New BlackBerry phones don't wow investors, but analysts see promise

RIM changes name to Blackberry, unveils two new smartphones, and sees share price fall

RIM's share price dropped more than 6 per cent on Wednesday, after the company announced it was changing its name to BlackBerry and unveiled two new smartphones, the touchscreen Z10 and the qwerty Q10.

While investors appeared disappointed by the news, several analysts attending the announcement here said the new offerings -- and the new name -- give struggling BlackBerry a reasonable chance of turning its business around.

Shares were trading at $14.84 at 1 p.m. ET, down 81 cents from Wednesday's opening.

The declining subscriber base for BlackBerry now stands at 79 million, with enterprise customers making up barely 25% of that -- a marked reversal from three years ago.

The two new smartphones -- the first to be unveiled by the Canadian company in 18 months -- appear to bridge the two major smartphone audiences: Consumers and workers, analysts agreed.

In fact, workers are buying personal smartphones in record numbers to use at work, which is blurring the divide between consumers and workers.

"More smartphones for work are purchased by individuals, not IT," said Bob O'Donnell, an analyst at IDC.

The photo and video capabilities in the "Z10 and Q10 will appeal to consumers," while the split-persona capability of the BlackBerry Balance technology, which creates two secure spaces to separate corporate from personal data, included in the phones is a key appeal to IT managers and workplaces.

O'Donnell went so far to say that chinks in the armor of Apple's iPhone's may give the Z10 an slight opening.

"Is iPhone still cool? There's some iOS fatigue and for some, iOS is feeling old," he said. "That leaves an opening for BlackBerry, although it might be a small opening."

O'Donnell and Jack Gold, an analyst at J. Gold Associates, said that U.S. buyers will likely be disappointed that the Z10 won't be available until mid-March on the four major carriers.

The Q10 will be available in April, according to Thorsten Heins, the CEO of BlackBerry, though carrier Sprint said Wednesday only that it would carry the Q10 in the coming months.

Heins also told today's gathering here that Research in Motion has been renamed BlackBerry, as the latter is a well-known global brand.

O'Donnell and Gold said BlackBerry, which currently holds less than 5% of the global smartphone market, faces an uphill challenge in marketing and selling both devices.

"Is this strong enough to drive them forward? It depends on marketing," O'Donnell said. "Are they big enough salmon to jump back to the spawning ground?"

"I think they have a good chance of making a comeback," added Gold. "It's not just a me-too announcement of features."

But Gold added that BlackBerry must quickly advantage of the new features. The company said it plans to spend many millions of dollars on advertising, starting Sunday during the Super Bowl.

The company is pushing the BlackBerry Balance feature for users in workplaces, along with a so-called "Remember" tool that will allow users to set up folders like "vacation" to hold specific emails and voice message for later review.

Gold said he is very impressed with video chat features that allow workers to easily share power point slides, graphs and charts. A video chat feature works in Wi-Fi and reportedly over cellular networks such as fast LTE.

O'Donnell said he was impressed with Blackberry's initial marketing plans, which include the signing of singer Alicia Keys to promote the devices to her fellow working moms -- an important demographic group to address.

Keys appeared on stage at today's event, where she described giving up another smartphone in favor of the Z10. "She's articulate," O'Donnell said, although he conceded that it's not clear how much a celebrity endorsement can help a smartphone. Previous BlackBerry devices have been promoted by singer Bono and the hip-hop group Black Eyed Peas without great success, he noted.

Observers have said that the relatively small number of apps available in the BlackBerry World app store, now about 70,000, has been a significant deficiency for the company. By comparison, both Apple's App Store and Google's Android Market each have about 10 times as many available apps.

O'Donnell, though, said the number of BlackBerry apps is sufficiently broad for both consumers and business professionals. "How many apps does a person really need?" he said.

BlackBerry said Facebook, Twitter, LinkedIn and Foursquare apps will be pre-installed on the new devices. The devices can also access WebEx from Cisco, Foursquare, Skype and Rovio, among others.

Several reviews of the Z10 appeared shortly after the device was announced, including some by reviewers who had used it for more than a week.

The Wall Street Journal's Walt Mossberg called the Z10 a "work in progress" while CIO.com reviewer and blogger Al Sacco praised many features, such as a quick-reaction touchscreen and the ability to "flick" corrected words from the virtual keyboard onto the display area of the touchscreen.

The Z10 has a 4.2-in. Display with 1280 x 768 resolution. The Q10 has a 3.1-in. display and a 35-key physical qwerty keyboard. The Q10 is not as lengthy as the Z10 and is slightly lighter, but otherwise almost the same size. Overall, the Z10 is 5.1 x 2.6 x 0.35 inches and weighs 4.8 ounces, and the Q10 is 4.7 x 2.6 x 0.4 inches and weighs 4.9 ounces.

Both devices run a dual-core 1.5 GHz Qualcomm Snapdragon processor. Both have 2GB RAM and 16GB internal storage with a microSD slot for up to 32 GB for the Z10 and 64 GB for the Q10.

Also, both devices have an 8 megapixel rear camera and a 2 megapixel from facing camera.

Both smartphones have NFC capabilities for mobile payments and file sharing, and will support Wi-Fi and 4G LTE or HSPA+.

BlackBerry didn't specify battery life for the Q10, but said the talk time on the Z10 is 10 hours on a 3G network. Heins said both devices have removable batteries so a power user can carry a second battery to insert once the first is drained.

BlackBerry didn't specify U.S. pricing plans, and said that carriers will announce their prices for the devices later. In Canada, the Z10 will ship on Feb. 5 for $149.99 and a three-year contract.

The first shipments of the Z10 will be in the UK starting Thursday. BlackBerry devices are more popular in the UK and most of Europe than in the U.S. The BlackBerry Messenger messaging service is also heavily used in Europe and the U.K.

Outside of the U.S., the name will be written as Z10 but unlike in the U.S. it is pronounced Zed10, according to BlackBerry officials.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed . His e-mail address is mhamblen@computerworld.com.

Read more about mobile/wireless in Computerworld's Mobile/Wireless Topic Center.

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