RIM rebrands as BlackBerry; launches nifty new devices
NEW YORK (Reuters) - Research In Motion Ltd on Wednesday unveiled the long-delayed line of smartphones it hopes will put it on the comeback trail, but it disappointed investors by saying U.S. sales of its all-new BlackBerry 10 devices will not start until March, sending its share price tumbling 12 percent.
Chief Executive Thorsten Heins also announced that RIM was abandoning the name it has used since its inception in 1985 to take the name of its signature product, signaling his hopes for a fresh start for the company that pioneered on-your-hip email.
"From this point forward, RIM becomes BlackBerry," Heins said at the New York launch. "It is one brand; it is one promise."
RIM, which is already starting to call itself BlackBerry, had initially planned to launch the new BlackBerry 10 devices a year ago. But it pushed the release date back twice as it struggled to perfect a new operating system.
Ahead of Wednesday's announcements, analysts had said that any launch after February would be a black mark for the Canada-based company.
"The biggest disappointment was the delay in the U.S., that it will take so long before the devices get going there," said Eric Jackson, founder and managing Partner at Ironfire Capital LLC in New York.
Heins said the delays reflected the need for U.S. carrier testing, although carrier AT&T Inc offered few clues on what that meant. Instead, the carrier merely stated it was enthusiastic about the devices and would announce availability, pricing and other information at a later date.
"Carriers in all other parts of the world get their devices through the testing process significantly faster than the U.S. carriers do," said John Jackson, an analyst at IDC, adding that the U.S. process can often take "weeks" longer.
Nevertheless investors were extremely disappointed with the delay and RIM shares on the Nasdaq ended the day 12 percent lower at $13.78. Its Toronto-listed shares fell by almost the same margin to close at C$13.86.
RIM launched its first BlackBerry back in 1999 as a way for busy executives to stay in touch with their clients and their offices, and the company quickly cornered the market for secure corporate and government emails.
But its star faded as competition rose and the BlackBerry is now a far-behind also-ran in the race for market share, with a 3.4 percent global showing in the fourth quarter - down from 20 percent three years before. Its North American market share is even smaller - a mere 2 percent in the fourth quarter.
RIM shares have tumbled along with the company's market share and the stock is down 90 percent since its 2008 peak. Despite the pullback on Wednesday, RIM's share price has more than doubled over the last four months, reflecting the growing buzz about its new devices.
The new BlackBerry 10 phones will compete with Apple's iPhone and devices using Google's Android technology, both of which have soared above the BlackBerry in a competitive market.
The BlackBerry 10 devices boast fast browsers, new features, smart cameras and - unlike previous BlackBerry models - enter the market primed with a large application library, including services such as Skype and the popular game Angry Birds.
The BlackBerry Z10 touchscreen device, in black or white, will be the first to hit the market, with a country-by-country rollout that starts in Britain on Thursday.
A Q10 model, equipped with a small "qwerty" keyboard that RIM made into its trademark, will launch globally in April.
"I'm still confident that a lot of the subscriber base are going to want the upgrade to BlackBerry 10. It's a very strong improvement over what they currently have. This is not going to cause mass defections from iOS and Android, but it doesn't have to be a success for RIM. You've got to start somewhere," said Jackson of Ironfire, which owns shares in RIM.
The Z10 device won a lukewarm review from The Wall Street Journal's tech blogger Walt Mossberg, who complained of a shortage of apps.
On the other hand, David Pogue, who writes for The New York Times, apologized for describing BlackBerry as doomed in the past. The Z10 touchscreen device was "lovely, fast and efficient, bristling with fresh, useful ideas," he said.
While technology analysts conceded that RIM has done quite a remarkable job on many of the features of BlackBerry 10 and on the array of its app selection for a new platform, many argue it will be a very tough slog for RIM to regain its crown.
"I don't think that RIM will return to its glory days," said Charles Golvin, analyst at Forrester Research. "Success for them looks like staunching the bleeding and clawing back a percentage or point or two of market share."
Announcements about pricing so far have been in line with expectations. U.S. carrier Verizon Wireless said the phone would cost $199 for a two-year contract, while Canada's Rogers Communications is quoting C$149 ($150) for certain three-year plans.
RIM picked a range of venues for its global launch parties, including Dubai's $650-a-night Armani Hotel, which occupies six floors of the Burj Khalifa, the world's tallest tower.
The New York event took place in a sprawling basketball facility on the Lower East Side of Manhattan, just north of the Manhattan Bridge. The BlackBerry has been "Re-designed. Re-engineered. Re-invented," RIM said.
RIM, which is splurging on a Super Bowl ad to promote its new phones, also introduced Grammy-winning singer-songwriter Alicia Keys as its global creative director.
"I was in a long-term relationship with BlackBerry and then I started to notice some new, kind of hotter, attractive, sexier phones at the gym, and I kind of broke up with you for something that had a little more bling," Keys said at the New York launch.
"But I always missed the way you organized my life and the way you were there for me at my job, and so I started to have two phones - I was kind of playing the field. But then ... you added a lot more features ... and now, we're exclusively dating again, and I'm very happy," she said.
(Writing by Janet Guttsman; editing by Frank McGurty, Lisa Von Ahn, Peter Galloway, G Crosse)