MATT HARTLEY
From Monday's Globe and Mail Published on Sunday, Aug. 17, 2008 10:21PM EDT Last updated on Tuesday, Mar. 31, 2009 8:32PM EDT
The next phase of the global battle for smart-phone supremacy is set to commence this week if Research In Motion Ltd. finally takes the wrapping off its most advanced device to date, the BlackBerry Bold.
RIM's first next-generation (3G) device is its fastest ever, and its first completely new device since the company unveiled the Curve in May, 2007.
But while the Bold has already gone on sale in a handful of Western European markets such as Austria and Germany, RIM has yet to formally announce a North American release date, even though analysts expect the latest incarnation of the BlackBerry will launch with Rogers Wireless Communications Inc. some time this week.
The launch of the Bold marks the dawn of a new era for RIM as the company positions itself to become an even bigger player on the world's smart phone stage, while fending off challenges from new competitors such as Apple Inc. and established powerhouses such as Nokia Corp.
Although both RIM and Rogers declined to offer a specific launch date, analysts say the Bold could be available as early as Tuesday. RIM expects the Bold to be available in Britain, Germany, Austria, Turkey, Hong Kong, Australia and Chile by the end of the week.
The Boldlays the groundwork for RIM's aggressive global 3G strategy, said Carmi Levy, senior vice-president of strategic planning for AR Communications Inc.
“This is RIM's most significant launch since the Pearl [in September, 2006],” he said.
“It is taking the BlackBerry platform … firmly into 3G territory, which is pivotal, because more than any other device, the smart phone benefits hugely from 3G network access,” Mr. Levy said.
The improvement in data speeds between the 2G networks BlackBerrys currently use and 3G networks is akin to the difference between dial-up Internet and high-speed DSL, he said. A 3G BlackBerry is critical to RIM's international expansion because many European and Asian users have already made the switch to next-generation technology.
Apple's decision to launch the iPhone in more than 20 countries on July 11 was met with great fanfare, but RIM decided to follow a different strategy for the Bold, one more in line with the company's proven track record of staggering rollout dates in different locales so that each goes as smoothly as possible.
“No matter what RIM did, the iPhone was going to sell out in the first weekend,” said Canaccord Adams analyst Peter Misek. “They want to put a little distance between them and the iPhone.”
But the delayed launch in North America is also due to manufacturing challenges, Mr. Misek said. Although RIM has not commented on any technical difficulties, analysts say the company has been working feverishly to correct a handful of glitches.
Some of the first Bold devices to come off the line suffered from poor battery life and overheating due to the 3G microchips RIM was using, which were developed by Marvell Technology Group Ltd., Mr. Misek said.
Apple is encountering similar problems with its own chip maker, Infineon Technologies AG, with some new iPhone users complaining of poor reception and dropped calls.
“RIM has a much different reputation,” Mr. Misek said. “They don't have a reputation where you don't want to buy the first BlackBerry devices. Quite the opposite; everyone feels quite comfortable buying the first round of BlackBerrys, and I think they want to make sure of that.”
Apple is often allotted more leeway when it comes to glitches in new products because the company produces more consumer-centric devices, Mr. Levy said
“Because RIM is so much more deeply entrenched with BlackBerry in the enterprise market, this kind of bullet-proof, rock solid reputation matters a lot more to RIM than it does to Apple,” he said. “The market is willing to cut Apple a little bit of slack, whereas it will not cut RIM the same degree of slack simply because we expect more from enterprise-focused companies than we do from consumer-focused companies.”
While many analysts portray the fight for smart phone customers as a two way race between Apple and RIM, the BlackBerry maker's toughest competition isn't the iPhone, but rather devices that run Microsoft Corp.'s Windows Mobile operating system which is attempting to encroach on RIM's core business-user base, said Chris Hazelton, a market research analyst at The 451 Group in Boston.
Although shares of RIM are trading 66 per cent higher than they were at this time last year, investors have taken the company's stock on a roller coaster ride over the past few months. After bottoming out below $85 in February, RIM's stock climbed to nearly $150 in late June before falling to $105.85 just a few days after the iPhone was released on July 11.
RIM always planned to release the Bold this summer, but as the launch kept getting pushed back, some analysts worried RIM was ceding too much ground to the iPhone.
“Investor angst increased with each passing week without launch, leading to fears of [a] September launch,” Citigroup analyst Jim Suva wrote in a research note Aug. 7. “We believe actual launch removes significant sentiment overhang from RIM shares.”
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