Canada's most important technology company is launching its biggest attack yet on the consumer market, with one rival squarely in its sights.
In a direct assault on Apple's popular iPhone, Research In Motion is expected to unveil a new version of its BlackBerry operating system, as well as a new smart phone, the BlackBerry 9800, at a launch party in New York next week.
A source close to RIM, speaking on condition of anonymity, said the 9800 will include a "slider" keyboard and a touch-screen interface. The phone is expected to go on sale first with AT&T.
"The best way to think about it is … right now if you want a touch-screen with AT&T you go with the iPhone," said an analyst who asked not to be identified because he is not authorized to speak to reporters. "If you want to type, well, then you're probably going to go with something else. The slider is a very nice combination of the two."
Both the new operating system and the new smart phone are aimed largely at consumers, who make up the fastest-growing segment of the next-generation phone market. However, Apple still commands the bulk of the attention in the consumer area.
But even as RIM attacks the consumer market, the company also finds itself in a defensive position thanks to one of the features that made the BlackBerry such a must-have tool for business customers: its high level of security.
Governments in both India and the United Arab Emirates have issued sharp warnings to RIM about the level of security on its BlackBerry devices. Both governments are worried that the smart phones are so secure that it is difficult for authorities to monitor the messages users are sending. In India, the government framed its concerns as a security issue. The UAE - a conservative Muslim nation - also cited social and moral concerns for wanting the ability to monitor BlackBerry traffic.
A RIM spokeswoman did not respond Wednesday to requests for comment.
In 1999, RIM's first BlackBerry was a pager with wireless Internet -- and AA batteries
Both Apple and RIM have recently been caught in the unusual position of defending against criticism of their traditional strengths. While overseas government agencies complain about RIM's industry-leading security measures, Apple's image as a leader in the consumer market took a hit after myriad complaints about dropped calls because of an antenna design flaw on its newest iPhone, which arrives in Canada this Friday.
Analysts say the good news for RIM is that similar issues involving foreign governments have rarely had a significant long-term impact on the company's stock price. A year ago, the local carrier in the UAE offered users what the carrier described at the time as a "security patch" for BlackBerry. The patch turned out to allow for easier monitoring of BlackBerry traffic, leading RIM to criticize the move.
If RIM's launch of the 9800 represents an aggressive attempt to give consumers an alternative to Apple, then it mirrors a similar move by the iPhone maker to give businesses an alternative to the BlackBerry. During Apple's quarterly earnings conference call last week, the company said that 80 per cent of Fortune 100 companies are now using or testing the iPhone - another sign that, as smart phones become mainstream devices, both the consumer and business markets are still up for grabs.
A bumpy summer
Both Apple and RIM have had good days and bad days this summer. What the two companies do next will likely determine their success for years to come.
The good: iPad sales are soaring. The company just posted record revenue in its most recent quarter, in large part because of stronger Mac and iPad sales. If tablet computers become the next hot product category, Apple will have a significant lead on its competitors.
The bad: Problems with the antenna on the newest iPhone forced Apple into damage-control mode. The crisis seems to have passed, but not before CEO Steve Jobs was forced to hold a press conference and offer free protective covers and full refunds to consumers.
The wild card: Apple's foray into the enterprise smart-phone market is perhaps the most interesting aspect of its business strategy. For years, RIM has dominated that market with BlackBerrys. However as more devices begin offering push e-mail, which automatically delivers messages to the phone, the market appears a little less safe for RIM.
The good: A new BlackBerry and a new operating system, built with the consumer in mind. A smart phone with a physical keyboard and a touch-screen may lure consumers who would otherwise opt for an iPhone, but do a lot of typing.
The bad: Complaints from authorities in the UAE and India about not being able to monitor BlackBerry traffic because of the device's security settings may cause some to question RIM's ability to expand overseas. So far, the issue remains a minor distraction.
The wild card: For years, there have been rumours about RIM's expansion into other mobile devices - most recently, tablet computers. However, RIM may well tap a lucrative market with such niche devices as in-car mobile integration systems, especially as more jurisdictions ban cellphone use while driving.