* RIM sees program as linchpin for transition to BB10
* Program to be introduced in a phased manner
* Short positions in RIM shares on TSX fall sharply
By Euan Rocha
TORONTO, Dec 6 Research In Motion Ltd
on Thursday outlined a program of incentives to
encourage its biggest customers to run its soon-to-launch line
of BlackBerry 10 devices, seeking to persuade corporations and
government users to stick with its secure smartphones.
RIM is betting that the devices, to be launched on Jan. 30,
will revive its fortunes. That will depend to a large extent on
the response from RIM's enterprise customers -- the business
users who value BlackBerry's strong security features.
Waterloo, Ontario-based RIM, once a smartphone pioneer, has
bled market share to Apple Inc's iPhone and devices
powered by Google's market-leading Android operating
system, even among the business customers who once used
RIM says its new devices will be faster and smoother than
previous BlackBerry phones and will have a large catalog of
apps, which are crucial to the success of any new line of
It now plans to phase in a BlackBerry 10 Ready Program for
enterprise customers, initially offering online training and
webcasts, and then providing free trade-ups of licenses and
"We will be aggressively reaching out to our customers to
make sure they are aware of this program," said Bryan Lee,
senior director of enterprise at RIM. "We see this as really the
linchpin for helping our customers to transition to BB10."
Early adoption of BlackBerry 10 by government and corporate
clients will go a long way in easing the concerns of both RIM's
clients and investors. Many fear that a lackluster market
reception to BB10 could seal RIM's fate.
RIM, which does not say what percentage of its business
comes from the enterprise customers, said its online training
and webcast series are already in place. Trade-ups, including
free upgrades on the licenses for BB10 operating system, will be
available ahead of the Jan. 30 launch.
Evercore Partners analyst Mark McKechnie said RIM's
step-by-step program to woo enterprise customers was a positive
move, though it highlights the challenges RIM faces.
"We are encouraged with an 'all out' marketing campaign with
the right incentives to motivate enterprises to upgrade," he
said in a note to clients. "Our take is that this will remove a
roadblock for those already planning to upgrade, but likely
won't push too many who prefer to wait."
McKechnie, who has an "equal-weight" rating on RIM's stock,
said the move is unlikely to tempt back customers who have
already abandoned the BlackBerry in favor of iPhones and Android
devices. RIM offers support for the rival devices, but needs
corporates to update to Blackberry Enterprise Service 10 so they
can power and run BB10 devices on their networks.
RIM's Lee said he sees tremendous excitement from enterprise
customers who want to use the new platform, but he would not
speculate on how many would be ready to transition to the new
platform come launch day.
RIM said last month that its BlackBerry Enterprise Server
10, which runs the devices on corporate networks, is in beta
testing with around 20 key government agencies and
Feedback on the BB10 devices and platform has been largely
positive from both carriers and developers. Financial analysts
Some have upgraded their ratings and targets on RIM's share
price in anticipation of a successful launch of BB10, while
others believe the new platform has little chance of succeeding.
TD Securities analyst Scott Penner on Wednesday raised his
price target on RIM to $12 from $9.50, but said RIM still faces
RIM's stock has surged over the last two months from
multi-year lows around $6 as the launch date for the new devices
nears. The stock is still more than 90 percent below the 2008
all-time high around $148.
The latest TSX data indicates that short positions in RIM
shares have fallen dramatically in the last two weeks. The total
short positions in RIM, a bet that the stock price will fall, on
the TSX fell to 15.2 million as of Nov. 30, down from 20.6
million in the prior two weeks.
RIM shares slipped 0.4 percent to $11.89 on the Nasdaq on
Thursday. The Toronto-listed shares ended down 0.3 percent at