The global ambitions of Research In Motion Ltd. have known few bounds since the company began signing up scores of major carriers, from Iceland to Turkey.
But the maker of BlackBerry devices is facing an entirely new challenge as it tries to penetrate the biggest emerging market of all.
In China, the launch of RIM's wireless service has been quietly delayed, in part because of government concerns over its inability to control the communications technology.
China is worried that the high-level encryption technology in the BlackBerrys could make it difficult for security authorities there to gain access to e-mail messages, a source said Tuesday. Agents routinely monitor e-mail messages on China's Internet servers, which are all state-controlled.
RIM received some high-level political assistance Tuesday when Ontario Premier Dalton McGuinty showcased the BlackBerry, and the company's case, to a Chinese cabinet minister.
A senior RIM executive would not confirm whether BlackBerry's launch has been delayed because of problems with the government.
However, Mr. McGuinty said the company told him that “some prerequisites” from the government are not yet satisfied.
With almost 400 million users, China is the world's biggest cellphone market, and RIM expects it to become a key market for its BlackBerry handheld devices.
But more than 13 months after signing a letter of intent with China's biggest cellphone carrier, China Mobile, RIM still does not have a firm date for launching its BlackBerry service in mainland China.
“The issue of security control has to come up,” said Carmi Levy, a senior analyst at Info-Tech Research Group in London, Ont.
“It hangs out there as a potential deal breaker. The wheels tend to turn very slowly when you try to get into the Chinese market.”
Without being given the key to RIM's encryption algorithms, the Chinese government would find it virtually impossible to tap into the highly secure communications stream between portable BlackBerrys and desktop e-mail accounts.
“You have to ask yourself: ‘How comfortable would RIM be putting the ability to decrypt its technology into the hands of the Chinese, and would China demand it?'” Mr. Levy said.
Another potential problem is whether the U.S. government would try to prevent the sale of encryption technology to China. The United States has export restrictions limiting the sale of sensitive technologies to China and other countries.
Although BlackBerry hardware and software is Canadian technology, the encryption algorithms that underlie it were developed years ago by the U.S. military, Mr. Levy said.
RIM has signed deals with nearly every major mobile phone company in the Western world to carry its BlackBerry service. It is also signing up second-tier carriers at a rapid rate, forecasting that it will add 100 new partners this year alone. But its efforts to forge into mainland China have not moved nearly as smoothly.
RIM announced plans to crack the Chinese market in the first quarter of 2002. In May of that year, it finalized a deal with Hutchison Telecommunications Ltd. to bring the BlackBerry to Hong Kong. But it has yet to roll out service in mainland China, despite the memorandum of understanding with China Mobile last year.
In an effort to help the Waterloo, Ont., company, Mr. McGuinty arranged to show off a BlackBerry to a Chinese cabinet minister Tuesday. His Economic Development Minister, Joe Cordiano, pulled out the gadget during their meeting with Wang Xudong, China's Minister of Information Industry.
Mr. McGuinty and his entourage have brought their own BlackBerrys to China, and they are using the devices to check their e-mail during their trade mission this week. But they have been obliged to use a costly roaming service — as hundreds of other customers in China are already doing.
“I told the minister about the potential of BlackBerrys and how this wonderful company in our province, RIM, is looking to find opportunities,” Mr. McGuinty told reporters in Beijing Tuesday after his meeting with Mr. Wang.
“I got the sense that we had his attention on this score and he was eager to pursue it.... So, I've taken it about as far as I can in terms of piquing curiosity. He asked for more information. I conveyed that to RIM, and now they've got to pick up the ball and run with it.”
He said BlackBerrys have become a “vital tool” in Canada and are so popular in his cabinet that he ordered the devices banned from cabinet meetings because they were distracting his ministers.
Despite the political intervention, however, RIM is now saying the launch of its BlackBerry service in China — previously expected by the end of this year — might slip to the first half of next year instead.
Norm Lo, vice-president of Asia Pacific for RIM, said he was pleased that Mr. Wang seems to be taking an interest in the BlackBerry. He said the company's China launch should take place by the first half of next year at the latest.
“I think it will certainly be in a matter of months,” he said in an interview in Beijing. The company is not disappointed at the length of time it is taking, Mr. Lo said.
“Actual launch dates are not up to us. It's a joint effort. We're working very closely with China Mobile. Typically, across the world ... it takes time to actually go through the whole process. Things are moving as per plan.”
Hundreds, if not thousands, of customers have bought BlackBerrys and taken them into mainland China to use them on roaming services, he said.
