Monday, May 12, 2008

Research In Motion to Start Selling Faster Blackberry Bold

May 12 (Bloomberg) -- Research In Motion Ltd. introduced a BlackBerry phone with quicker Web browsing and more room for songs and videos, getting a jump on a faster iPhone that analysts expect next month. The device, called the BlackBerry Bold, has a brighter screen and better Web browser than previous models, co-Chief Executive Officer James Balsillie said in an interview. The phone, which also has satellite navigation and a video camera, will start selling at AT&T Inc. for $300 to $400 this summer in the U.S., he said. The product sets up a showdown between Apple Inc. CEO Steve Jobs and Balsillie in the market for so-called third-generation phones, which offer speedier Web access and video downloads. Phones with Internet, e-mail and video are the fastest-growing part of the handset market, with users quadrupling to 400 million in the next three years, RBC Capital Markets estimates.

``You need to provide faster networks, faster processors,'' said Balsillie, 47. Consumers are using ``more and more multimedia'' and ``there are lots of contenders out there.'' Research In Motion, based in Waterloo, Ontario, rose $9.07, or 6.8 percent, to $141.84 at 1:06 p.m. New York time in Nasdaq Stock Market trading. Apple advanced $4.30, or 2.3 percent, to $187.75. Research In Motion had more than doubled in the past 12 months before today, while Apple is up 72 percent over that span.

Faster Connection

The Bold, which also will go on sale in Europe and Asia, is the first BlackBerry to use high-speed downlink packet access, or HSDPA, a network technology that speeds data delivery. Apple may introduce an iPhone with faster data in June, according to analysts such as RBC's Mike Abramsky. Since the iPhone's debut last June, Apple has seized the No. 2 spot in the U.S. market for so-called smart phones, handsets with computer and Internet functions. The BlackBerry ranks first. To fend off the iPhone, Research In Motion has expanded beyond business customers, releasing devices that have music players and cameras. The new BlackBerry lets users listen to songs from Apple's iTunes music program.

``Where Research In Motion falls short against Apple is in marketing and on the entertainment side,'' Rob Enderle, president of research firm Enderle Group in San Jose, California, said today in a Bloomberg Television interview. ``Where Apple's been moving is on entertainment, particularly video.''

Venture Fund

In a bid to foster new uses for the BlackBerry, the company started a $150 million venture-capital fund with the Royal Bank of Canada and Thomson Reuters Corp., Balsillie said. The fund invests in companies developing smart-phone applications. The Bold has 1 gigabyte of memory, more than any previous BlackBerry. Users can expand it to 8 gigabytes with a memory card. Cupertino, California-based Apple sells the iPhone in 8- gigabyte and 16-gigabyte versions. While Balsillie unveiled the Bold before Jobs showed the new iPhone, the Apple device may still be the one that starts selling first, said UBS AG analyst Maynard Um. Apple, whose iPhone is sold exclusively in the U.S. through AT&T, usually waits to show new products until they are available to shoppers. Research In Motion might benefit from following Apple's introduction because AT&T's rivals are likely to battle the new iPhone with their products, Um said. That may allow the Bold to start selling in a less competitive market later on.

Touch Screen?

With rounded corners, the Bold's design resembles that of the iPhone. Unlike Apple's product, it has a regular keyboard and not a touch screen. Still, Balsillie said he isn't ``religious'' about having a keyboard in the BlackBerry. Analysts say he may release a touch-screen model later this year.

``The BlackBerry design has improved quite a bit,'' UBS's Um said in an interview. ``We are going to see more innovation coming from them.'' Separately, Research In Motion said today it would make it easier to access Microsoft Corp.'s e-mail and messenger programs with the BlackBerry. The BlackBerry dominated U.S. shipments for e-mail phones in the fourth quarter with 41 percent of the market, according to Reading, England-based research firm Canalys. The iPhone had 28 percent and Palm Inc., maker of the Treo, had 9 percent. While Research In Motion dominates the market, Apple may grow faster this year. Apple may more than triple its shipments to 14 million this year from last year's 4 million, RBC's Abramsky estimates. BlackBerry shipments will almost double this fiscal year to 25 million from 14 million last year, he projects. Research In Motion will probably start selling other new BlackBerrys this year, including one that flips open to reveal a keyboard, Toronto-based Abramsky wrote in a note this month. He recommends buying both Apple and Research In Motion shares.

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