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QUEST MEANS BUSINESS
BlackBerry Bug Spreads; RIM Shareholders Concerned; Jose Manuel Barroso's Euro Zone Rescue Plan
Aired October 12, 2011 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: BlackBerry's blackout, the company apologizes on this program.
A man with a plan. Barroso lays out his blueprint on the banks.
And the luxury of being a luxury brand. Calvin Klein's chief executive tells me why they have it all sewn up.
I'm Richard Quest, an hour together, and I Mean Business.
Good evening. BlackBerry's international data outage -- in other words, no BlackBerry service for many users -- has entered a third day. And a top RIM, Research In Motion, shareholder is asking if it's now time to sell the company. We'll speak to that shareholder in just a moment.
First, though, a look at how RIM's connection crisis is spreading.
North America is the latest region to experience the bug that struck millions of users across Europe, the Middle East, Africa, South America and India. Frustrated users are finding themselves cutoff from emails, Web browsing and the popular BlackBerry messenger service.
A short while ago, I was joined by Stephen Bates, RIM's UK managing director, who, needless to say, said sorry.
STEPHEN BATES, UK MANAGING DIRECTOR, RIM: So first of all, I'd like to acknowledge the frustration that we know our customers are experiencing through the delays and the messaging and the browsing traffic.
I'd also like to apologize unreservedly to the customers who are experiencing this problem.
We do have an extremely critical issue on our network that we are working night and day to get resolved. We do believe the -- the root cause behind this messaging and browsing delay is in the core switching systems within the RIM infrastructure.
Typically, within the RIM infrastructure, we do have a lot of backup systems to provide that resiliency, and in the case of the switching systems, that backup has not worked as we would expect it.
We are working night and day, as I said, to get that service level back to the -- to what we would expect, and also what our customers expect.
QUEST: You can see why people are saying, why is it taking you so long?
BATES: Yes. The challenge we've had with this is that this problem has been intermittent. It's been intermittent. We saw this issue pop up on Monday, and then it popped up again on Tuesday. And that just makes it much harder to get to the bottom of it.
But we do believe, and we're putting all of our focus with all of our engineers and all of our network specialists on trying to understand the nature of why this backup system didn't work as it should have done.
And the key thing for us is to get the service back to the levels that we expect and our customers expect from the BlackBerry service globally.
QUEST: All right. So -- so to our viewers who are, frankly -- I'm sure they're telling you, spitting feathers, can you -- can you tell them, is the situation stable, is it getting worse, or is it getting better?
BATES: So at this stage, we understand the frustration our customers have because BlackBerry is used as a communication vehicle to connect to their friends, their family and their work colleagues. So we understand the importance of that system working in real time.
We -- we do some improvements. We have seen a marked improvement in the throughput of both business and consumer email through our systems. And we still don't think we're out of the woods yet, and our team is working -- is going to continue working night and day until we can get to that resolution point.
QUEST: The managing director of -- the UK MD for Research In Motion and for BlackBerry.
The drama isn't playing out on the stock market at the moment. RIM shares are currently down just a half percent in the New York market. But if you look at the latest or the last couple of years' moves, you certainly see a very different story, as regards Research In Motion.
Let's look at where we begin. So you have Research In Motion, that seems to be the high point at 143, and they announce the BlackBerry Bold. After that, we got put that CD financial crisis with the BlackBerry Storm. So, so far, it's not too worryingly against the actual company itself.
By the time the BlackBerry PlayBook is announced, you start to see definitely a scenario where the share price has done nothing much over that period, right the way to the fall here where you now start to see the company is missing its forecast and falling very sharply.
And if you are a BlackBerry -- I know I am a shareholder -- what you see very clearly and very firmly since then is a straight line all the way down. It's not surprising that some RIM shareholders are seriously questioning the way the company is being run.
Vic Alboini is the director of Jaguar Financial, which owns an eight percent stake in RIM. He says he doesn't blame the data outage on the management or the way the company is being run.
However, he says he is getting growing support for the idea that there needs to be a radical shakeup and ultimately, RIM should be sold.
VICTOR ALBOINI, RIM SHAREHOLDER (via telephone): Well, essentially, the company is being run as a private company. The company is crosslisted in NASDAQ and the Toronto Stock Exchange, it's a public company.
The directors really are not fully involved as they should be. There's too much management dominance of the board of directors. That's evident by the fact that they're not only co-CEOs, but they're also co- chairs.
Also evidenced by the fact that one of the two co-CEOs basically spent a lot of time pursuing his hockey dream, and that is to buy an NHL hockey team, which is commendable, but he should step down as co-CEO. You cannot have CEOs engaged in more than part time pursuits, as they were.
QUEST: All right.
ALBOINI: So that's my fundamental concern, is the lack of oversight by the board and too much management dominance.
QUEST: Is BlackBerry now in a situation in RIM that it can no longer really survive on its own in your view?
