokeswoman Amy Jones later said it did not. RIM notified Facebook (News - Alert) and Twitter as soon as the outage issues had been resolved.

 

An Associated Press article noted the unfortunate timing: the outage coincided with the release of Apple's iPhone (News - Alert) 5. As lines formed outside of Apple stores in a number of cities with the new iPhone 5 going on sale, an already struggling RIM blacked out, leaving it in a rather precarious position.

 

Downtime isn't the only challenge the company is facing. RIM is laying off people and turning over senior management, even as it transitions to a new software platform that has been deemed critical to its survival.

 

"Systems are going to break when you are in that kind of mode. It's the worst possible environment to try and launch a critical, make or break product," observed Colin Gillis, an analyst at BGC Financial, commenting on the outage coinciding with the entry of iPhone 5.

 

With many BlackBerry customers already abandoning their phones for flashier iPhones and Android (News - Alert) phones, the outage couldn't have happened at a worse time for RIM.

 

"It's the worst timing," Peter Misek, analyst at Jefferies said and added, "This is bad publicity and it's very unfortunate."

 

Although no reason for the outage was given and the CEO promised to conduct a full analysis and report back, Misek speculated saying the transition to the BlackBerry 10 software for the new smartphone, could be the cause of the outage. RIM is preparing to launch the new phones early next year, after a series of delays.

 

Perhaps the silver lining is that the outage lasted only a short time, contrary to 2011 when e-mails and chat messages were just not available for up to three days. Not as damaging - yes, but far from ideal.

 

However, the outage, temporary as it was, caused RIM shares to plunge by 6.5 percent, down to $6.45 in trading on the NASDAQ. With a market value of more than $80 billion in June 2008, RIM's stock has plummeted since, from over $140 share to less than $7.