Over the weekend, the two companies told users that all the personal information stored on their QWERTY keyboard-equipped phones, including phone numbers, addresses and appointments, was gone – most likely for good.
Now, all visitors to the Sidekick's Web site are greeted with an apology. The phones are made by Microsoft's subsidiary Danger and sold by T-Mobile and, in the Web site's message the two companies say all information has "almost certainly been lost as a result of a server failure."
Tech analysts and top bloggers say the data loss is damaging to the companies' reputations and a warning about the risks related to saving data only in the so-called "cloud" and not on owners' hard drives or personal computers.
Although a Microsoft spokeswoman told The Associated Press that there was still a chance that some lost data could be restored from a backup system, T-Mobile says regardless of that outcome, they will automatically credit one month of data service to those who subscribe to T-Mobile Sidekick data plans.
The benefit of a cloud storage system is that if a user lost a phone, saved data could easily be downloaded to a new device. But unlike newer phones, the Sidekick didn't give users a way to backup contents locally, on a computer or elsewhere.
"It's the perfect storm of chuckle-headedness," said Dan Tynan, a technology reporter and co-author of the technology humor site eSarcasm.
Given the Sidekick's data storage system, he wondered how Microsoft didn't ensure real-time replication of the data and provide up-to-the-minute backups -- or, if it did, what went wrong.
It's not known how many customers have been affected by the loss, but The AP reports that, judging by T-Mobile's financial statements, the figure could approach 1 million.
Tynan said that it's rare for a major company to suffer such a severe screw-up but helped ABCNews.com come up with a few other recent technology disasters. Here are six more.
In what has been called the largest credit card crime of all time, earlier this year, Heartland Payment Systems announced that hackers had broken into the computers it uses to process about 100 million transactions each month for 175,000 merchants.
The hack was uncovered in January, after Visa and MasterCard notified Heartland about suspicious transactions. Heartland processes card payments for restaurants and other businesses.
In August, three men were indicted by a grand jury on charges related to masterminding a scheme to steal more than 130 million credit and debit card numbers and personally identifying information from Heartland, 7-Eleven Inc. and other companies.
According to Information Week, Heartland said in August that the breach cost the company $32 million in legal fees, fines, settlements and forensics, so far.
In November 2007, the British government acknowledged that it had lost two disks containing personal information for 25 million Britons. The two disks were dropped into internal government mail but never reached their destination. The disks contained detailed information, including bank account numbers, names and addresses.
The government said there was no indication that the data had fallen into criminal hands. But technology experts and civil libertarians said the lapse highlighted the risks associated with providing personal information to governments and large institutions.
Other security experts described it as potentially the most significant data breach of the information age. Treasury chief Alistair Darling, charged with disclosing the breach to lawmakers, called the event "catastrophic," The AP reported at the time.
"I can well understand people's anxiety and anger that this has happened. It should never have happened, and I apologize unreservedly for that," Darling said.
But British officials are not the only government representatives who have had to deal with data disasters.
In May 2006, U.S. Veterans Affairs officials disclosed that a laptop containing personal information for millions of veterans had been stolen in a burglary from the home of an agency employee in Maryland.
The agency estimated that about 17.5 million veterans were at risk and reportedly offered to cover the cost of monitoring their credit for one year, to the tune of $160.5 million.
Fortunately, about a month later, the FBI announced it had recovered the laptop and the personal information had not been compromised.
It started with an exploding laptop in Japan and ended with one of the largest electronics-related recalls the Consumer Products Safety Commission had ever seen.
After one of its computers caught fire at a conference in Japan, in August 2006, Dell recalled 4.1 million notebook computer batteries that were supplied by Japan's Sony Corp.
The flaming computer was caught on video and proceeded to go viral online, along with several other news reports and pictures of burning Dell laptops.
Though it is now eclipsed by this year's Heartland hack, a massive intrusion on T.J. Maxx's systems a few years earlier is significant because it was one of the first to show just how vulnerable retailers were.
In December 2006, T.J. Maxx alerted law enforcement that cybercriminals had stolen more than 45 million customer records in 2003 and 2004.
According to Information Week, within eight months, the company had spent more than $20 million investigating the incident, notifying customers and hiring lawyers to deal with the dozens of associated lawsuits. The hack alerted the industry to the threat of cybercriminals and pushed lawmakers to fast-track data security legislation, Information Week reported.
In August 2003, a massive blackout left more than 60 million customers in the U.S. and Canada without electricity. The cause? Some say a software bug in an Ohio utility's system was to blame.
The blackout started in Ohio, when fallen trees took down power lines managed by Akron, Ohio-based FirstEnergy Corp. But eSarcasm's Tynan said that, because a critical alarm did not sound, the problem spread to other parts of the country.
"A computer cascade. That's the reason all those failures happened," he said.
Testifying before Congress, Pete Burg, the chief executive of FirstEnergy, said, "We strongly believe that such a widespread loss of power could only result from a combination of events, not from a few isolated events."
But in an interview with InformationWeek, Stan Johnson, manager of infrastructure security at the North American Electric Reliability Council, said that if the alarm had gone off as planned, the blackout could have been contained.
"It didn't cause the power to go off, but it was a big contributor to the lack of response by FirstEnergy," Johnson said.