ALBOINI: Well, that is the fundamental question. And sitting right here, right now, I wouldn't be able to give you a hundred percent firm answer one way or another.
That takes a lot of study by the independent directors with very skillful financial and tech advisers, and separate legal advisers, to say, you know what? Last time I looked we've got a billion foreign cash, Google has over 30 billion, Microsoft has over 50 billion and Apple has 76 billion going to 100 billion.
Can we survive on an R&D basis spending, you know, a certain percentage of revenue in terms of research and development? Are we better off not only having our own platform but merging with somebody like a Microsoft?
Microsoft moved from the desktop, obviously, to the mobile platform. They've entered into a strategic alliance with Nokia.
You know, for some time I've said that that's a half of loaf. Microsoft, you know, if you're going to get into the mobile business via enhanced maker as Google is doing to integrate the hardware and software platform as Apple has already done. Google is copying what Apple has done.
The other tech leader with a mobile platform is Microsoft. Those are the three giants in the industry. And in my view, my humble view, I think Microsoft either should have bought Motorola or should buy RIM or potentially should look at Samsung or HTC.
I mean the world, in my view, is going to get a lot smaller in terms of people that are going to vie for market share of a billion cell phones by 2015.
QUEST: All right. Finally, you obviously speak for your own percentages, and you have others that you are in contact with. Is this a growing and wider-spread view of investors in RIM, do you believe?
ALBOINI: Well, I will say this without trying to be too promotional, that we've had some modest success in speaking to about 20 -- maybe it's now 25 institutional investors, and we've had 12 or 13, now -- I think we're at 13 investors that have agreed to support nothing more than us going to RIM to make headway on the issues we've identified on governance and realization of shareholder value.
So, that's not a bad -- percentage, if you will. There are a thousand institutional investors, and we are not going to reach out to all of them. We're going to reach out to the main investors.
But being able to garner support of more than 50 percent of the people we talk to is not bad, and there certainly is terrific angst and disappointment with regard to the governance issue, the dramatically falling stock price.
And putting the company up for sale, trying to raise -- sorry, realize a surge in equity value, everybody would sort of agree with that if you're not able to manufacture that surge in equity value on a standalone basis.
QUEST: One of the investors in RIM, who says it should be sold. And that is the share price. We're talk more about this in just a moment.
Shelly Palmer is a technology expert, of course, host of "Live Digital with Shelly Palmer," and always good to have him on QUEST MEANS BUSINESS. Shelly is our expert who helps us understand these things.
How realistic do you think -- you heard the viewers, there, of Victor Alboini. How realistic to sell it off, a Windows, a Microsoft, a Nokia, somebody else buying?
SHELLY PALMER, HOST, "LIVE DIGITAL WITH SHELLY PALMER": You know, it -- look. A company's only worth what someone's going to pay for it on a given day.
Microsoft wrote a billion-dollar check to Nokia, we haven't seen the fruits of that labor yet. Windows 8 is coming out, it's very tablet- oriented, Microsoft is all Cloud-based. That is so not what RIM is about.
I don't see Microsoft being a suitor, although they could write the check, the company's not worth as much as it used to be, as you pointed out. Back in February, you had --
PALMER: -- a $70-ish stock. It's $24 this morning. So, it's not as expensive as it was, and there are a very large number of people who rely on BlackBerries every day, and you know that's true because of the huge outcry over the last couple of days as the service outages has really started to affect everyone, especially here in North America.
QUEST: OK, Shelly, the question is, we know that RIM or BlackBerry has been hit by Apple and all these other things. How damaging is this outage to the company? Because frankly --
PALMER: I don't think that --
QUEST: -- as long as corporates stay with it, it doesn't mean much. If mum and pop go --
QUEST: -- it doesn't matter.
PALMER: It doesn't seem like an outage, an individual outage. This is just sort of kicking then when they're down. It's an unfortunate situation that they are having, this outage right now, and it is hugely inconvenient.
But you know, they just brought out the 9900, 9930 line of BlackBerries, it's the new Bold. It's got a touchscreen, it's very, very well-made, has a wonderful keyboard, the BlackBerry keyboard we all like.
Some people, like me, have gone out on record and said, that's like a day late and a dollar short. They really have been very late with new technology. But this is a good effort. I think they're starting to understand what the market wants and they're starting to deliver it.
Of course, today, you know the joke, today, Richard, is what did one BlackBerry user say to the other BlackBerry user?
QUEST: I don't know, what's this one?
QUEST: What did one BlackBerry user say to another user?
PALMER: Nothing. You can't get a signal.
QUEST: Finally, Shelly, as I look at this, I've always said, my BlackBerry's the one machine I wouldn't go anywhere without because of the reliability --
QUEST: -- this, that, and the other. Is this embarrassing for them? Is it damaging for them? Is it combination of everything?
PALMER: Oh, don't get me wrong, it is all of those things. It's embarrassing, it is damaging. But I don't think you can blame this particular technical problem on the company's management.
