BlackBerry maker targets wider consumer market
Two years ago, Research In Motion Ltd. dipped its toes into the consumer market with the BlackBerry Pearl and made a huge splash, selling roughly 10 million devices. Now, analysts are expecting yesterday's release of a flip phone version of the Pearl to be the Canadian tech company's next big wave in the giant Main Street cellphone market.
Along with the BlackBerry Bold device targeting the high-speed wireless market, the new BlackBerry Pearl Flip, one of the worst-kept secrets among gadget enthusiasts, is RIM's first attempt to corral some market share outside its traditional stronghold of business customers.
"Seventy per cent of the mobile phone users in the United States use a flip," Jim Balsillie, RIM cochief executive told Reuters. "There's never been a smartphone or a BlackBerry option for that."
With two new BlackBerry devices released and up to five more consumer-friendly devices estimated to be unveiled in the next year, the Waterloo, Ont.-based company's focus is dramatically shifting from the business world toward building the brand as the standard smartphone platform for the consumer, Research Capital analyst Nick Agostino said.
"With every one step they're taking into the enterprise market, they're making three into the consumer," said Mr. Agostino, who has a "buy" rating and a US$175 target price.
Cellphone stalwarts Motorola Inc. and Nokia Corp. are losing handset market share as more subscribers migrate to such smartphones as the BlackBerry and Apple Inc.'s iPhone, which feature multimedia offerings but are generally more expensive.
RIM's way of maintaining pressure on the global handset market is the Pearl Flip, which combines the same SureType keyboard originally introduced on the Pearl device with the comfort and functionality of a clamshell cellphone popularized by Motorola's RAZR devices. The device is expected to retail between US$50 to US$150 depending on the data plan and contract.
RBC Capital Markets analyst Mike Abramsky said RIM is going to steal market share from its lower-margin competitors while maintaining its strong financial position.
Investors finally had a reason to cheer RIM after seeing its stock on the Toronto Stock Exchange fall 21% since Aug. 27. RIM shares rose 6% to finish yesterday's session at $112.36.
Industry observers speculate RIM could sell anywhere between three million and seven million BlackBerry Pearl Flip devices in its first year of availability if the company manages to attract enough cellphone carriers interested in offering customers a low-cost BlackBerry model.
"RIM delivers high quality customers to the carriers ... and there's probably a much higher loyalty factor among BlackBerry users than there are with other handset makers," said Forrester analyst Charles Golvin. "If you can get that with the Pearl Flip, it'll be more difficult to pry it apart [from them]."
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LOOK AHEAD:
More BlackBerrys to come?
Thunder/Storm The buzz behind RIM's entry into the touchscreen world keeps growing since word earlier this year the device was in production. After a YouTube review video was posted yesterday, the blogosphere was quick to condemn the prototype. Expect RIM to fix the bugs in time for a hoped-for fall, 2009, release.
Touchscreen Slider Fuelled by a number of patent designs, analysts have speculated RIM will release a touchscreen device with a slide-out keyboard next year.
Javelin Images of the next-generation of RIM's highly popular BlackBerry Curve have popped up on gadget sites but will include many of the same functions that came with the BlackBerry Bold, such as 3G and better multimedia features.
3G Pearl Analysts also expect a high-speed update of RIM's highly popular Pearl "candy bar" smartphone.
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