RIM Readies New Touchscreen BlackBerry

Research In Motion is not known for its dramatic flair. Like the BlackBerry itself, with its renowned email security, the Canadian smartphone maker seems to put function before form.

But RIM may break with tradition next Tuesday when it raises the curtain on its long-awaited answer to the iPhone at an unusual company “event” in midtown Manhattan.

RIM is not saying why it has asked reporters and analysts to gather at the invitation-only event, which may be the company’s attempt to capture some of the frenzy Steve Jobs creates around Apple’s product launches.

“I think they are trying to create a little drama,” said Michael Gartenberg, Partner, Altimeter Group. “When you raise expectations like that, you really then have to deliver.”

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In another bold gesture, RIM appears ready to announce that it will do battle with Apple on its home turf by giving AT&T, the sole U.S. iPhone provider, exclusive rights to sell the new BlackBerry in the United States.

RIM won’t comment, but its invitation prominently displays AT&T’s logo alongside its own.

That would mark a tactical shift since RIM teamed with AT&T’s bigger rival, Verizon Wireless, for the high-profile launch of its first touchscreen phone, the Storm, two years ago.
DEVICE NEEDS TO BE “BIG SUCCESS”

For RIM, the stakes are enormous as it sets out to recapture the BlackBerry’s faded glory and maintain its dominance in the North American smartphone market.

The new device, if bloggers and analysts have it right, will feature a touchscreen as well as a full slide-out keyboard, a revamped operating system, a more user-friendly browser and other features that consumers want and older BlackBerry lines sorely lack.

The aim is to close the gap against the iPhone and handsets using Google’s Android software, such as Motorola’s latest offering, the Droid X.

“RIM is in a heated battle against Apple on AT&T for the wallets of consumers and, increasingly, consumers matter to smartphone makers,” said Kevin Restivo, Senior Mobile Phone Research Analyst.

“If RIM is going to gain significant share with consumers and maintain its No.1 position overall in North America, it needs this device to be a big success.”

Analysts say RIM’s shift to AT&T appears a savvy strategy for this critical product push. AT&T uses the same GSM standard as an estimated 75 to 80 percent of the world’s wireless networks, which means the new BlackBerry can move quickly into high-growth international markets.

“It’s a quicker path to return on investment when you launch a GSM phone, because you can sell it to multiple carriers across the globe,” said Dushan Batrovic, Analyst, Dundee Securities.“It should be significantly better than what RIM has in the existing BlackBerry portfolio right now, so those 50 million or so BlackBerry subscribers … should be very pleased.”

RIM’s decision to turn to AT&T may also reflect Verizon’s recent focus on phones based on Android, which have gained sales momentum over the past year. Verizon has marketed them aggressively.
MARKETING MUSCLE

The new RIM phone has been dubbed the BlackBerry 9800 by gadget websites, but the company is expected to announce a snazzier official name at the New York unveiling.

Images purporting to be the new BlackBerry have been plastered all over the Internet and the company has already made announcements about a new operating system. So the industry is not holding its breath over core phone features.

When they finally get their hands on the device, analysts will look for any new features that trump what rivals offer, such as video presentation, a key iPhone selling feature. RIM may bring compressed file efficiency to video, for example.

There is also suspense about how RIM and its partner will market the device and whether consumers will warm to it.

Some expect AT&T to put major marketing muscle behind the new BlackBerry. With speculation rife that it may lose its exclusive U.S. rights to iPhone next year, AT&T should diversify its offerings and lessen its dependence on iPhone, analysts say.

“It’s going to be interesting for us to watch the kind of marketing push they put behind this launch - it might give some signals,” said Jeff Fidacaro, Analyst, Susquehanna Financial Group. “If they’re going to lose the iPhone, and they know this for sure, they may be very aggressive.”

RIM is seen later expanding distribution of the phone to other carriers and launching updated versions of other models with Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc, which uses a CDMA standard. RIM sells phones through more than 500 carriers globally, while Apple uses roughly 150.

Kaufman Brothers Analyst Shaw Wu expects CDMA versions of RIM’s new phone, which will feature an updated operating system called OS 6, to ship three to six months after GSM versions.

The biggest question is whether RIM is too late to the party with a phone that likely catches up to rivals but won’t leave them in the dust. Opinions vary on that point, but analysts agree the phone is critical to RIM’s future.

“The 9800 will be a competitive counter-punch to the iPhone, on RIM’s part, to gain share specifically on AT&T,” said Restivo. “RIM absolutely has to have a flagship or a killer device on that network.”