Management at BlackBerry is definitely not doing their job, and I think that the investors that you had on just previously made it very clear, they're not doing their job right, because we know management has been way behind the curve and not paying attention in class with respect to the market's needs.
But you know what? Technical difficulties and power outages -- service outages happen all the time. And one thing really has nothing to do with the other. They're -- believe me, if they could figure this out, they would have, and I don't think top-level management is down there toiling the machines.
QUEST: Shelly, we're always grateful that you come in and make sense of all of this. Many thanks indeed. Shelly Palmer joining me from New York.
And before we all beat up on BlackBerry, I suppose we do have to all look at our own individual businesses and ask, when did we last get something wrong and couldn't quite get it right in the time?
When we come back after the break, Jose Manuel Barroso, President Barroso, you heard him on this program the other night. He is a man with a plan. The Commission president takes center stage --
QUEST: -- after the break.
QUEST: President Barroso wants a permanent European bailout fund, and he wants it sooner rather than later. The ESM in 2012, not later than that.
The European Commission president says he wants more firepower to fix Europe's debt crisis. Its his comprehensive plan, which he outlined in Brussels. Our man looking at the plan is Jim Boulden.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Not the man with the plan, but I will try to explain it.
You know, we've heard all this talk, but today we finally got some details, and Mr. Barroso managed to pull all the threads together in Brussels today. He says this is the road map with five stops.
Number one, he says, of course, Greece must get the next bailout installment and that has to come quickly.
He also said you have to add real firepower to the ESFS. We did not get any real detail there, though, sadly.
He also called for a coordinated plan to prop up the banks through the ESFS, and he said, as Richard pointed out, that permanent bailout fund, the ESM, get ready for that one, could be introduced earlier, say mid-2012 instead of 2013.
He said overall that there can't just be firewalls in Europe. There needs to be firepower. Take a listen.
(BEGIN VIDEO CLIP)
JOSE MANUEL BARROSO, PRESIDENT, EUROPEAN COMMISSION: Stronger monitoring and surveillance could be included as part of the stability and respect.
But the ESFS must be more than just a firewall. It should have real firepower. We should maximize its capacity.
And to further consider the expression of unity and responsibility inherent in these crisis resolution mechanisms, we must accelerate the adoption and entering into force of the permanent ESM.
(END VIDEO CLIP)
BOULDEN: Now, of course, he's not the only president in Europe. There's also another president, the Euro Group president, Jean-Claude Junker. He has -- also came out with some ideas to help Greece. He did talk about a deeper haircut for the banks, and that's an interesting one. He is willing to say that.
He also said, again, there should be a transaction tax, that banks should pay for the next bailout with that transaction tax -- we heard that from Barroso earlier last week.
He talked more about fiscal union, economic government for Europe, and automatic sanctions if any country were to miss budget targets in the future.
A lot of companies -- a lot of people are talking about that tighter fiscal union and some sanctions for countries that do what Greece did.
Now, there was a third plan, not from a president of Europe, but from George Soros and a group of economists. And he called for action. He said that there must be a common treasury within Europe, and he called for a euro-wide banking regulator and euro-wide deposit insurance. Again, not just national governance.
He said there has to be clear rules on recapitalization of banks. We didn't hear a lot from Barroso about that today, but they want to hear clear rules on how banks will be recapitalized.
And he said no more nation-by nation decisions, Richard. He wants to see countries thinking about the Europe-wide situation and not do things that just best for their own economy.
QUEST: Please, get your calculator out and keep a track of the number of plans from man and the like.
QUEST: Many thanks. Jim Boulden. Now, one of the co-signatures of that Soros letter was Andrew Duff, member of the European parliament and president of the Union of European Federalists. Before we went on air, he joined me from Brussels, and I asked Mr. Duff why anyone should believe Europe's leaders were capable of getting it right this time, whatever the plan.
ANDREW DUFF, PRESIDENT, UNION OF EUROPEAN FEDERALISTS: Finally, the plans are coherent and joined up. First, start with Greece. After that, capitalize the banks.
After that, install federal economic government and appreciate that the creation of a fiscal union, the sharing of collateral, the mutualization of debt requires a thing we haven't had so far, and that is government.
I think that now Barroso has caught that idea. I think he's expressed it extremely well. And I do hope that he will carry the argument forward to President Sarkozy and Merkel.
QUEST: Finally, the issue is, really, everybody now accepts what the issue is. It's deal with Greece, recapitalize the banks, and look to the future of economic governance with and plot some growth.
Bite the bullet, Mr. Duff, it's time just simply to let Greece go default and deal with the consequences. That's what we're heading towards, isn't it?
DUFF: No. I think if we were to push Greece out of the currency --
QUEST: No, I didn't say that.
DUFF: -- the micron effect --
QUEST: I didn't say that. I said let Greece default and deal with the consequences.
