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RIM says BlackBerry service restored, apologizes for outage

As the company continued to clear a backlog of messages, its stock dropped again as concerns about the effects of its worldwide service outage added to the company's growing competitive problems.

October 14, 2011|By Jim Puzzanghera, Los Angeles Times
  • Blackberry maker Research in Motion has been losing market share rapidly to Apple Inc.'s iPhone and devices using Google Inc.'s Android operating system, and its service outages this week shook BlackBerrys reputation for reliability, a key reason for its popularity with corporate and government customers. Above, outside a RIM facility Thursday in southern England.
Blackberry maker Research in Motion has been losing market share rapidly… (Olivia Harris, Reuters )

Reporting from Washington — Research in Motion Ltd. said BlackBerry service was fully restored after its worst-ever outage, but the ramifications continued as the company worked to clear a backlog of messages.

Shares of RIM dropped 27 cents, or 1.1%, to close Thursday at $23.61 as concerns about effects of the worldwide service outage added to the company's growing competitive problems. The stock lost 2.2% on Wednesday when the outage hit North America and has fallen nearly 59% this year.

RIM has been losing market share rapidly to Apple Inc.'s iPhone and devices using Google Inc.'s Android operating system, and the problems this week shook BlackBerry's reputation for reliability, a key reason for its popularity with corporate and government customers.

"Whether you look at this from a corporate perspective or a consumer perspective, it's a disaster," said Maribel Lopez, a wireless industry analyst at Lopez Research.

RIM executives vowed to restore the faith for its 70 million customers.

"I want to apologize to all the BlackBerry customers we let down," Mike Lazaridis, RIM's president and co-chief executive, said in a video posted on the company website Thursday.

In a conference call with reporters, Lazaridis said any problems still experienced by BlackBerry users probably were caused by the lengthy backlog of messages resulting from the three-day outage.

He also suggested that customers still experiencing problems remove their BlackBerry's battery for a short time to reset the device because the lengthy outage could have affected its ability to synchronize with the network.

RIM executives said the company has been working around the clock to resolve the outage, which began Monday in Europe, the Middle East and Africa. By Wednesday, the service disruptions had spread to five continents, including North America. Service was fully restored early Thursday, they said.

In addition to making the devices, RIM processes BlackBerry messages and other data through its own network centers around the world.

RIM executives believe the outages were triggered by a hardware failure and a faulty backup system. They said the company would take "immediate and aggressive steps" to minimize the risk of it happening again.

"Our inability to quickly fix this has been frustrating," Lazaridis said.

Many customers have been furious, and some vowed to ditch their BlackBerrys for competing devices. The timing was bad for RIM as Apple begins selling its new iPhone 4S on Friday.

With service restored, RIM executives said they would start considering how they might try to placate angry customers. But co-Chief Executive Jim Balsillie would not say whether the company would offer refunds.

"That is something we plan to come back to these customers on very, very soon, and it's a priority," Balsillie said.

Some wireless providers in Europe reportedly were considering seeking compensation from RIM for the outages. Those companies might give refunds to angry customers, many of whom were without email, instant messaging and other BlackBerry services for more than three days.

jim.puzzanghera@latimes.com

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