UPDATE 2-T-Mobile-Sidekick US users face personal data loss

* Says Sidekick users "almost certainly" lost remote data

* Says likelihood of data recovery low

* Advises users against device reset, battery drain

* Microsoft shares up 0.8 pct on Nasdaq
(Adds T-Mobile USA comment)

NEW YORK, Oct 12 (Reuters) - Users of Microsoft Corp's
(MSFT.O) Sidekick mobile phone may have permanently lost data
such as contacts, photos and calendar entries due to the
failure of a Microsoft server computer.

T-Mobile USA, a unit of Deutsche Telekom (DTEGn.DE), said
in a notice available on its website on Monday that its
customers who do have such data stored locally on their
Sidekick devices will "almost certainly" have lost the data.

It also advised customers against resetting a Sidekick by
removing the battery or letting the battery drain as this would
still result in the loss of any personal content stored on the
device made by Danger, a company Microsoft bought in 2008.

When operating normally, the Sidekick retrieves data from
Microsoft servers after an event such as a phone reset.

"Personal information stored on your device such as
contacts, calendar entries, to-do lists or photos that is no
longer on your Sidekick almost certainly has been lost as a
result of a server failure at Microsoft/Danger," a Microsoft
unit, the company said.

T-Mobile USA [TMOG.UL] said in the statement dated Oct. 10
that it would update customers again on Monday. T-Mobile USA
spokesperson Cara Walker noted that only a minority of the
company's Sidekick customers have lost data due to the outage.

But Walker said that T-Mobile USA was still advising
customers not to reset their devices on Monday.

Microsoft said in an emailed statement that the recovery
process has been "incredibly complex" because it suffered a
confluence of errors from a server failure that hurt its main
and backup databases supporting Sidekick users.

The glitch comes as technology companies are increasingly
looking to convince customers to use remote storage services to
back up their data and at a time when Microsoft is fighting to
regain ground lost in smartphones.

Because Sidekick runs on a proprietary Danger system
Microsoft said that its other computing services were totally
separate and did not rely on Danger's technology.

T-Mobile USA, the No. 4 U.S. mobile service, said that
while its workers were seeking a way to recover the
information, "the likelihood of a successful outcome is
extremely low."

The operator, which has been losing customers to both
bigger and smaller rivals, said it is currently focused on
looking for a way to restore data and is also considering
additional measures for customers who have lost data.

Two Sidekick phones were listed as "temporarily out of
stock" on T-Mobile USA's website on Monday.

Microsoft shares were up 3 cents at $25.59 on Nasdaq.
(Reporting by Sinead Carew and Franklin Paul, editing by
Gerald E. McCormick and Matthew Lewis)