ANALYSIS-iPhone at BCE, Telus raises stakes for BlackBerry
* BCE, Telus, to offer iPhone in November
* Wider availability in Canada will challenge RIM
(In U.S. dollars unless noted)
By Wojtek Dabrowski
TORONTO, Oct 6 (Reuters) - News that Canadian wireless carriers BCE Inc (BCE.TO) and Telus (T.TO) will offer Apple's (AAPL.O) iPhone next month will make it harder for BlackBerry maker Research In Motion (RIM.TO) (RIMM.O) to fight for subscribers on its home turf.
Until now, only the third major wireless carrier, Rogers Communications (RCIb.TO), was able to offer the iPhone in Canada. That's because Rogers' network uses the GSM and HSPA wireless technology on which the iPhone operates.
However, BCE and Telus announced this week that an HSPA upgrade of their networks that was supposed to be finished by early 2010 will now be ready in November. Both also announced agreements with Apple that will see them offer the iPhone in Canada.
All three carriers currently offer the BlackBerry, which means that at BCE and Telus, RIM's smartphone offering has been
-- thus far -- uncontested by the iPhone. -- thus far -- uncontested by the iPhone.
Analysts have cautioned that the heightened competition in Canada, and elsewhere, could dent RIM's growth prospects, profitability and, consequently, its share price.
"Competition is definitely going to heat up somewhat versus what it was before," Kaufman Bros analyst Shaw Wu said on Tuesday. "Apple is arguably really (RIM's) only competitor. The other products out there simply just don't match up."
Canada, with a population of about 34 million, is a relatively small wireless market in global terms. However, the situation illustrates the increased pressure that RIM faces as the iPhone becomes cheaper and more widely available around the world.
"It removes one of the key competitive advantages that RIM has had in the Canadian market," said independent technology analyst Carmi Levy. "This raises the competitive stakes for Research In Motion. I would expect that, as always, they won't take that sitting down."
A few years ago, the iPhone would not have been a major concern for RIM, which then counted on mostly business executives, lawyers, politicians and other professionals for its subscriber base.
However, RIM has aggressively pushed into the retail consumer side of the market by releasing multimedia-laden handsets such as the Pearl and, more recently, the touchscreen BlackBerry Storm, the company's answer to the iPhone.
Now, more than half its 32 million subscribers are considered "non-enterprise" -- RIM's term for retail consumers or small and medium businesses.
This has placed RIM in direct competition with Apple and other consumer handset makers such as Nokia (NOK.N) or Palm Inc PALM.O, the maker of the Pre smartphone.
However, given the large size of the overall global smartphone market and the strong position of both the BlackBerry and the iPhone, Wu said both RIM and Apple can succeed despite competition from one another.
"We think there's room for both Apple and RIM to do well," he said.
DOUBTS ABOUT RIM'S DOMINANCE
News that the iPhone will be available from all three major Canadian carriers earlier than expected also comes as analysts are wondering whether RIM's market share will be eroded by competing devices.
Late last month, RIM reported results and an outlook that disappointed investors and sent its shares tumbling more than 15 percent.
Analysts said increased competition in North America -- RIM's key market -- from the likes of Palm and Motorola Inc MOT.N was a top concern for the future.
RIM's shares have declined further since then and currently change hands around $66 on Nasdaq and about C$70 on the Toronto Stock Exchange.
BCE, TELUS CEMENTING POSITIONS
The iPhone announcements should help BCE and Telus prepare for the arrival of additional competition on the Canadian wireless landscape.
Upstart providers who won wireless spectrum during a government auction last year plan to launch service in the coming months and challenge the Big Three carriers, BCE, Telus and Rogers, for subscribers.
But by being able to offer a popular device such as the iPhone before the newcomers roll out their networks, BCE and Telus could be able to lessen the blow of new competition, Levy said.
"It gives consumers a very big reason to stay with their incumbent carriers long before the new players come to market," he said.
($1=$1.06 Canadian)
(Reporting by Wojtek Dabrowski; editing by Rob Wilson)
((wojtek.dabrowski@reuters.com; +1-416-941-8009; Reuters Messaging: wojtek.dabrowski.reuters.com@reuters.net)) Keywords: RIM/IPHONE Keywords: RIM/IPHONE
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