SAN FRANCISCO -- Get ready for a titanic 3G-phone war this summer.
That's when BlackBerry maker
Research In Motion
will be rolling out their flashy products at the high-end smartphone market.
RIM is set to launch
, the BlackBerry Bold, a feature-packed smartphone with functionality and style. Apple is preparing its own response in the form of the much-awaited 3G iPhone.
At its analyst day Monday, the Waterloo, Ontario-based RIM unveiled the BlackBerry Bold phone, the first in its stable to support high-speed HSDPA 3G networks.
Apple Might Not Win the Smartphone War
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The phone also sports a sophisticated design that includes a faster processor, integrated GPS, media player and 2-megapixel camera. RIM hasn't announced the pricing for the device yet but said it will be available this summer. Some analysts believe the device could debut on
There are certainly glaring differences between BlackBerry's latest phone and Apple's iPhone. "The Bold is not a touch screen, has a keyboard and it doesn't do music as well as the iPhone," says Darren Chervitz, director of research with the Jacob Internet Fund, which holds Apple shares. "And the iPhone is yet to do email as well as the BlackBerry."
Still competition between the two companies is likely to heat up.
"This is the first shot of the RIM-Apple war that is starting," says Samuel Wilson, an analyst at JMP Securities in a research note. JMP Securities does not own shares of RIM or have an investment banking relationship with the company. "These two companies are squaring off against one another."
The New Blackberry Bold Is Smokin'
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Investors are cheering the latest announcement. RIM shares rose $8.91, or 6.7%, to a 52-week high of $141.68 in recent trading. The stock has gained nearly 25% since the beginning of the year.
Apple shares were up $4.24, or 2.3%, to $187.72. Apple's stock has shed about 3.5% this year. The
composite index fell about 5.2% during the same period.
Separately, RIM said it has set up a BlackBerry Partners Fund, a $150 million venture capital fund, in partnership with RBC and Thomson Reuters to drive development of mobile applications and services for the BlackBerry and other mobile platforms.
Apple has its own iPhone Developer Program set up
with venture firm Kleiner Perkins Caufield & Byers, but at $100 million it is smaller than RIM's fund.
Industry watchers widely expect Apple to unveil the next iteration of the iPhone in the next few weeks, setting the stage for a confrontation between the two devices.
RIM is already claiming victory in the first round. "RIM believes that it has gained notable North American market share in the first quarter vs. Apple," says Wilson. "RIM stated that Apple went from high-20s share to high-teens share, while RIM went from mid-30s to mid-40s share."
Wilson believes the gains could be from RIM making its blockbuster Pearl phone available on
Still, an all-out war between RIM and Apple is a while away, says Chervitz.
"At least for the first generation of the 3G devices, Apple and RIM are going to appeal to their respective audiences," he says.
So far, RIM and Apple, though playing on the same turf, have managed to skirt direct competition. Apple's iPhone has been seen as a device targeted at consumers who want their music and a sleek phone in a single package, while the BlackBerry has been a staple of business users.
But the two companies are increasingly likely to run head-to-head in the future, says Chervitz. "They both offer premium priced products that appeal to a certain segment of buyers."
Adam O'Donnell who works as director of emerging technologies with an information security company is likely to be one of the buyers that both Apple and BlackBerry will be vying for.
O'Donnell currently owns a
Razor phone but says he will be standing in line for the 3G iPhone when it releases.
Usability, interoperability with his laptop and design are what draws him to the iPhone, says O'Donnell who already uses a Mac laptop.
"I want something that is more than just mobile e-mail," he says. "My business and personal life don't have a really fine delineation so having tools that are optimized for one or the other isn't appealing to me."
The BlackBerry Bold, while interesting, doesn't impress O'Donnell. "The iPhone software is being continually upgraded without upgrading the device," he says. "You really can't say the same for the BlackBerry at this time."
Getting someone like O'Donnell to switch sides will be RIM's challenge as it prepares to roll out its latest phone.