Smartphone maker Research In Motion (RIM) is facing a user revolt after tens of millions of users in Europe, the Middle East and Africa suffered a second day without services such as BlackBerry Messenger (BBM), as the company struggled with problems at its hub in Slough, Berkshire.
The company also revealed that the areas affected now include South America, with users in Brazil, Chile and Argentina suffering loss of service.
With more than 70 million subscribers to its services around the world, RIM (NSDQ: RIMM) may have suffered lasting damage to its reputation. Reaction on social networks suggested that some users are considering moving to other platforms, such as Android phones or Apple’s iPhone, which are not reliant on RIM’s centralised service for connectivity.
The Guardian understands the problems have been caused by database corruption in Slough. Though the teams believed it had been fixed on Monday, the problem reappeared on Tuesday, effectively disabling the network operations centre. The Guardian also understands that RIM’s staff now hope to have the problem fixed by 8am BST on Wednesday.
The outage follows one that began on Monday morning at about 11am BST and lasted until late in the afternoon. RIM had indicated that the problem was fixed, but on Tuesday morning BlackBerry users discovered they had once again lost service, with limited access to emails, web browsing and secure services such as BBM.
The problems have caused some people to reconsider their use of RIM’s platform, which relies on its own servers to encrypt communications and connect BlackBerry devices to the internet. Any time that RIM’s servers suffer an outage like that which has hit it over the past two days, users of the systems can find reception of emails, texts and web browsing severely limited.
Any loss of customers in the EMEA (Europe, Middle East and Africa) region would be a serious problem for RIM, which has been losing market share in North America, traditionally one of its strongest markets, to phones running Google’s Android mobile operating system and to Apple’s iPhone.
In the US, RIM has lost 4.3 million users in the past year, according to calculations by Horace Dediu, of the independent consultancy Asymco. “[It] is now at about the same number of users it had in late 2009. This is in a market that has more than doubled,” he noted.
“With only about 16.5 million US users and an average loss of half a million users per month, unless something drastic happens, RIM could lose its entire US user base by the end of next year.”
RIM has been aiming to balance that by expansion in EMEA and regions such as India. But it is being badly squeezed on price there by more affordable Android phones. Its most recent quarterly results showed revenues down by 10 percent year on year, and profits crashing by 60 percent.
In the EMEA region, RIM has been showing growth in the number of handset sales over the past quarter, according to data from ComTech WorldPanel seen by the Guardian. This has largely balanced out losses of users in the US.
But the company has been under growing financial pressure this year as its investment in its PlayBook tablet has failed to ignite sales: it shipped just 500,000 in its first quarter on sale in spring, and only 200,000 in the succeeding quarter. In the US it is now offering $200 discounts, but those have not been extended to the UK. Sources with sight of UK retailing figures said that: “RIM partners have been told to keep shtum about the bad situation [of PlayBook sales].”
The Guardian’s calculations suggest that RIM has up to 800,000 PlayBooks in its in-house inventory. The total inventory held by the company has swollen to the equivalent of almost 35 percent of revenues, suggesting a serious backlog of unsold equipment.
RIM’s manager for the EMEA area was not available to comment. In a statement issued at 4pm BST on Tuesday, the company said: “Some users in Europe, the Middle East and Africa, India, Brazil, Chile, and Argentina are experiencing messaging and browsing delays. We are working to restore normal service as quickly as possible. We apologise for any inconvenience this has caused.”
Ontario-based RIM is the only smartphone platform which uses the system, devised in its early days so that it could offer secure connectivity for early users, and reduce the amount of bandwidth used by individual devices. Communications for North America are directed through its hub at its Ontario headquarters, while those for Europe, the Middle East and Africa run through its headquarters in Slough.
This article originally appeared in MediaGuardian.