* RIM said it is working to fix 3-day global outage
* BlackBerry maker says email backlog may clear Thursday
* Finds no evidence of hacking or system breach
* Outage could escalate pressure for sweeping changes
* Shares close down 3.5 pct in Toronto, 2.2 pct on Nasdaq
By Alastair Sharp and Georgina Prodhan
TORONTO/LONDON, Oct 12 The company that makes
the BlackBerry smartphone is working frantically to end a
three-day global service disruption that has frustrated
millions of its customers and pumped up pressure on its
management to make sweeping changes.
Research In Motion , in a hastily
announced conference call on Wednesday, vowed to eventually
deliver all delayed email and instant messages to customers in
five continents affected by the outage.
It later told some of its corporate clients that it may not
clear the huge backlog of messages until Thursday morning on
the U.S. East Coast.
The outage - and RIM's sluggish communications with its
customers - have fanned rising dissatisfaction with its
co-chief executives, Mike Lazaridis and Jim Balsillie.
Critics have called for a shake-up, saying the top managers
have let the company fall too far behind Apple and
other rivals in a rapidly changing market.
"The board clearly needs to take decisive action now - they
need to draw a line in the sand," said Richard Levick, who runs
a consultancy that specializes in crisis management.
"RIM needs to change its DNA entirely - they need to start
thinking like a startup again, instead of a former market
leader," he said.
Though RIM's stock dropped modestly on Wednesday, its
shares have already tumbled more than 50 percent this year on a
series of profit warnings and product missteps - a sharp
reversal of fortune for a company that once dominated the
This week's disruption - the worst since an outage swept
North America two years ago - may have damaged RIM's
once-sterling reputation for secure and reliable message
delivery - perhaps its No. 1 selling feature.
RIM is unique among handset makers, as it compresses and
encrypts data before pushing it to BlackBerry devices via
carrier networks. Apple and others rely on the carrier networks
to handle all routing and delivery of content.
Even before this week's disruptions, many companies had
started to balk at paying a premium to be locked into RIM's
service. Some are now allowing employees to use alternative
smartphones, particularly Apple's iPhone, for corporate mail,
and the outage could accelerate the trend.
"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," said
Richard Windsor, global technology specialist at Nomura.
DLA Piper, a law firm with 4,200 attorneys worldwide, is a
prime example. It is accelerating discussions about switching
to iPhones and Android devices, Don Jaycox, its chief
information officer, said on Wednesday.
"This has brought it to the front-burner," Jaycox said. "It
will cause more people to opt for other choices."
The corporate defections are making a big software
transition even more crucial to RIM. The company is getting
ready to shift its line of BlackBerry smartphones to the new
central operating system first used in the poorly received
Without a successful shift, RIM may never regain market
share lost to the iPhone and devices powered by Google's
Android, analysts say.
"It's a blow upon a bruise. It comes at a bad time,"
Nomura's Windsor said, referring to Wednesday's service
While corporate customers were weighing their options,
BlackBerry users were venting their frustration at the company
and what they said was its failure to keep its customers
"Totally appalled at the lack of communication from RIM,"
wrote Lynn Murdoch on RIM's BlackBerry Facebook page. "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
"I'm right at the edge where I might be saying goodbye to
my BlackBerry," said Tony Vitali, a BlackBerry user in New
York. "The device freezes twice a day. ... It's a very
From a marketing standpoint, the timing of the service
glitch 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. It
is a direct competitor to RIM's BlackBerry Messenger, or BBM.
The RIM service, which allows BlackBerry users to send free
text messages to other BlackBerry users, has made the devices a
popular choice with young consumers. That has partially
compensated for its losses in the corporate market in North
America and Western Europe.
On Wednesday RIM's shares closed down 3.46 percent at
C$24.27 on the Toronto Stock Exchange and down 2.17 percent at
$23.88 on the Nasdaq.