DUFF: OK, OK. Yes, that's right. I think a managed default inside the family is probably a thing we are looking at. But the management of it is of critical importance, and I think we're starting to get that right.
QUEST: Isn't it time, then, for the executive side of the union to say what you have just said. Deal with -- get ready, deal with it, and get on with it.
DUFF: Well, I think so, and -- but I'm -- I think one has to respect here that there's a democratic process, too, and the bringing of national parliaments and political parties on to accept the scale of the crisis and of the changes that must be brought in to salvage the position is very difficult and it takes time. And it takes argument and debate. But we are now fiercely stuck into that debate.
QUEST: That's Andrew Duff joining me from Brussels a short while ago.
QUEST: That's the markets in New York, 11,500 on the Dow, very strong session. We had fed minutes out a short while ago, and they showed that policymakers are still very much in mind. If necessary, they will use quantitative easing. We'll get to those fed minutes and look at them further in detail.
When we come back in a moment, if you feel you spend your life in a fishbowl, trust me, it's nothing like this. The most incredible workplace you're ever likely to see, an underwater world at work.
QUEST: Sometimes sitting with all this blue around, I can often feel that perhaps I am in something of an aquarium. Just swimming our way around.
But what about those people who actually work in the real watery environment? A world away from the hustle and bustle, London Aquarium isn't just one of the city's top tourist attractions here. For the deputy curator, it's a chance to experience the majesty of the ocean each and every day, as it's all part of his World@Work.
JAMIE OLIVER, DEPUTY CURATOR, SEA LIFE LONDON AQUARIUM: I've been doing it for a long time, now, but it's still -- I still find it really, really exciting every time I get in there. It's a privilege to dive and swim with these magnificent creatures.
You always have to be sharp and on your best guard, but it's just -- every time, it's a real pleasure. It's amazing.
For my job, first and foremost, you have to have a real passion for it. It's not a normal 9:00 to 5:00 job. You can't walk out the door and leave things behind if something needs doing, if there's a problem.
One of my favorite aspects is really getting in the tank, doing some scuba diving with some of these amazing creatures I've got behind me.
I only have to go now in regular places to check the fish hole, check the hole for the sharks. Basically, things like cleaning the windows, making sure he looks good from the public -- from a guest point of view. Just interact with them is just amazing, really.
Oh, it's great. Very exhilarating. As you saw down there, you get so close to the animals.
Do I prefer animals to people? Definitely sometimes. They don't talk back to you.
The sharks do take a lot of care, and anybody that is employed here must go through a lot of special training to look after them, whether that's diving with them or feeding them from the surface, they're especially trained to come up and take food at different points at the surface.
We feed the Mako first. I'll feed them whiting, haddock, mackerel, squid.
Last year, when we had a female Zebra Shark in here, we played Barry White music underwater in the hope that it was quite relaxing and would maybe get them in the mood for mating. The male certainly attempted a few times.
So, having a few sharks here, letting people see them in the flesh and really appreciating how amazing and incredible these creatures are.
It's such a pleasure being in there with them, and seeing them that close, we're very lucky with the jobs that we do. So yes, we still get a real boost from it. It just -- to me, having dived this morning, I'm going to be on a high the rest of the day, really.
QUEST: That is what you call a different World@Work. And of course, it's only here on QUEST MEANS BUSINESS.
When we come back after the break, millions of BlackBerry users fume and fury, and all because you can't get your e-mails. How has the office in our pocket become entrenched in our lives? After the break.
QUEST: Hello, I'm Richard Quest.
More QUEST MEANS BUSINESS in a moment.
This is CNN. And on this network, the news always comes first.
The so-called underwear bomber is to be sentenced in January. He expects to spend the rest of his life in prison. The Nigerian, Umar Farouk Abdulmutallab,
Abdulmutallab entered a guilty plea to all the counts against him in a Michigan courtroom, in Detroit. He has admitted to trying to bring down a U.S. airliner two years ago with an explosive device in his underwear.
"Baseless and comical," that's how Iran's Revolutionary Guard Corps is describing accusations that they were behind an alleged attempt to murder this man, the Saudi Arabian US ambassador. a senior US administration official says Washington has a strong suspicion that the Quds Force commander was directly involved in the plot.
Myanmar has released dozens of political prisoners, including a famous dissident comedian. It's part of a general pardon for more than 6,000 detainees. Human rights activists say hundreds more remain locked up. The government is trying to appease critics.
Research in Motion continues to scramble to restore service to millions of BlackBerry users. The smartphones are down in the Middle East, Europe and Africa for a third day and it's now spread to the Americas. the company is blaming a core switch failure and a failure in the backup system.
What a fuss, what a hullabaloo. The current BlackBerry outage shows when it comes to technology, we can't live with it, we're addicted to it, and we can't live without it. You'll complain when your BlackBerry starts beeping during a romantic dinner and you'll complain when it doesn't beep at all.
