BlackBerry's Pearl Smart Phone Takes On Treo, Q

NEW YORK/LONDON – Research In Motion Ltd (RIMM), the maker of Blackberry e-mail devices popular among executives, said on Thursday it is pushing into a wider consumer market with the Pearl, its first phone with a camera and music player.

Canada's RIM plans to launch the device with T-Mobile USA, the No. 4 U.S. wireless service, on September 12 and expects a number of other carriers to start selling the product this month and in October, Co-Chief Executive Jim Balsillie said.

"It's going to be a main product for us in all our markets," Balsillie said in an interview, adding that the majority of RIM's more than 170 operator customers are very interested in selling the Pearl.

The phone has been widely anticipated and investors, viewing the expansion beyond a predominantly business customer base as a potential boost for RIM's revenue growth, have pushed RIM's share price up 23 percent in the last month.

According to IDC, Blackberry leads the U.S. market for smart phones, which have computer features such as e-mail, but rivals such as the Treo from Palm Inc. (PALM) and the Q from Motorola Inc. (MOT) already sport cameras and media players.

As service providers around the world peg hopes for future growth on services such as music and video downloads, RIM is hoping to jump on the bandwagon with a device that has a 1.3 megapixel camera, a video and music player and a slot to add extra storage space, as well as its popular e-mail feature.

RIM sees the phone giving it a bigger target market as it hopes consumers who have not bought Blackberry due to its lack of media features and existing Blackberry users who also want media features will be attracted to the new phone.

"It really is our attempt to take Blackberry out of the boardroom," Larry Conlee, RIM's chief operations officer, said at an RIM event in London. "That's a big opportunity for Blackberry," he added.

Analyst Nick Spencer at market research firm Canalys said the phone would likely increase volume sales at RIM.

"This puts Blackberry in the millions rather than the hundred-thousands," said Spencer, who believes the phone is one of the smallest "smart phones" with computer-like features.

Spencer estimates 180 million smart phones will be sold in 2009. In comparison, the total market for cell phones is already expected to approach 1 billion in 2006.

Balsillie said RIM would market this phone more aggressively than previous devices but did not give details.

Since the phone is aimed at a wider consumer audience, RIM has to support a larger-scale distribution channel, Balsillie said.

Widespread rumors about the upcoming phone did not affect sales of existing products, Balsillie said. He would not say if RIM would meet its forecast of 675,000 to 700,000 new Blackberry subscribers for its second fiscal quarter ended September 2. But he appeared confident.

"If you're not doing well you have to preannounce. We didn't preannounce," the executive said.

T-Mobile USA, owned by Deutsche Telekom AG (DT), said it would charge $199 for the phone to customers who sign up for a two-year contract.