RIM's new flip BlackBerry has hit potential

By Wojtek Dabrowski - Analysis

TORONTO (Reuters) - Research In Motion appears to have dialed up a mainstream hit with the new flip version of its popular BlackBerry Pearl by tapping into cell phone users' love affair with clamshell mobiles.

Also, analysts expect the flip Pearl will be relatively affordable right from its launch, which, combined with its shape, will make it RIM's first truly mass market BlackBerry.

"There is a huge percentage of the population -- especially North Americans and especially women -- that seem to really like flip phones," said Canaccord Adams analyst Peter Misek. "So now they have a BlackBerry that addresses that."

RIM says that in the United States about 70 percent of mobile phone users opt for a flip phone. By attacking a market of that size, the Waterloo, Ontario-based company hopes to continue to diversify its customer base beyond its mainstay of executives and professionals.

"This device is a multimillion-unit device per year," Misek said of the flip Pearl's prospects.

The size and fashion appeal of a mobile phone are big considerations and consumers sometimes fickle tastes must be appeased if a device is to succeed.

"A lot of consumers don't like the bulky BlackBerry holstered to a belt and having a small product that fits into a purse or a pant pocket is appealing," Scott Pope, an analyst at First Analysis Securities Corp., said of RIM's newest smartphone.

"It's an excellent addition to the portfolio, which ... has been short on consumer products."

RIM's retail push first began in September of 2006, when the original candy-bar-shaped BlackBerry Pearl was launched with a slate of multimedia features aimed squarely at the mainstream market.

The Pearl also put RIM in more direct competition with the likes of Nokia, Motorola and Apple's iPhone -- some of the biggest names in mobile phone manufacturing.

The device was a runaway success, selling more than 10 million units, Misek said. In turn, RIM's results dazzled investors and its share price soared.

However, some nonbusiness users remained on the sidelines, taken aback by the relatively high cost of smartphones. The Pearl's U.S. launch price was $199.

The flip-phone version could change that. Misek said he expects some wireless carriers to offer the device free to subscribers, and the highest price he said he has heard so far is $149.

"It's the first Research In Motion product that truly is mass market at its price point," said Duncan Stewart, president of Duncan Stewart Asset Management.

The timing of the flip Pearl launch is noteworthy because the device is coming to market just as a significant economic slowdown is taking hold. Consumer wallets and corporate budgets alike are being squeezed and some analysts have warned BlackBerry sales and upgrades could slow.