QUEST: What this has shown us is something deeply psychological is going on.
And Robert Vamosi is the author of "When Gadgets Betray Us."
And he joins me now from San Francisco.
When we look, Robert, at this...
ROBERT VAMOSI, AUTHOR, "WHEN GADGETS BETRAY US": Yes?
QUEST: -- at this bizarre -- this out of control hysteria over the failure of BlackBerry, what do you make of it?
VAMOSI: Well, we saw something like this in the spring when the Sony PlayStation network shut down and millions of gamers were denied access to the Sony network. They reacted very strongly, as well.
It's -- it's something that we count on. We -- we want always on technology. And when somebody turns it off, for whatever reason, we -- we take it as an umbrage.
QUEST: Inside to one of the milennials who work on this program, I said, well, look, you can always make a telephone call. You can always...
QUEST: -- you know, you don't have to rely on the -- on the BlackBerry.
So have we become too reliant on these gadgets?
VAMOSI: We -- we have, because the work day used to be nine to five, Monday through Friday, and now that we've got these gadgets in our pockets, we're counted upon to be available at 12:00 at night, if necessary.
And so we've changed our lifestyles around these gadgets. These gadgets have influenced our lives.
QUEST: And as your book talks about, obviously, from a security point of view, but when these gadgets fail us, how do we respond, do you think?
VAMOSI: With shock. I -- I start the book off with an example of a young woman in England who used her boyfriend's GPS. And she did not believe that there was an obstacle on the road because it wasn't on the GPS. And yet, there was a train crossing right where her car was and she ended up losing her car, fortunately, not her life.
So sometimes the consequences of not having technology can -- and can impact your life.
QUEST: To those viewers watching who would say, oh, but I rely on it. It's -- it's the be all and end all. It's all -- I mean and you should see my Twitter feed. It's @richardquest, btw. It's -- it's blistering with people telling me how -- would you -- do you view what's happened today as a relief, it's given people a respite from the tyranny of urgency, or a crisis?
VAMOSI: Well, I think it's a great opportunity to step back and reevaluate our dependence on technology. And it's also an opportunity to look at all the configurations and stuff that we never bother to look at on our phones and -- and make sure that we're only enabling the services that we really need, because in many cases, our phones have other things enabled that we don't need.
So since you don't need to be sending your location data we need you take a digital photo. That's totally unnecessary and in a lot of cases, you can turn them off on smartphones.
QUEST: Well, Robert, thank you very much for the fact that you are obviously in the office today. We did, when we e-mailed you to speak to you, where -- otherwise, it would have been on the BlackBerry and we would have had trouble.
Many thanks, indeed, for joining us.
Robert joining us from San Francisco.
And, of course, you have been deluging me with your views. you can find us on Facebook or e-mail. And the e-mail address is quest@CNN.com. And it's Twitter, it's @richardquest.
When we come back in just a moment, a positive forecast from a leading global fashion business -- why Calvin Klein is confident of growth this year despite all the global economic problems. The chief exec of the company joins me here, in a moment.
QUEST: As business braces for possibly another global recession, certainly a downturn, Calvin Klein is one company that is confident of continued success. Today, the fashion company's parent, PVH Corp, announced its earnings for this year will be at the higher end of its guidance so far. Just over a moment ago, Calvin Klein posted a second quarter revenue rise of 19 percent.
The company is doing extremely well. This is more of the latest brand. I don't think that -- maybe in pinstripes for me, perhaps.
Anyway, joining me now is the chief executive of Calvin Klein, Tom Murry.
Good to see you.
TOM MURRY, PRESIDENT AND CEO, CALVIN KLEIN: Richard, good to see you.
QUEST: Thank you for coming in.
MURRY: My pleasure.
QUEST: We need to start off with the economic situation and the problems that are affecting companies.
What are you seeing out there at the moment?
MURRY: Our business is holding up well. You know, I'm -- I'm surprised, to some degree. We're -- we're doing well in the United States. We're doing extremely well in Asia. And our comps are holding up well in Europe.
We saw a little softening in the month of September, due, I think, really, this time, largely to weather.
But we're pretty optimistic about the continuation of strong business for the rest of the year.
QUEST: And are you having to, if you like -- I know not -- no one in business likes the word "discount" -- but are you having to slim margins to keep the traffic coming through, because you have lots of stores, you have lots of marketing (INAUDIBLE).
MURRY: Yes. No, our margins aren't really running higher than they have in previous years. We're running pretty close to plan. Our regular price sell-throughs are running about where we -- we expect them to generally.
So, so far so good.
QUEST: So what's your biggest challenge now, then?
MURRY: Well, you know, I always -- I'm always worried about a double dip. I'm always worried about any kind of a significant downturn in any major economy, an economic environment that we're doing a lot of business in.
But aside from that, you know, we have a very diversified product portfolio and a very diversified geographic portfolio so.
QUEST: How important is that, because, you know, I mean whether it's the -- sometimes I just think of the underwear side...
