BlackBerry has new phone

Stock climbs to record on Nasdaq

Bloomberg News

May 13, 2008

Research In Motion Ltd. climbed to a record on the Nasdaq stock exchange yesterday after the introduction of a BlackBerry phone with quicker Web browsing and more space for video and music, stepping up competition with Apple Inc.'s iPhone.

Research In Motion shares surged $9.20, or 6.9 percent, to close at $141.97, their biggest gain in two months.

James L. Balsillie, the company's co-chief executive officer, beat Apple to the punch with the new BlackBerry Bold, due this summer. Apple probably won't announce a faster iPhone until next month, analysts say. The new device also may help Research In Motion maintain its margins, countering concern that new models are eating into profit.

The Bold will be as profitable as earlier products, Balsillie, 47, said yesterday in an interview with Bloomberg Television. "We expect to be consistent with the margins in our business."

Analysts such as Kenneth Leon of Standard & Poor's have predicted a drop in profit margins as Research In Motion pushes into the consumer market. Gross margin, the share of sales after production costs, fell to 51.3 percent in the fiscal year that ended in March, from 54.6 percent 12 months earlier.

The BlackBerry Bold is aimed at business customers and so-called power users, Balsillie said.

The product sets up a showdown with Apple CEO Steve Jobs in the market for so-called third-generation phones, which offer speedier Web access and video downloads. Phones with Internet, e-mail and video are the fastest-growing part of the handset market, with users quadrupling to 400 million in the next three years, RBC Capital Markets estimates.

Research In Motion shares have almost tripled in the past 12 months, while Apple is up 73 percent over that span.

AT&T Inc., the biggest U.S. mobile-phone carrier, will offer the Bold for $300 to $400 this summer, Balsillie said. The device, which also will go on sale in Europe and Asia, is the first BlackBerry to use high-speed downlink packet access, or HSDPA, a network technology that speeds data delivery.

The Bold has a brighter screen and better Web browser than previous models, as well as satellite navigation and a video camera.

Since the iPhone's debut last June, Apple has seized the No. 2 spot in the U.S. market for so-called smart phones, handsets with computer and Internet functions. The BlackBerry ranks first.

To fend off the iPhone, Research In Motion has expanded beyond business customers, releasing devices that have music players and cameras. The new BlackBerry lets users listen to songs from Apple's iTunes music program.