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RIM Targeting Consumer Market, Expanding Internationally
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TORONTO -(Dow Jones)- Two announcements from Research In Motion, Thursday signal how it plans to take on a growing list of competitors and increase its subscriber growth.
The company said NTT DoCoMo will begin selling RIM's BlackBerry devices in Japan this fall. It also said Cingular Wireless, the big U.S. carrier, will begin selling the BlackBerry 7130c in Cingular retail stores next week. The 7130c will sell for $199 with a two-year contract and qualified voice plan, RIM said in a joint press release with Cingular. Unlimited email and Web browsing will be available through a new service plan for as low as $29.99 a month.
The Cingular offering highlights RIM's efforts to expand into the consumer market, while the link-up with DoCoMo brings BlackBerry to Japan for the first time.
Waterloo, Ont.-based RIM is trying to fend off a plethora of competitors who are aiming to seize its spot atop the fast-growing smartphone market. In May, Motorola unveiled the long-awaited Moto Q, a sleek handheld that provides real-time email service from Good Technology, a closely-held Sunnyvale, Calif. firm. The BlackBerry is also competing against devices from Nokia and Palm, while Microsoft is angling to be the dominant software provider to smartphone makers.
To stay ahead of the pack, RIM is forging partnerships with carriers worldwide and targeting the consumer market. It's also licensing its technology to other device makers and adding applications to its enterprise offering.
In a research note Thursday, JPMorgan's Paul Coster said 170 carriers have launched the BlackBerry so far and RIM has another 140 in the pipeline. Last month, RIM said China Mobile Communications would soon offer BlackBerry service nationwide, and it also introduced the device in Korea.
The move into Japan brings BlackBerry into yet another major new market. In a research note Thursday, Lehman Brothers' Jeff Kvaal said subscriber growth in Japan is likely to grow at a measured pace initially. That's because carriers typically require several quarters to "orient" their sales force to sell data products to business users, he said. Ultimately though, Kvaal said the opportunity for RIM in Japan is sizeable given the scale and strength of Japan's business community.
Cingular Cuts Price To Entice Consumers
The Cingular news is the latest sign that RIM intends to make a big push into the consumer market. Chris Hall, director of BlackBerry Offers at Cingular, said the carrier's latest BlackBerry offering is about enabling wireless email for everyone. The press release announcing the news highlights the "consumer friendly prices" of the 7130c.
Until now, Cingular charged $44.99 a month for BlackBerry service to all of its subscribers. Now, consumers or small businesses can opt for the $29.99 a month fee, albeit for a less sophisticated service. For instance, instead of receiving real-time email access, consumers can update their email every "several minutes," Hall said. As well, the higher price includes additional security services and other applications - such as sales force automation and database access - that RIM has added to its BlackBerry service to entice enterprise users.
However, these applications aren't aimed at consumers, who are more concerned with ease of use, appearance and multimedia capabilities. On the latter point, RIM is widely expected to unveil a BlackBerry that includes an MP3 player and a camera by this fall. Some analysts have speculated recently that the company is working with Apple Computer on a new multimedia device.
After opening higher, RIM shares have succumbed to the pessimism that has gripped the market Thursday, trading down $1.05, or 1.6%, to $63.91 on about 2.0 million shares on Nasdaq.
Company Web Site: http://www.rim.net
-Stuart Weinberg, Dow Jones Newswires; 416-306-2026;
stuart.weinberg@dowjones.com
(END) Dow Jones Newswires "
Tags: [docomo] [rim] [cingular] [retail stores] [pace] [ntt docomo]
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