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BW Businessworld

RIM Introduces New Torch Models

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Research In Motion unveiled two new versions of its touchscreen BlackBerry Torch on Wednesday as it seeks to regain ground it has lost to Apple and Google with powerful consumer-friendly models.

Investors reacted favourably, pushing RIM's deflated stock price up more than 5 per cent. But some analysts were sceptical, given delays leading up to this launch. They said a radically new software package due next year would be RIM's big test.

The new Torch models include an all-touch version that mimics the popular style of Apple's iPhone and most Android devices. Along with a previously announced upgrade to its workhorse Bold model, they are part of what the Canadian company called the biggest global launch in its history.

"The pure touch model could be very interesting. It has some great tech in terms of computing horsepower," said Will Stofega, a mobile device analyst at research firm IDC.

He dismissed concern that consumers would snub the devices while waiting for "superphones" due out next year using the QNX operating system that powers RIM's PlayBook tablet and said the phones could tempt buyers away from the iPhone.

"What people seem to want is a vibrant, iconic, shiny device," he said.

RIM has lagged its competitors in bringing out must-have phones with speedy browsers, and its PlayBook competitor to Apple's iPad launched to dismal reviews in April.

The company is slashing 2,000 jobs to reduce costs and streamline operations after reporting a fall in quarterly profit and a dismal earnings outlook.

Waiting For Superphones
It has already promised "superphones" next year using the QNX-based operating system that runs the PlayBook, so analysts are looking beyond this launch.

"This is a necessary product refresh in advance of the big bang that we hope and expect will happen with QNX-based phones," said John Jackson, vice-president of research at CCS Insight.

The three touchscreen BlackBerrys are RIM's most powerful yet. They run on an upgraded operating system, boast improved displays and pack a 1.2 GHz processor from Qualcomm as well as dedicated graphics processor that should make video and gaming sharper and more responsive.

RIM says the browser is 40 per cent faster than the original Torch, its last major phone launch, which hit shelves almost a year ago.

"RIM's new BlackBerry smartphones could well be the most important devices in the Canadian smart device vendor's history, following a recent slowdown in device shipments, staff cuts and doubts over the company's strategy and leadership," Ovum analyst Tony Cripps said.

All three devices will be launched by carriers around the world by the end of August, RIM said. The slider Torch, with both a keyboard and a touch screen, will be exclusive to AT&T in the United States from this month, the carrier said, while AT&T will offer the other phones later in the year.

The all-touch Torch is RIM's first attempt at the popular style since two versions of its Storm model failed to excite.

"It's definitely an acknowledgment that there are people that want that full-touch device," RIM's newly promoted global head of sales, Patrick Spence, said in a phone interview.

Looking Ahead
The timing could boost RIM's earnings for the quarter to late August as it sells the phones to carriers. But figures for user sales won't be available until the following quarter.

RIM shipped 13.2 million phones in the three months to late May - its first fall in shipments from a previous quarter since at least mid-2007 - as it pushed the launch of the latest products back to August.

RIM's aging hardware and software have looked increasing outdated as manufacturers such as Motorola, Samsung and HTC push out sleek, large-screen devices using Android and its applications.

Its market share has fallen steeply in the United States, according to data compiled by research firm Gartner. The global fall has been less severe, but from a smaller starting point.

"What would constitute success for these guys is essentially holding the fort," CCS's Jackson said. "A stop-loss outcome would be a success for these products in developed markets."

Shares of Waterloo, Ontario-based RIM have dropped 65 per cent from their peak in February. The stock rose $1.18 to $25.33 on the Nasdaq and was up C$1.19 at C$24.42 on the Toronto Stock Exchange.

The shares closed Tuesday at their lowest level in five years.