QUEST: -- seriously. But with a company, as our clothes over here show, the -- the company has much more than that.
So as chief, how important was it for you to diversify that range?
MURRY: Extremely important, you know, not only from a product standpoint, but the global international, if you look at it, as you well know, it's the multinationals that are doing the best in an environment like this. And that's really why we weathered '08, '09 as well as we did. We grew market share, significant market share, in '08 and '09.
QUEST: So you -- you've widened the brand, but you then also have to widen the market. And once you go into Asia and into these other markets, even with a Western premium brand, which is so prized -- we know this from Burberry, for example -- it's still amongst the most brutal trading environments.
MURRY: Well, it can be. It can be. But if you do the fundamentals, I mean we're fortunate enough to have this great global brand. We've spent billions of dollars, literally, the past -- over the past couple of decades, advertising the brand. As a result of that, we'll -- we're well known in every corner of the world. And we have a high image with consumers.
So now, that gives us the responsibility, it's incumbent upon us to fill in that white space on the ground. And the way we do that is additional product offerings, additional real estate, additional...
MURRY: -- points of sale.
QUEST: So what do you want to take yourself into?
And, more crucially, what would you not want to go into now?
MURRY: Well, there are certain distribution that we wouldn't want to go into. There are certain categories of product we wouldn't want to go into. What we focus on the most is continuous improvement in everything we do. The most important thing we do is provide great products and great execution.
MURRY: And that's what we think about every day.
QUEST: Where -- where are you based?
You're based in -- in...
MURRY: In New York City, in the same building...
QUEST: And you need to do...
MURRY: -- where our company was founded.
How was the BlackBerry today?
MURRY: I think I made more phone calls today...
MURRY: -- than I've made in probably the last year or two so...
MURRY: -- it still works, the phone.
QUEST: But as chief exec, isn't it time for you to say to your staff, stop being so reliant and pick up the phone and speak?
MURRY: I say that all the time anyway. I say there is no substitute for face-to-face. And sometimes the BlackBerry can be the enemy.
QUEST: We thank you for coming in.
MURRY: Richard, my pleasure.
QUEST: Thank you.
MURRY: Thanks for
MURRY: It's good to see you.
QUEST: Thanks, indeed.
Now, we need to talk a little weather and sunny skies, mild conditions in parts of Western Europe -- in fact, Pedram, I even left my overcoat at home today.
PEDRAM JAVAHERI, CNN METEOROLOGIST: Oh my goodness. Well, good call, Richard, because conditions there, as you said, are going to improve. And the overcoat, at least you can pack it away for perhaps a couple of days across portions of Western Europe. We're having high pressure build here across areas to the south. And that's going to expand to the north in the coming couple of days.
But as of this hour, a few showers across Southern Germany, a few stronger thunderstorms out across the Black Sea. And besides that, we're going to see conditions begin to improve.
There you go. There was a bit of showers as they're working their way across Central and Southern Germany.
But the high pressure is to the south. A big bloom. We like this right here. It causes the air to sink. It compresses the air and it warms it up. It deflects the storm track. So storms like this are going to begin to work their way north of the U.K. over the next couple of days and really Thursday on into Friday, especially Friday afternoon, and eventually by Saturday afternoon, we're looking at some of the warmest temperatures you've seen across Western Europe in about a week and a half or so.
So we'll call it mostly sunny and mild.
But before we get there, conditions are going to be a little cooler across areas around Munich, where these showers are beginning to move in and also around Kiev. Temperatures cooling off to about eight degrees as of this hour. And if you've got travel plans, a low ceiling associated with these storms. You're going to see 30 to 45 minute delays possible for now Brussels to Frankfurt, across portions of Glasgow, possibly. The low clouds going to inhabit travel, at times, on Thursday.
And besides that, we're going to see improving conditions across portions of Western Europe.
But I want to tell you about something.
Remember we were bringing up that U.R. The Upper Atmospheric Research Satellite back in September, one of the satellites that was dying and being decommissioned and coming back down to Earth?
Well, we've got another one. This is the ROSAT Satellite right here. This actually is a collaboration between Germany, the U.K. and the US. It uses x-ray telescopes. But it is projected to reenter our atmosphere between the 20th and 25th of October, somewhere between 53 degrees north, 53 degrees south. And the debris with this about the size of a school bus. The debris with this weighs 2.6 tons. We think from 1.6 -- 2.4 tons. And we think some 1.6 of those are still going to make it to Earth here. And they're saying that a one in 2,000 chance of it hitting someone.
But I want to share with you the -- the current perspective, because we have the satellite track up. There it is right now across portions of the South Pacific. And you can see the trajectory of where it could possibly end up.
And, again, Richard, they're saying between 57 north -- 53 north and 53 south. So that encompasses just about everyone on Earth, with the exception of portions of, say, Scandinavia on into Russia and also Canada and Alaska.
