The Sidekick phone emphasizes its social connectivity , so the personal data is particularly important to most owners. Sidekick's data is maintained by a company appropriately named Danger, a subsidiary of Microsoft. For more than a week, the phones have been suffering data outages, and there have been reports of some users trying to reboot their phones by removing the battery -- which erases saved info on the device.

A joint statement said T-Mobile and Microsoft/Danger "express our apologies" for the wipeout.

'An Unmitigated Disaster'

Apologies may not be enough for the estimated one million T-Mobile Sidekick customers. Avi Greengart, an analyst with industry research firm Current Analysis, called the episode "an unmitigated disaster."

In fact, he said, "this may prove to be a fatal blow to the Sidekick brand." Greengart pointed out that this was "much worse than just a service outage."

At the very least, he said, Sidekick will take a "very large hit," but it may well turn out to be a final hit. The phone is already facing serious competition, he noted, from "flashier smartphones" such as Motorola's CLIQ, which has more to offer the same young customer who wants a socially connected device.

"I wouldn't buy a Sidekick today," he said, adding that T-Mobile will survive this disaster even if the device doesn't.

Greengart said a big reason that the episode is such a head-slapping failure is a rumor he's heard that Danger didn't have a backup for the servers that went down. "I've been hearing from a lot of IT people, from small shops and from Fortune 500 companies, that there must have been no backup," he said, adding that such basic caution is "IT 101." Neither Microsoft nor Danger have released details about whether there was a backup.

If a Backup, the Loss 'Makes No Sense'

If there was a backup, he said, the loss of data "makes no sense." Greengart noted that, ironically, Microsoft said when it bought Danger last year that it did so because of Danger's experience in cloud computing.

In the joint statement, Microsoft/Danger and T-Mobile said its teams were working "around the clock in hopes of discovering some way to recover this information." However, it noted that the likelihood of doing so "is extremely low." It offered a page of FAQs with tips on how to rebuild address-book contacts.

The statement also advised customers not to reset the devices by removing the battery or letting the battery drain completely, as any current content on the device would be lost.

The Sidekick wipeout may also be a wake-up call for the cloud-computing industry, which is growing by leaps and bounds as companies and individuals trust online vendors with their data. Most users assume that such vendors are backing up the data, but disasters such as the Sidekick episode may lead customers to look more carefully at their agreements.