Planned intro of ‘iPhone killer’ drives RIM’s stock

By Reuters
Posted July 28, 2010 at 2:27 p.m.

Shares of Research In Motion jumped Wednesday on speculation it would unveil a new touch-screen BlackBerry that could compete more effectively with Apple Inc.’s iPhone and other smartphones.

RIM is expected to announce the launch of the BlackBerry 9800 at a joint event with AT&T Inc. in New York Tuesday. AT&T is expected to get exclusive U.S. rights to sell the device.Industry watchers say the 9800 will boast a new operating system, a revamped Web browser and slide-out keyboard — features designed to revitalize a product lineup that critics say looks out of date.

A smooth launch is critical for RIM, analysts say. Its stock has fallen by a third in the last year as the iPhone and devices running on Google Inc.’s Android software eat into its share of the key North American market.

For RIM, the timing of the event seems fortunate. Apple has made a rare misstep with the launch of the new iPhone 4, with complaints about the model’s antenna design putting the company on the defensive. That may allow the 9800 to steal the spotlight, however briefly.

“This is an opportunity for RIM to respond, not only on the operating system and browser-side, but equally importantly, that they have a nice smooth operating piece of hardware,” Mackie Research analyst Nick Agostino said.

The 9800 is viewed as RIM’s bid to silence its own critics, who have complained about a clunky Web browser, a humdrum applications store and a product lineup missing a compelling touch-screen device.

RIM’s overseas sales have grown steadily, but gains have come largely from sales of low-end devices that have weighed on the company’s average selling price. RIM is also facing more competition within its once-secure business enterprise segment, as some companies are allowing employees to swap BlackBerry devices for other smartphones.

Shares of RIM rose as much as 4.5 percent Wednesday but by early afternoon were off their highs at $55.20 in New York, a gain of $2.02, or 3.8 percent.

Analysts expect RIM to officially take the wraps off the 9800 Tuesday and announce that it will be on the shelves in the middle of August in time for the lucrative back-to-school period.

“The earlier they are going to say it is going to be available on the shelves the better. They don’t want to miss one of the key seasons,” said Avian Securities analyst Matt Thornton.

RIM declined to comment.

The Waterloo, Ontario-based company gave a sneak peek of its new operating system, modern interface and what promises to be a fast, accurate and easy-to-use Web browser in April and said a launch would come before the end of August.

Images and pictures of what purports to be the 9800 device have since popped up on numerous blogs.

AT&T initially is expected to get exclusive U.S. rights to sell the new BlackBerry handset, analysts said. The company also has the exclusive franchise for the iPhone in the United States.

“We expect the new RIM slider to receive ‘hero’ treatment from AT&T, and for the carrier to promote the product aggressively,” Morgan Stanley analyst Ehud Gelblum said in a note to clients.

The handset is likely to be launched in Canada and Western Europe later in the year, possibly October, in time for the holiday season, Avian’s Thornton said.

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  1. hotheaded_turdburglar July 28, 2010 at 11:46 a.m.

    I just googled some pictures of this new phone. 3.2″ low resolution screen is going to be an “iphone killer”??

    This phone looks like it dropped out of a wormhole connecting us to the year 2006. I really hope Blackberry isn’t staking their future on this one, because it’s a brutal device.

  2. KING_PIN July 28, 2010 at 12:15 pm

    It’s not a I Phone killer
    It’s not even a thiller.

    It’s more like a glorified Crackberry.

    Don’t Believe The Hype.

  3. D Palmer July 28, 2010 at 12:15 pm

    Stop with the “iPhone Killer’ nonsense. RIM is introducing an iPhone competitor (sort of).

  4. Donna July 28, 2010 at 12:27 pm

    I hope it’s an improvement over the slow, clunky blackberry storm I have now.

  5. Chicagoan July 28, 2010 at 12:37 pm

    The only thing this might kill is the willingness of IT staffs who support Blackberry right now to also adopt the iPhone — they’ll point to this device and tell the employees they don’t need an iPhone. Blackberry doesn’t put a dent into Apple’s consumer sales, they’re all about enterprise sales, and Blackberry still kicks the crap out of Apple there due to focus and the supposed superior security of the Blackberry devices versus the iPhone.

    Unfortunately for the employees, who only use the device in hand and don’t see the security, the iPhone is a much better product to use. Same drill with an Android device – much better than the current Blackberry devices. Blackberry doesn’t need something better than an iPhone/Android, it needs something close enough so that the drumbeat of employees demanding the iPhone or Droid quiets down enough that IT staffs still stick with Blackberry support only.

