RIM Unveils Tablet as BlackBerry Maker Chases Apple's IPad

Research In Motion Ltd., maker of the BlackBerry smartphone, unveiled a tablet computer to compete with Apple Inc.’s iPad and add a fresh source of revenue as BlackBerry sales growth slows in the U.S.

The device, called Playbook, has a 7-inch (18-centimeter) screen, RIM co-CEO Jim Balsillie said in an interview in New York. That’s smaller than the iPad’s 9.7-inch display. The Playbook is also slimmer and lighter than the iPad.

RIM is racing to get its tablet into stores as Hewlett- Packard Co., Samsung Electronics Co. and Motorola Inc. build similar devices in a bid to emulate the success of the iPad in filling the gap between smartphones and laptops. Apple sold 3 million iPads in the first 80 days after the device’s April debut, eclipsing sales of its iPod music player.

“RIM needs a tablet device because it’s necessary for all the device makers to have a multiplatform strategy to compete in the long-term,” said Scott Sutherland, an analyst at Wedbush Securities Inc. in Los Angeles. “With new devices coming out on multiple operating systems, it’s as much defensive for RIM to have a tablet as it is offensive.”

RIM, based in Waterloo, Ontario, fell 51 cents to $48.36 in Nasdaq Stock Market trading. The stock has declined 28 percent this year, compared with a 38 percent gain for Apple.

Shrinking Market Share

The company is counting on the tablet to increase revenue as the BlackBerry loses ground. RIM’s share of the smartphone market slid to 18.2 percent in the second quarter from 19 percent a year earlier. Apple’s iPhone boosted its share to 14.2 percent from 13 percent and devices based on Google Inc.’s Android software surged to 17.2 percent from 1.8 percent, according to researcher IDC.

The BlackBerry Torch touch-screen phone, which went on sale last month, has received mixed reviews from technology columnists who said its screen resolution and processor speed lag behind rivals like the iPhone and Galaxy, an Android phone from Samsung.

“The principal market for this is busy working people,” Balsillie said. “We’re not trying to say this is all things to all people.”

The Playbook has been built with the BlackBerry’s security features that made it popular with governments and Wall Street banks, differentiating the tablet from the competition, Balsillie said. The device’s Web browser is compatible with Adobe System Inc.’s Flash technology to allow customers to watch a bigger range of video content from the Internet, he said. The iPad doesn’t run Flash video or animations.

New Operating System

Balsillie said he expects the device, which weighs 400 grams (0.9 pounds) and includes a front- and rear-facing camera, will be sold through carriers and retailers, without naming any customers. He didn’t give a price or say when it’ll go on sale.

RIM is building the device based on software built by QNX Software Systems, a company RIM bought in April for $200 million. That marks a shift away from BlackBerry 6, the latest version of the BlackBerry operating system, used in the Torch.

At least one person familiar with RIM’s tablet plan said last month the company opted for QNX because BlackBerry 6 includes legacy software code from older BlackBerrys that limits what devices can offer consumers.

While QNX’s software is used to help control the music and media features in BMW and Porsche sports cars, it is also used in the control systems for nuclear power plants and the U.S. Army’s unmanned Crusher tank.

That will give it a higher level of reliability than rival operating systems built for smartphones and adapted for tablet devices, said Balsillie.

“It’s a performance-based OS that we migrated to tablet and mobility as opposed to, ‘hey, I’m tablet and mobility, how do I get high performance,’” he said.

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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