RIM unveils new BlackBerry to counter iPhone

RIM unveils new BlackBerry to counter iPhone

Priced at $199.99 with two-year contract.

August 4, 2010 8:45 by Reuters

Research In Motion unveiled a new BlackBerry smartphone with a touchscreen and slideout keyboard, hoping to raise its consumer appeal and fend off competition from Apple’s iPhone.

The BlackBerry Torch will go on sale in the United States on Aug. 12 for $199.99 with a two-year contract with AT&T Inc. The device uses a new operating system and has a faster and easier-to-use Web browser, RIM said on Tuesday.

Analysts said the consumer-friendly features could help the BlackBerry catch up with the iPhone, as well as smartphones that use Google’s Android operating system such as Motorola’s Droid. They also said the Torch does not represent a major advance on rival handsets.

“The operating system has some new touches and integration, but there’s nothing here that really represents a leap forward beyond what others are providing,” said NPD analyst Ross Rubin. “This gets the experience competitive again — if they can do that with the efficiency and stability that RIM is known for, then it’s a positive.”

The Nasdaq-traded shares of RIM fell 1 percent, while its Toronto-listed shares fell 2 percent.

The launch comes as the BlackBerry’s security measures have come under scrutiny, after the United Arab Emirates threatened on Sunday to ban some BlackBerry services unless RIM gives it access to encrypted messages. India’s Economic Times reported that RIM will allow Indian security authorities to monitor BlackBerry services.

While the BlackBerry has long been the gold standard for corporate and government customers because of its speedy, secure email service, critics said it needs a big overhaul to expand its popularity beyond business customers.

The new device looks “outstanding,” said Kaufman Brothers analyst Shaw Wu.

“It really closes the gap with Android and iPhone — probably more Android, because Apple really offers something unique. But RIM really overhauled the user interface. I think they’ve regained their No. 2 position in terms of technology.”

BlackBerry Torch users can type messages on the screen or a slide-out keyboard. It comes with a 5-megapixel camera with a flash and a built-in GPS for location-based applications.

The new BlackBerry 6 operating system integrates access to social networking sites like Facebook and Twitter with its BlackBerry Messenger service.

“This is one of the most important product introductions in our history. It’s a really special product because so much new goodness has been added to it.” said Mike Lazaridis, RIM’s president and co-chief executive.

The planned launch this month was earlier than most analysts expected.

“I’m glad to see they got it out sooner rather than later,” said Nick Agostino at Mackie Research Capital. RIM’s success will depend on positive industry reviews and adoption by developers of applications, he said.

“The fact that this device is going to be geared toward both enterprise and consumer, that will be a positive as people will feel that if they design for this device, they can hit two birds with one stone,” he said.

But some analysts, including Michael Gartenberg at Altimeter Group, said that the Torch may face a challenge in attracting developers.

“Developers want to go where the consumers are and consumers want to go where the developers are. RIM is going to have to tell a very compelling story to attract the first batch of developers,” he said.

(Reporting by Sinead Carew in New York and Frank McGurty in Toronto, Additional reporting by Matt Lynley, Writing by Ritsuko Ando; Editing by Tim Dobbyn and Robert MacMillan)