RIM Overhauls BlackBerry in Bid to Regain Ground on IPhone

Photographer: Andrew Harrer/Bloomberg

A customer is shown a Research In Motion Ltd. Blackberry phone at a Verizon Wireless store in New York. Close

A customer is shown a Research In Motion Ltd. Blackberry phone at a Verizon Wireless store in New York.

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Photographer: Andrew Harrer/Bloomberg

A customer is shown a Research In Motion Ltd. Blackberry phone at a Verizon Wireless store in New York.

Research In Motion Ltd. (RIMM) is releasing three new versions of its BlackBerry smartphone simultaneously in the first overhaul of the handsets in a year as the company tries to regain ground against Apple Inc. (AAPL)

RIM is introducing the first touch-screen version of its Bold model, plus an updated Torch slider phone and a new touch- screen-only BlackBerry, all based on RIM’s new BlackBerry 7.0 platform, said Patrick Spence, managing director for global sales and regional marketing. The three devices will be available from 225 carriers, with some operators starting next week, in the “biggest launch in the history of BlackBerry,” he said in a telephone interview yesterday.

RIM is counting on the phones, the first new models since August 2010, to reverse a revenue slowdown that led to RIM’s prediction in June that sales this quarter may drop for the first time in nine years. All the models include pinch-and-zoom browsing and Web-page loading speeds that are 40 percent faster than the old Torch, Spence said.

“We’re taking it a step further by enhancing the browsing experience, which is something we know we had to work on,” he said. With the addition of what RIM calls liquid graphics that render images faster and make zooming smoother, “it’s an industry-leading experience,” he said.

RIM rose $1.18, or 4.9 percent, to $25.33 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has lost 56 percent this year.

New IPhone

While the Waterloo, Ontario-based company continues to gain market share in regions like Africa and the Middle East at the expense of Nokia Oyj (NOK1V), RIM is losing customers in the U.S. to Apple’s iPhone and handsets running Google Inc. (GOOG)’s Android software. Those devices appeal to consumers with their Web browsing features and a wider selection of applications.

RIM’s share of U.S. smartphone subscribers dropped 4.2 percentage points to 24.7 percent for the three months through May, according to ComScore Inc. (SCOR)

AT&T Inc., the biggest U.S. phone company, said today it will start selling the new Torch slider in August, without being more specific. The new Bold and touch-screen-only Torch will be available this year, the Dallas-based carrier said. Telus Corp., Canada’s third-largest carrier, said it will “soon” begin selling the phones.

Competing against the new BlackBerrys will be a slew of new rival models. Apple plans to introduce an iPhone version in September that boasts a more powerful chip for processing data and a more advanced camera, two people familiar with the plan said in June. Motorola Mobility Holdings Inc. will release the Droid Bionic, its latest Android phone, the same month.

Narrowing the Gap

That means that RIM has to have an early and successful debut ahead of its rivals in the U.S., which accounted for about 40 percent of RIM revenue last year, said Will Stofega, a technology analyst at Framingham, Massachusetts-based IDC.

“It’s critical that they get a jump start now,” he said. “They’ve definitely narrowed the gap with the competition. Display is definitely crisper and had to be, given what we’ve seen in terms of its competitors.”

The new Bold 9900, first shown at RIM’s BlackBerry World trade show in May, features a larger keyboard and thinner case. The Torch 9810 with slide-out keyboard looks similar to the first edition of the device. The last of the three new phones, the Torch 9850, is RIM’s first touch-screen-only phone since the BlackBerry Storm, which was criticized for software glitches.

Spence declined to say whether that older model was being discontinued, saying only that “we’re trying to keep it as clear as possible with a Torch, Bold and Curve family when you look at the BlackBerry portfolio.”

Quelling Concerns

The BlackBerry Curve, one of RIM’s most popular models in emerging markets, may soon be available with a touch screen, he said.

“We’ll be back shortly to talk to you about the Curve,” Spence said, declining to say more.

The introduction of the new phones comes at a critical time for RIM. Last week, the company said it will cut 2,000 jobs to rein in costs, leaving it with about 17,000 employees. These phones are set to be the last models that use the BlackBerry operating system as the company shifts to a platform called QNX that run RIM’s BlackBerry PlayBook tablet.

With the new BlackBerry 7 phones debuting now, “they’ve quelled a lot of concerns,” said IDC’s Stofega. “The sooner they get to QNX devices, the better.”

Instant Messaging

In the same week as the job cuts, RIM introduced a new version of its popular BlackBerry Messenger instant-messaging platform that will let consumers use their own applications with BBM, as it’s known. BlackBerry 7 is designed to capitalize on the BBM software and offer voice-activated search, Andrew Bocking, vice-president of BlackBerry software, said in the joint interview with Spence.

The Torch slider has a 3.2-inch display, the Torch 9850’s screen measures 3.7 inches, and the Bold 9900 has a 2.8-inch display.

The new phones also feature near-field communications, or NFC, capability that is gradually being adopted as a means of scanning information or making payments by tapping your device against a reader.

Individual carriers will make their own announcements about details on pricing and availability, Bocking said.

While new BlackBerrys have typically gone on sale first in the U.S., neither Spence nor Bocking would say which markets will debut the new phones first.

To contact the reporters 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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