RIM Outage Good News for Apple?

By Josh Long Comments
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If Twitter comments are an accurate indication, Research in Motion could lose more BlackBerry subscribers to its rival Apple in the wake of a three-day network outage that has spread to North America.

The widely reported disruption has spread from Europe, the Middle East and Africa to North America two days before Apple’s newest smartphones, the iPhone 4S, is set to go on sale.

“We’re aware many of you are experiencing service delays," RIM acknowledged today in a message on its Twitter page. “Restoring full service is our number 1 priority."

That statement alone may not be adequate to stem the frustrations of BlackBerry subscribers, many of whom have been unable to use browsing and messaging services. RBC analysts Mike Abramsky and Paul Treiber estimate that the disruption outside North America could impact up to 40 million BlackBerry subscribers.

“Dear BlackBerry, I want an apology for emails not coming and me missing an interview with a radio station!," Jarleth Eaton wrote on Twitter. “Yours, the newest iPhone 4S user."

Another wise guy, Yousef Al-Mal, had this to say on Twitter: “Dear Blackberry, thanks for the new customers. Sincerely, iPhone."

Canada-based RIM, which services roughly 70 million BlackBerry subscribers around the world, attributed the delays in its messaging service to a core switch failure in its infrastructure. Representing the company's largest service disruption since December 2009, the outage could hurt RIM in markets where the company is continuing to grow, according to RBC analysts.

"While the outages may not have a near-term impact on subscriber growth in these regions, it has raised the ire of consumers ... who are upset regarding BlackBerry's service reliability, and may undermine RIM's claims of network redundancies and five nines (99.999%) server availability," the RBC analysts Abramsky and Treiber wrote in a research note. "Inexpensive, fast, private, reliable messaging is one of the primary considerations for BlackBerry buyers in these markets, and the anger generated by these outages could drive some consumers to evaluate alternative smartphones from Android or Apple ...."

To make matters worse, RIM also acknowledged that the problems had spread: “BlackBerry subscribers in the Americas may be experiencing intermittent service delays this morning," CNN quoted RIM in a statement. “We are working to resolve the situation as quickly as possible and we apologize to our customers for any inconvenience. We will provide a further update as soon as more information is available."

RIM may be running out of time if it hopes to limit the damage to its reputation.

“They cannot afford to have a problem for one more day, because the data backlog will just be massive," Informa Telecoms & Media analyst Malik Saadi told Bloomberg. “It’s really a race against the clock."

Another BlackBerry user expressed more than frustration on Twitter: "Dear Blackberry," wrote Naveen R. Kukreja, "you should know that I'm typing this with my middle finger ... Sincerely, Angry Customer."

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