* Global network disruptions enter a third day
* Outage could escalate pressure for sweeping changes
* Reputation of RIM's secure network put at risk
* Problems coincide with launch of Apple's new iPhone
* Shares down 1.75 pct in Toronto, down 0.5 pct on Nasdaq
By Georgina Prodhan and Alastair Sharp
LONDON/TORONTO, Oct 12 A three-day disruption
of BlackBerry services spread to North America on Wednesday,
frustrating millions of users of the Research In Motion smartphones and putting more pressure on the company
for sweeping changes.
RIM advised clients of an outage in the Americas and said
it was working to restore services as customers in Europe, the
Middle East, Africa and India continued to experience patchy
email delivery and no access to browsing and messaging. There
were no reports of disruptions elsewhere in Asia.
The disruption, the worst since an outage swept North
America two years ago, is likely to fuel calls for a management
shake-up and a possible sale or split of the company, which has
failed to keep pace with Apple and other rivals in a
rapidly changing market.
"It's a blow upon a bruise. It comes at a bad time," said
Richard Windsor, global technology specialist at Nomura.
"One possibility could be that it encourages client
companies to look more at other options such as allowing users
to connect their own devices to the corporate server and save
themselves the cost of buying everyone a BlackBerry."
The troubles in RIM's network, which compresses and
encrypts data before pushing it to BlackBerry devices via
carrier networks, could damage its once-sterling reputation for
secure and reliable message delivery and risks a further
devaluation of its proprietary offering.
Many companies, no longer seeing the need to pay to be
locked into RIM's email service, have already begun allowing
employees to use alternative smartphones, particularly Apple's
iPhone, for corporate mail.
At the same time, RIM is getting ready to shift its line of
BlackBerry smartphones to new software first used in the poorly
received PlayBook tablet. A successful transition is considered
crucial for its efforts to regain market share as the iPhone
and devices powered by Google's Andriod become ever more
While RIM's share price dropped modestly after the outage
spread to North America, the stock has already dropped more
than 50 percent since the beginning of the year. On Wednesday
it was down 1.75 percent to C$24.66 in Toronto and off 0.53
percent to $24.29 on the Nasdaq.
On Tuesday, the company linked the disruption to a failure
in its message routing infrastructure that it was addressing.
"The messaging and browsing delays ... were caused by a
core switch failure within RIM's infrastructure," it said. "As
a result, a large backlog of data was generated and we are now
working to clear that backlog and restore normal service."
Even so, the problems appeared to have spread by Wednesday,
prompting users to vent their frustrations on RIM's Facebook
page, where the company said restoring full service was its top
"Totally appalled at the lack of communication from RIM,"
said Lynn Murdoch. "Love my Berry, but furious at the fact that
no one can actually give a time frame of how long its going to
take to fix. Utterly disappointed!"
Another user lamented a recent purchase. "Just got a new
BlackBerry and I see now it was a total mistake," Jessica Jamie
Smit wrote. "Next upgrade will definitely NOT be a
RIM later set up a page on its website posting service
From a marketing standpoint, the timing could hardly have
been worse for RIM.
Apple on Wednesday launched an major upgrade to its iOS
operating system that includes iMessage, an instant messaging
service for users of Apple's iPhones, iPads and some iPods that
is a direct competitor to RIM's BlackBerry Messenger, or BBM.
The service, which allows BlackBerry users to send free
text messages to other BlackBerry users, has made the devices a
popular choices with young consumers. That has partially
compensated for its losses in the corporate market in North
America and Western Europe.
RBC Capital Markets analysts Mike Abramsky and Paul Treiber
said the latest crisis could hurt RIM's reputation in these key
markets, particularly after high-profile tussles with states
whose governments demanded access to encrypted communications
for security reasons.
Veteran British entrepreneur Alan Sugar, who founded
electronics company Amstrad in 1968, tweeted: "In all my years
in IT biz, I have never seen such an outage as experienced by
Blackberry. I can't understand why it's taking so long to