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BlackBerry Goes Bold With New Smart Phone

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By VILLE HEISKANEN

Bloomberg News

Published: May 13, 2008

Research In Motion on Monday introduced its first major new BlackBerry model in more than a year: the Bold, a high-end model that further demonstrates the Canadian company's desire to make tools for work and play.

The Bold, which has twice the screen resolution of the current Curve model, also has quicker Web browsing and more room for songs and videos, giving the company a jump on a faster new iPhone that analysts expect to be offered by Apple next month.

The phone, also called the 9000, has more internal memory, a glossy metallic look and adds corporate-strength Wi-Fi capabilities to third-generation cellular and Bluetooth radios. The Bold also has satellite navigation and a video camera.

AT&T on Monday said it would be the exclusive U.S. carrier for the Bold, which James Balsillie, Research In Motion's co-chief executive officer, said will start selling for $300 to $400 this summer.

The product sets up a showdown between Apple 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 expected to quadruple 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."

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, 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 in 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, which is based in Waterloo, Ontario, 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.

"Where Research In Motion falls short against Apple is in marketing and on the entertainment side," said Rob Enderle, president of research firm Enderle Group in San Jose, Calif. "Where Apple's been moving is on entertainment, particularly video."

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, Calif.-based Apple sells the iPhone in 8- and 16-gigabyte versions.

Although 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 United States 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.

More Innovation Expected

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 completely committed to 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," Um said. "We are going to see more innovation coming from them."

Separately, Research In Motion said it will 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.

Although 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 to investors this month. He recommends buying both Apple and Research In Motion shares.

THE BOLD

SPEED: Uses high-speed downlink packet access

MEMORY: 1 gigabyte, expandable to 8 gigabytes with memory card

PROGRAMS: Better access to e-mail and messenger programs

PRICE: $300 to $400

WHEN: This summer in the United States

EXTRAS: Adds satellite navigation and a video camera; plays songs from Apple's iTunes

Information from The Associated Press was used in this report.

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