    If Blackberry wants to compete in the consumer sales market though, they’ll need to be at least as good as the iPhone since this device is also apparently going to be tied to AT&T. Color me skeptical that this device will do so.

  6. Steve July 28, 2010 at 12:46 pm

    WHats the big deal with this phone? I just got rid on my Blackberry 8900 for an iPhone because the iPhone will allow easy access to Outlook Exchange mail. If you have a blackberry you must have an enterprise account and your email admin has to set everything up. It is a pain. With the iPhone – no problems at all and its a much better phone.

    RIM needs to wake up because Blackberries are turning into dinosaurs.

  7. MarkRG July 28, 2010 at 12:49 pm

    Any terminology that claims iPhone ‘insert your word here’ in comparing another phone is so overused now it’s becoming irrelevant.

    A device that is superior to an iPhone won’t have to go around touting itself as one, it will become one just by existence alone.

    Strike one is it being tied to AT&T, which is already the boat anchor for iPhone users. Good luck getting a 3g signal outside of major urban areas.

    But Chicagoan has it right already and why RIM wastes time trying to market their devices to non-enterprise market baffles me.

  8. Mike July 28, 2010 at 12:54 pm

    How about the fact that AT&T sucks? Isn’t that the biggest complaint of iPhone users that you have to sign up with AT&T? I have an iPhone which I generally love, but I’m considering getting something else because AT&T coverage is pretty bad. My phone does everything I could ever want except make reliable phone calls.

  9. KPO'M July 28, 2010 at 12:58 pm

    Is RIM calling this an iPhone killer or is this more media hype? Obviously RIM thinks it is a good phone or they wouldn’t be selling it, but the problem with the “iPhone killer” hype is that it sets unrealistic expectations. The phone market is big enough for both Apple and RIM.

  10. Mark S. July 28, 2010 at 1:23 pm

    I’m tired of Verizon employees masquerading as iPhone users to blast AT&T.

    In Chicago, AT&T’s coverage is better than any other providers, with speeds of 7.2 mbs. Verizon can’t match that.

    And let’s face it, the iPhone isn’t really a phone. It’s a minicomputer that makes phone calls. The latest antenna fiasco just shows that the phone portion of this device is a secondary function in Apple’s mind.

  11. 8BallSaysYes July 28, 2010 at 1:41 pm

    The only thing this Blackberry is “killing” is AT&T’s exclusive contract with Apple. “We expect the new RIM slider to receive ‘hero’ treatment from AT&T, and for the carrier to promote the product aggressively”. This statement can only tick off Apple as AT&T embraces another phone that is being positioned as a direct competitors to their cash cow. To me this is another indication that AT&T is shoring up for the departure of the iPhone to other carriers – TMobile and Version. If not, they should.

  12. cindypotter July 28, 2010 at 1:42 pm

    iPhone Killer… not again. FAILED

  13. Jerf July 28, 2010 at 1:44 pm

    Man, I thought this story was going to be about someone being bludgeoned to death with an eyePhone. Snoozers….

  14. Stan July 28, 2010 at 1:50 pm

    I used to use a Blackberry before upgrading to an iPhone last year and (much like Windows is a mediocre copy of the Mac OS X), was OK but not close to what Apple provides (and I am no Apple fan boy- just go with the best product available). I am skeptical but will keep an open mind. If anything, Droid is closer to being an iPhone killer.

  15. Phil July 28, 2010 at 2:12 pm

    This is great news for those of us that use T-Mobile and are waiting for Apple to, once and for all, boot their exclusivity agreement with AT&T now that AT&T has found a new dance partner.

    Perhaps soon I’ll be able to dump my BB 9700 for an iPhone!!!

  16. Right here July 28, 2010 at 2:18 pm

    Mark S.
    Then Apple should call it something else other than iPhone, don’t you think?

  17. MarkRG July 28, 2010 at 2:32 pm

    “I’m tired of Verizon employees masquerading as iPhone users to blast AT&T.”
    Not even close. You couldn’t pay me to work for any cellphone carrier.

    “In Chicago, AT&T’s coverage is better than any other providers, with speeds of 7.2 mbs. Verizon can’t match that.”
    It’s not the speed, it’s the signal strength. I live in a very near suburb and the Nokia flip provided by where I work doesn’t get signal in my home. I have to go outside and even then it’s sketchy. Same here at work. How fast the data goes is irrelevant if there’s no signal.

    In my travels it is my very clear impression that AT&T really focused on the major city urban areas where there are the highest percentile of subscriber addresses.

