BlackBerry breakdown is 'death sentence'

The three day failure of BlackBerry data services could become a "death sentence" for the device, which is already facing increased competition globally

BlackBerry users in the UAE faced a third day of disruption yesterday. Jaime Puebla / The National Newspaper

The three-day failure of BlackBerry services could become a "death sentence" for the maker of the device, according to a telecommunications analyst.

The breakdown in data services is forecast to cause more customers to desert the troubled brand, which is one of the most popular smartphones in the region. However, it has been losing market share globally to Apple's iPhone and to rival phones that run on Google's Android operating system.

BlackBerry users in the UAE faced a third day of disruption yesterday, with email, messenger and internet functions unavailable.

"Anyone want to buy a battered BlackBerry? I'm switching to iPhone," said Zoya Pasha, a Dubai-based public relations worker, on her Twitter feed.

The problem first hit users in the Middle East, Europe and Africa, and by yesterday had spread to other markets including India, South America, Canada and the United States. Millions of customers are said to have been affected.

RIM, the BlackBerry maker, said a crucial link in its infrastructure had failed, and a backup did not work either. It said it was working to get through a backlog of traffic.

"The resolution of this service issue is our number one priority right now and we are working night and day to restore all BlackBerry services to normal levels," the company said yesterday.

The service failure is expected to "make a significant impact on future sales", said Philip Brazeau, who heads the telecoms practice at the law firm Al Tamimi in Dubai. "It can be a death sentence with respect to market share."

The technical fault could see BlackBerry cede further market share to Apple and phones that use the Android system, said Mr Brazeau.

"With these technical difficulties, it is putting many consumers in the position that - where they may have hesitated to switch from a BlackBerry to another device - they won't hesitate before doing so now," he said.

BlackBerry's share of the global smartphone market dropped to 12 per cent in the second quarter of this year, compared with 19 per cent last year, according to the research firm Gartner. Research In Motion (RIM), the company behind the BlackBerry, has also reported disappointing sales of its PlayBook tablet, a rival to the Apple iPad.

"The competition between smartphone providers has reached a level of intensity that we've not seen to date," Mr Brazeau said. "It doesn't take much to tip the scale on the consumer decision-making process. It is most unfortunate for BlackBerry."

Other commentators agreed the BlackBerry problem could hit sales.

"People will lean towards asking questions as to whether to stick with the service," said Matthew Reed, a senior analyst for the Middle East and Africa at Informa Telecoms & Media.

Mr Reed said that while a one-day failure of data services was likely to be forgiven by consumers, extended disruption might not.

"If it had just been for a few hours, or even one day, it could have been seen as a one-off. I think it could be getting to the point where it could affect consumer and business users," he said.

The Nasdaq-traded shares of RIM have fallen 50.55 per cent over the past 12 months, and are hovering at five-year lows. RIM shares late yesterday were trading down by 2.13 per cent to US$23.89 amid growing calls by investors for all or part of the company to be sold.

"A lot of people are questioning the overall prospects [of RIM]," said Mr Reed. "But at the same time, it has continued to do well in some emerging markets, such as the Middle East and Africa."

Despite the service problems this week, BlackBerry ranks as one of the most popular smartphone brands in the region.

Jim Balsillie, the co-chief executive of RIM, said this week there had been a 140 per cent rise in BlackBerry subscriptions in the Middle East in the year to August.