So it will be interesting to see what comes out of this. But another thing to be looking in the skies for in the coming days.
QUEST: Oh, I shall be keeping a very close watch.
Many thanks, indeed, Pedram.
QUEST: Now, coming up in a moment on The Boss, there are new warehouses and new countries on the horizon. Your appointment with the boss is after the break.
QUEST: You can pore over all the little details as much as you like, but being at the top, being the boss, is all about thinking big.
Sarah Curran, for example, now, she isn't afraid to upgrade by moving my-wardrobe's warehouse for the third time. That's quite an -- an undertaking.
Meanwhile, Sean Cornwell is expanding his eHarmony empire.
Making these decisions and deciding when it's time to grow, it's all part of being the boss.
UNIDENTIFIED MALE: (voice-over): Previously on The Boss, bottling bliss and your bottom line -- eHarmony's Sean Cornwell outlines his strategy for the year ahead.
SEAN CORNWELL, VP INTERNATIONAL, EHARMONY: I think that the time has come now to become truly local in each market.
UNIDENTIFIED MALE: And after bottling it up, Sarah Curran admits she can't have it all.
SARAH CURRAN, CEO, MY-WARDROBE.COM: I think over the last six years, it's been a managing of guilt, one way or another. I either feel guilty that I'm not spending enough time with Jake or I feel guilty that I'm not, you know, spending all that much -- doing enough with work.
We're in Nottingham, which is two hours away from London. We moved into this particular location in January, 2009. And already, we're starting to sort of feel that we might be running out of space.
UNIDENTIFIED MALE: That was November of last year. This is now -- a new warehouse for my-wardrobe.com -- 38,000 square feet of it, with space and light aplenty. Getting here wasn't easy. It took my-wardrobe three days, 36 truckloads and 25 people to move more than 49,000 items -- a big move for this boss, but one that needed to be made.
CURRAN: When you're looking at a growth plan and your strategy, what we didn't want was to get to a stage where we'd been the first time with the first unit, where the production -- the product -- the productivity was completely flat, because, actually, you can't work and the teams can't work in the environment because it's too crowded.
UNIDENTIFIED MALE: Today, Sarah is surveying the new space with her warehouse manager, Sue Ault.
SUE AULT, WAREHOUSE MANAGER, MY-WARDROBE.COM: They've put them (INAUDIBLE).
CURRAN: I know.
UNIDENTIFIED MALE: She's paying close attention to how her team is using the unit.
AULT: Eventually, we put it into the cages and then they pack.
UNIDENTIFIED MALE: How items are being packed...
AULT: Watch how they close the handles and it handles and it (INAUDIBLE) the base to (INAUDIBLE) the problem.
UNIDENTIFIED MALE: And whether the space is improving productivity.
CURRAN: The flow of work isn't (INAUDIBLE). It is (INAUDIBLE).
UNIDENTIFIED MALE: For Sarah, this is a strategic move.
CURRAN: When it seemed picky and I just told them where to go get it...
UNIDENTIFIED MALE: She knows to keep up this rapid growth, her operational side needs to keep pace.
CURRAN: The business is growing up. And it needs to because, you know, you can't go to the next strep -- stage of development and the next stage of turnover in volume without, you know, really sort of having the approach and the path really stabilized and in a position where it can grow and can grow at speed.
UNIDENTIFIED MALE: Since its launch in 2006, Sarah has moved warehouses three times, relocating from a 4,000 square footage unit to 8,000 to its current space of 38,000 -- a sign of fast growth and one of success.
CURRAN: I remember the first time I drove up and I saw the cars in the car park. And I just thought, oh my goodness, this is my -- it's -- it's, yes, it's really weird when you see your -- your sort of business grow like that.
UNIDENTIFIED MALE: Meanwhile, 200 kilometers south of Nottingham...
CORNWALL: This is all really about fundamentally answering that question, how do we build an iconic brand in our international markets?
UNIDENTIFIED MALE: Sean Cornwell, the international vice president of eHarmony, is trying to follow in Sarah's footsteps -- grow the business and do it fast.
CORNWALL: Now is the time to take that leap and go toward developing this folk (ph) local creative, which is made and produced specifically for the U.K. and the Australian market.
UNIDENTIFIED MALE: Today, he's doing just that -- taking that leap into new markets. Getting there and staying there, however, requires research, insider understanding of the market and, most importantly, teamwork.
CORNWALL: The main topic that we're going to cover in this meeting is the development of international creative for our English speaking markets, U.K. and Australia.
(BEGIN VIDEO CLIP FROM EHARMONY COMMERCIAL)
UNIDENTIFIED MALE: The first kiss was...
UNIDENTIFIED FEMALE: It was great.
(END VIDEO CLIP)
UNIDENTIFIED MALE: For years, eHarmony has relied solely on U.S. advertising to spread its message of love.
