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10/05/2010 Analysts: Torch Lights Way for RIM

The world got a look this morning at what Research In Motion (RIM) will be hanging its hat on going forward, namely BlackBerry 6 OS and the BlackBerry Torch. While both are marked improvements on RIM’s existing OS and device portfolio, the question of the day seems to be, “Are they enough?”

When taken in context, the Torch and BlackBerry 6 bring RIM at least partially up to speed with competitors like the iPhone 4, Motorola Droid X and HTC Evo 4G. Charles Golvin, principal analyst for Forrester Research, says the Torch goes a long way towards putting RIM on even footing with the rest of the industry, whether you’re talking about the consumer or enterprise segments.

“I think it’s a big move because it puts them on even ground with Android and iOS, at least from a touchscreen perspective,” Golvin says, adding that the versatility of a slide-out qwerty offers longtime users the option of the keyboard that many are used to on a RIM device.

Kevin Burden, vice president and practice director of mobile devices for ABI Research, says the Torch manages a tightrope act between what a modern smartphone is supposed to look like and what IT departments and users expect of a BlackBerry device.

“I see it as a kind of revolutionary evolution,” Burden says. “It manages to appease IT departments, while also appeasing consumers with a more modern look and feel.”

Burden says that while the obvious consumer features – Wi-Fi, universal search, unified inbox – that RIM uses to dress up the Torch are well done, a continuity of experience was the biggest challenge posed by these most recent upgrades.

As for increasing RIM’s lagging average selling price (ASP), Golvin says it depends on what the mix is going to be. "If this all they have, then certainly that would boost ASPs, but I think that there’s going to be something that fills the Curve spot and that’s going to be priced more like the current Curve is priced today,” he says, noting that that part of RIM’s strength has been the breadth of its offerings, from high-end devices like the Bold to lower-end devices like the Pearl, which target the consumer market.

“Anybody who still thinks of BlackBerry as an enterprise thing clearly hasn’t been paying attention to the past couple of years where a lot of their growth has really come from the consumer market,” Golvin says.

“Take it as an indicator of what’s coming,” he says when asked whether the Torch and BlackBerry 6 are enough for RIM to stay competitive. “One of the benefits of BlackBerry has always been that you don’t have to switch carriers to get it… I think it’s very much RIM’s plan and in their interest to have a BlackBerry 6 device on the Sprint network, on the Verizon network on the T-Mobile network as soon as possible.”

Golvin says that while AT&T as an exclusive carrier for the Torch isn’t surprising (it was the first carrier to get the 3G Bold), the new device is a natural fit as it looks to wean from its dependence on the iPhone 4 exclusivity, which many believe will expire in the near future.

But is this a "remarkable" move by RIM? Burden says that while he wouldn’t use that word exactly, because to him "remarkable" means something unexpected, the Torch is a substantial step forward. “This gets BlackBerry pretty close to Android and iPhone, but maintains continuity with the old way of doing things."

Burden is quick to add that RIM’s backend services, such as e-mail, are still top-notch. “The reason why RIM has been so successful is because they had the most compelling experience around e-mail. That's still true,” he says, adding that RIM doesn’t have to build a tablet or lose focus to continue to grow as a company.

“Smartphones still only represent about 16 to 20 percent share of total handsets. RIM has to realize that there’s still a lot of room to grow here,” Burden says.

To be sure, RIM has evened the playing field, and Golvin emphasizes that the company is an established institution within the wireless industry that isn’t going away anytime soon.

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