    Well, gee, what happens when those subscribers actually go mobile away from there with their phones, hm? It goes to E with it laugh-at-it mbs, or just as often no signal whatsoever, nice mobility, that. They need to find a better balance between actual area coverage and speeds.

  18. mike July 28, 2010 at 2:38 pm

    There have already been 2 “iPhone killers” from a technical perspective: the Pre and the Droid.The problem is marketing: Apple still has the ignorant masses convinced that iPhones are the best product on the market. Until someone out markets Apple, that won’t change. Apple is a marketing entity first, and a company that happens to make OK devices second.

  19. mike July 28, 2010 at 2:39 pm

    “In Chicago, AT&T’s coverage is better than any other providers, with speeds of 7.2 mbs. Verizon can’t match that.”

    That means nothing when you can’t get a signal, and AT&T’s coverage in Chicago is abysmal.

  20. Phil July 28, 2010 at 2:42 pm

    Good point RG. While T-Mobile is 3rd in number of subscribers, I have RARELY had issues with signal and when in Europe, well, T-Mobile dominates! Additionaly, their customer service actually provides service, at least they have been quick to resolve any of the few issues I’ve had over the last 10 years.

    No, you couldn’t pay me to use AT&T and Verizon’s plans are rediculously expensive.

  21. John July 28, 2010 at 2:48 pm

    As once who hasn’t had the opportunity to use the iphone, yet, all I can say of Apple in general is from a quote that Bill Gates made years ago:

    “When the Windows OS is perfected it will be a Mac”.

  22. That Guy July 28, 2010 at 3:55 pm

    iPhones are for blathering, illiterate teenagers and 20-something burnouts. No serious businessman would ever use one.

  23. Brent July 28, 2010 at 3:56 pm

    AT&T gets “exclusive rights” to sell the new Blackberry? What if you like the Blackberry brand, but live in an area where AT&T coverage is less than desirable?

  24. Al langevin July 28, 2010 at 4:36 pm

    As a Blackberry Bold and AT&T customer I can verify that AT&T absolutely sucks. I have had hundreds of dropped calls since I was forced to go to AT&T (the Bold also uses AT&T like the iPhone). AT&T sucks. Wanna browse and talk? How about just talk without getting your call dropped.

  25. Ed Deline July 28, 2010 at 4:39 pm

    That Guy: You’re wrong and you know it. I’m starting to see more and more iPhones in corporate circles. Whereas once they were a novelty, now they are commonplace. Its sort of the beauty of the iPhone, they work great if you’re a blathering illiterate teenager, to use your eloquent language, as well as a busy professional. Maybe you don’t like iPhones, and that’s cool, but it doesn’t mean “no serious businessman would ever use one.”

  26. inigo montoya July 28, 2010 at 4:54 pm

    Unfortunately there are millions of people who would buy an abacus with an iPhone label on it. Apple is laughing all the way to the bank on the backs of its loyal sheep — er, I mean customers.

  27. Ellen July 28, 2010 at 5:40 pm

    “iPhones are for blathering, illiterate teenagers and 20-something burnouts. No serious businessman would ever use one.”

    Well, given what “businessmen” have done to the economy maybe we could use a little more Snookie.

  28. Alex July 28, 2010 at 5:44 pm

    I find the criticisms of the iphone a bit laughable, especially since all other manufacturers are tripping over themselves trying to replicate it . . . including the “businessman’s favorite” Blackberry.

  29. Bhab July 28, 2010 at 9:37 pm

    I don’t know why they would give AT&T exclusive rights, that’s the big complaint with Apple devices. While reception is mainly fine for me here around Chicago, on a recent trip to Michigan, I only got 3G coverage near Detroit. The entire rest of the state I only got Edge coverage. We were driving thru big thunderstorms, and the weather map couldn’t keep up with our driving to show me what lay ahead. Similarly, while in Effingham in central Illinois, a relatively large city, no 3G coverage either. Maybe with their business focus, BB thinks having reception in big cities is enough.

  30. ASD July 30, 2010 at 4:58 a.m.

    When you regularly can’t drive from downtown on the Kennedy to the North suburbs via the Edens without dropping calls at least twice along the way — usually by the “Morton Salt” curve at Division and at the Junction with the Edens (and sometimes more) — or via Lake Shore Drive from Grant Park to Hollywood without dropping at least once between Navy Pier and Oak Street Beach, you can’t call AT&T’s reception fine in Chicago. Strange thing is, the places my iPhone drops are pretty much the same places my old Motorola flip phone used to drop back when the company was Cellular One more than a decade ago!