RIM Restores BlackBerry Services, Apologizes
09/21/2012| 06:06am US/Eastern
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Research In Motion Ltd. (RIMM, RIM.T) quickly restored BlackBerry service after an hours-long outage across Europe, but left unanswered how its network went down again, less than a year after a three-day global outage.
The timing of the outage Friday came as Apple Inc. (>> Apple Inc.) rolled out its latest smartphone, the iPhone 5, around the world. Like former market leader Nokia Corp. (NOK, NOK1V.HE), RIM is fighting to regain market share lost to newer smartphones like the iPhone and devices powered by Google Inc.'s (>> Google Inc) Android platform.
In a statement early Friday, RIM said it had restored services and apologized to customers that had been affected. The company didn't provide a reason for the malfunction.
Earlier Friday, Vodafone Group PLC (VOD, VODPF, VOD.LN), the world's biggest mobile operator by revenue, said its BlackBerry customers in numerous European countries had been affected, including the U.K., Germany, Italy, Spain and Greece. A U.K.-based Vodafone spokeswoman said she didn't know the cause of the problems.
A representative for Telefonica SA's (TEF, TEF.MC) 02 brand in the U.K. earlier said it was investigating the matter in discussion with RIM.
BlackBerry suffered its worst network outage in October 2011, when its email, instant messaging and browsing were disrupted around the world for up to three days from Europe to North America. RIM later promised to bolster its infrastructure to prevent another such incident.
That was the most significant outage at RIM, but it wasn't the first. BlackBerry devices on different carriers across the Americas suffered service interruptions over the course of a week in December 2009, due to a glitch in its instant-messaging service. And in January 2008, millions of users across the U.S. were left without access to emails during a similar outage. In April 2007 email was knocked out for around 5 million BlackBerry users across North America due to a software update.
The outage comes as RIM struggles to regain some of its lost market share at the expense of Apple and Google-run devices. It is racing to release its newest phone and operating system, BlackBerry 10, early next year. It has recently overhauled management, including replacing its two long-time co-chief executives in January, and is shedding thousands of workers amid wider cost-cutting. RIM reports earnings for its latest fiscal quarter next week.
RIM has started delivering prototypes of its new smartphone devices to carriers in a push to convince them that the new generation BlackBerry can compete with iPhone and Android devices. But so far investors, appear unconvinced that the company has addressed its problems.
RIM's stock has fallen over 70% in the past 12 months amid the growing dominance of Apple and Android, amplified by problems including profits warnings and product delays. Friday, RIM was down 35 cents, or 5.1%, at $6.56 in New York.
RIM is already "under attack" from competitors and the analyst community, and outage is "going to further compound its problems," Nick Dillon, a senior analyst for research firm Ovum said.
--Will Connors contributed to this article.
Write to Lilly Vitorovich at lilly.vitorovich@dowjones.com; Twitter: @LillyVitorovich
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