BlackBerry failure may hurt reputation

Analysts say the network interruption of Research in Motion's BlackBerry e-mail service yesterday could give a boost to rivals like Apple Inc., Microsoft Inc., and Nokia Oyj. (J.P. Moczulski/The Canadian Press via Associated Press/File 2007)

NEW YORK - Research In Motion Ltd.'s second BlackBerry failure in 10 months risks damaging the company's reputation as the most reliable service and gives a boost to Apple Inc., Microsoft Corp., and Nokia Oyj.

The glitch shut off e-mail and Internet access for three hours Monday and affected all carriers in North America, where the company has more than 8 million subscribers.

Cochief executive James Balsillie said in an interview the company reacted quickly to correct the problem.

Companies may increasingly opt for e-mail services that offer more flexibility, shying away from systems such as the BlackBerry that are fully controlled by Research In Motion, said Gartner Inc. analyst Phillip Redman.

Customers using Apple's iPhone or handsets with Microsoft's Windows have more control over the servers and software that run their e-mail systems.

At stake is Research In Motion's share of the smart phone market, where sales expanded 72 percent worldwide last quarter to 35.5 million devices, according to Reading, England-based researcher Canalys. That compares with 13 percent growth for the total mobile phone market.

Research In Motion, based in Waterloo, Ontario, fell $2.97 to $91.50 in Nasdaq Stock Market trading. The stock has more than doubled in the past 12 months.

The failure occurred at about 3:30 p.m. Monday and was fixed three hours later, Research In Motion said. No messages were lost, and calling and text messaging services weren't affected.

"Obviously, the important thing is that it was fully restored quickly," Balsillie, 47, said in an interview with Bloomberg Television. "It was pretty focused and isolated and we recovered well," he added. An upgrade to Research In Motion's network operation center caused the problem, The Wall Street Journal reported yesterday, citing a person familiar with the matter.

Research In Motion said it has set up a team to investigate the shutdown and avoid a reoccurrence.