(BEGIN VIDEO CLIP FROM EHARMONY COMMERCIAL)
UNIDENTIFIED MALE: It was so natural. It was so good.
UNIDENTIFIED FEMALE: Yes.
UNIDENTIFIED MALE: And they're still good.
(END VIDEO CLIP)
CORNWALL: We brought over footage for a U.K. voice-over or an Australian voice-over on it and gone down that route.
(BEGIN VIDEO CLIP FROM EHARMONY COMMERCIAL)
UNIDENTIFIED FEMALE: It's incredible the sort of people you can meet that, you know, you just wouldn't meet otherwise.
(END VIDEO CLIP)
UNIDENTIFIED MALE: Now, with the company's expansion into international markets, Sean is looking to strike a chord with local consumers, with local advertising that is authentic and culturally aware.
(BEGIN VIDEO CLIP FROM EHARMONY COMMERCIAL)
UNIDENTIFIED FEMALE: We work in the same company. We got matched and we got on well on our date.
(END VIDEO CLIP)
CORNWALL: It's a big step for us as a company. It's a big step for us as an international business. It's a big vote of confidence from the U.S. in our international markets. And it's really exciting. We're not the typical online dating site.
UNIDENTIFIED MALE: Sean has thought through every step of this expansion. And he's starting with advertising spots in the markets he knows best, the U.K. and Australia, a measured step by a boss who had everything to prove.
CORNWALL: We have a good culture at eHarmony. I mean I think there's a culture of taking sensible risks. We hope and think that, you know, this creative campaign, this direction that we're going down is the right one. But only time will tell.
UNIDENTIFIED MALE: Next week on The Boss...
FRANCIS LUI, VICE CHAIRMAN, GALAXY ENTERTAINMENT GROUP: If you ask me that we should have get it back and we'd do it again, I want to make the pool even bigger.
UNIDENTIFIED MALE: Frances Lui looks for room to improve and room to grow.
That's next week on The Boss.
(END VIDEO TAPE)
QUEST: The Boss, of course, only.
Now, some of your Tweets. Earlier today, I did Tweet the message or the thought, is it a relief, actually, that a BlackBerry outage has happened for those of us who may be using BlackBerrys, should we be relieved that, for at least a while, we're no longer part of the tyranny of the urgent e-mail. @richardquest was the e-mail address.
Here's some of your responses.
From Joyson (ph). She says: "It feels like a temporary losing of the ball of the original BlackBerry chain. I know it's there, it's latent and it's weightless. I shall cherish it."
Another one: "My BlackBerry loyalty is in question once again," says Quel Chesley (ph).
Melvin Hall (ph): "Everyone too self-reliant on technology and social networking. I tried explaining this in the 1990s to my daughters and I failed."
And finally, Abakari (ph) says: "It seems like everyone has been affected in the U.S., too."
So that's the way -- @richardquest. There's still time for you go get me a Tweet or an e-mail through.
Starting on Thursday, that's just 24 hours from now, in fact, about now, CNN and meself will put a spotlight on one of the world's most influential and interconnected continents. It's "MARKETPLACE EUROPE" from Germany's role as a driver of stability in the region, to issues facing the continent like the Eurozone debt crisis.
I'll be talking to business leaders, decision-makers. Tomorrow, you'll hear from Angel Gorilla (ph) of the OECD and (INAUDIBLE) Barroso, president of The European Commission.
It is "MARKETPLACE EUROPE." Forgive the plug. It happens tomorrow at this time.
When we come back after this short break, some thoughts on a Profitable Moment about BlackBerry.
(BEGIN VIDEO CLIP)
STEPHEN BATES, U.K. MANAGING DIRECTOR, RIM: At this stage, we understand the frustration our customers have, because BlackBerry is used as a communication vehicle for people to connect with their friends, their family and their work colleagues. So we understand the importance of that system working in real time.
And we -- we do see some improvements. We have seen a marked improvement in the throughput of both business and consumer e-mail through our systems. And we still don't think we're out of the woods yet. And our team is working -- is going to continue working night and day until we can get to that resolution point.
(END VIDEO CLIP)
QUEST: A long way of saying I'm sorry.
Tonight's Profitable Moment.
You may have noticed your workaholic friends acting a little strangely. In offices around the world, people are looking nervously. They're making anxious phone calls.
What could have caused this global nervousness?
Another flash crash, a stock market meltdown?
No, no, no.
Push e-mail is not working. Now, hang on a second.
Are we being serious here?
My friends and colleagues have been cueing up with their sob stories about how BlackBerry problems have ruined their days, how missed e-mails or BBMs came within a whisker -- ah -- of destroying careers.
Now, I don't deny BlackBerry is important. I use it everyday. Nor can anyone say it isn't damaging for RIM.
Are we so reliant, so enslaved by BlackBerrys that a few days' disruption can turn us into quivering wrecks?
When all is said and done, just pick up the phone.
And that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I hope it's profitable.
The news continues on CNN.