Bloomberg News

Research In Motion Says IPhone May Help BlackBerry

March 28, 2007

Research In Motion Ltd. (RIMM:US) says Apple Inc. (AAPL:US)'s introduction of the iPhone in June may help drive sales of BlackBerrys.

``Hats off to Steve'' Jobs, Apple's leader, Research In Motion co-Chief Executive Officer Michael Lazaridis said in an interview yesterday at the CTIA Wireless conference in Orlando, Florida. ``He made smartphones cool again. Now everyone wants one. He helped the entire industry.''

Analysts such as Goldman Sachs Group Inc.'s Brantley Thompson had speculated that the iPhone, which blends an e-mail phone with the best-selling iPod music player, would take sales from the BlackBerry. U.S. sales of those types of phones may rise 43 percent to $6 billion this year, according to researcher Strategy Analytics.

Lazaridis, 46, contends that the two products aren't in competition because they target different users. Apple plans to sell 10 million iPhones next year, equal to about 1 percent of the global market. Research In Motion, based in Waterloo, Ontario, shipped (RIMM:US) 1.8 million BlackBerry e-mail phones in the quarter ended Dec. 2.

``We complement each other really well,'' Lazaridis said. ``We both focus on two entirely different markets. One is pure consumer and pure consumable. One is pure function and pure productivity.'' Research In Motion has sought to woo more consumer users with the Pearl, a device that includes a camera and a music player.

Natalie Kerris, a spokeswoman for Apple, declined to comment.

Research In Motion shares fell 7.9 percent Jan. 9, the day Apple introduced the iPhone. At the time, ICAP research director Richard Williams called the iPhone ``a considerable threat,'' saying Apple's reputation for designing ``cool'' products may lead customers away from the BlackBerry.

Slimmer Model

Research In Motion started selling a slimmer version of the BlackBerry in February. The BlackBerry 8800 has a music and video player, a global positioning system and a full keyboard. The 8800 is 14 millimeters (about one half-inch) thick, compared with 11.6 millimeters for the iPhone.

Motorola Inc., the world's second-largest mobile-phone maker, in February unveiled new versions of its Q e-mail phone, which competes with the BlackBerry. Nokia Oyj, the No. 1 mobile- phone maker, the same month showed three models for business use.

Research In Motion had 45 percent of U.S. sales for more advanced phones with e-mail in the fourth quarter, ahead of Palm Inc.'s 18 percent and Motorola's 12 percent, according to researcher IDC in Framingham, Massachusetts.

BlackBerrys Lead

Research In Motion shares fell $1.75 to $136.91 at 4 p.m. in trading on the Nasdaq Stock Market. Cupertino, California-based Apple dropped $2.22 to $93.24.

Apple's Jobs plans to sell the iPhone for $499 to $599 with a two-year contract from AT&T Inc. Research In Motion's Pearl costs less than a third of that, which may help the device win over customers, Lazaridis said.

Apple has sold more than 90 million iPods since Jobs released the player in October 2001, with 46.4 million gadgets shipped in the past year. The device had almost 75 percent of U.S. sales for music players in January, according to researcher NPD Group Inc.

To contact the reporter on this story: Ville Heiskanen in New York at vheiskanen@bloomberg.net

To contact the editors responsible for this story: Cesca Antonelli at fantonelli@bloomberg.net


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