BlackBerry Outage: RIM Apologizes, Says Service Returning

Says service restored, but massive backlog of messages.

ByABC News
October 13, 2011, 9:18 AM

Oct. 13, 2011 — -- BlackBerry is sorry. Very, very sorry. But amid slipping market share and an uncertain future, saying "sorry" may not be enough to win over disgruntled customers after this week's worldwide service interruptions.

On a conference call this morning, the company said all services are "back up globally." It said there is still a backlog of wireless emails that may delay some messages. It could not say how quickly it would be over.

Mike Lazaridis, founder of BlackBerry's Canadian parent company, Research In Motion, appeared this morning in a YouTube video to say, "Since launching BlackBerry in 1999, it's been my goal to provide reliable, real-time communications around the world. We did not deliver on that goal this week. Not even close.

"I apologize for the service outages this week," he said. "We've let many of you down."

Looking tired and stressed in a black shirt with a BlackBerry logo, Lazaridis said service was approaching normal levels in Europe, the Middle East, India and Africa. He promised that the company would work around the clock to get the problems solved.

But those service problem surfaced on Monday, and Lazaridis did not appear until Thursday. Public relations executives who specialize in what is known as crisis management say the slow public response was almost as disastrous for RIM as the technical breakdowns in BlackBerry service.

Ronn Torossian, the CEO of 5W Public Relations, said RIM had failed to show a human face in the early days of the problem. Instead, it responded slowly -- with gibberish.

"Blackberry spokespersons are communicating with messages like 'Message delays were caused by a core switch failure in RIM's infrastructure,'" Torossian said in an email. "That's not consumer-friendly English which resonates with people, and few of us know (or care) what a 'core switch' is. We just want our damn blackberries to work."

Lazaridis told reporters RIM has had a reliability record this year -- at least until this week -- of 99.97 percent. But Monday's outage, which happened without warning, was the largest the company had ever experienced, he said.

Jim Balsillie, his co-CEO, chimed in: "Nobody here has gone home since Monday."

Asked by ABC News if RIM planned anything to compensate angry customers, Lazaridis said, "That's something we plan to address very soon. And that is a priority."

RIM as a company will survive this, said analyst Alkesh Shah of Evercore Partners in New York. But the bigger question is whether its BlackBerrys can keep up with Apple's iPhones and the many smartphones that run on Google's Android software. BlackBerry is still the market leader worldwide, but Android leads in the U.S.

The timing of this week's outage was terrible for RIM, with Apple's iPhone 4S and new iOS 5 operating system coming out this week. RIM has promised a new operating system, called QNX, but there's no word on when customers will see it.

"Where is the phone they say is their future, which is QNX?" said Shah. "2012? 2013? We know they're late to the cycle. Not only are they late, they haven't arrived."

Analysts say BlackBerry is in danger of becoming a has-been, selling phones that primarily do email while Apple and Google have moved on to mobile web browsing, social media and e-commerce.

"I don't think RIM has the loyalty that Apple users show," said Shah.

Even though service appeared to be improving today, RIM's public image apparently wasn't helped by Lazaridis' appearance. Users online were merciless.

"It's great that you apologized for the outage but what else did you tell us?" wrote one person on YouTube after the video was posted. "Step down and let someone else fix this."

Another wrote, "The best way to apologize, give all blackberry services and applications FREE."

Wall Street seemed to agree. RIM stock was down 3 percent today, while Apple and Google rose.