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    BlackBerry still dominant despite change in Rogers marketing  
    Globe and Mail  
   

ROMINA MAURINO AND DAVID PADDON

 
    October 04, 2007  
   

TORONTO — — BlackBerry maker Research In Motion has little to fear from Rogers Communications' decision to put its considerable marketing muscle behind rival products using the Microsoft Windows Mobile operating system, analysts say. They suggest the move may be a play by Rogers, which is a long-standing retailer of RIM products and reputedly the biggest BlackBerry supplier in Canada, to get RIM to lower its prices — a plan that would itself likely entice more people to buy BlackBerry.
But the analysts also said Waterloo, Ont.-based RIM will likely retain its title as the world's No. 1 supplier of handheld devices designed for wireless e-mail.
"RIM is the most successful brand in the world of that type of device. All of the other people in that business, whether that's Microsoft or even Apple, are all coming a distance second, third, fourth and fifth to RIM, so I don't think RIM has a lot to worry about," said Iain Grant, an analyst with The SeaBoard Group.

"Rogers, however, knows that RIM is the most successful brand doing that type of thing in the world, and Rogers needs to have some bargaining power when it talks to RIM. It's always important to have a competitor and if you haven't got a strong competitor, you create one."
Rogers' wireless division said Wednesday it was launching a "multi-million-dollar" ad campaign and beefing up its customer-care services in a major push to support hand-held devices by several manufacturers using Microsoft's operating system.
RIM and Microsoft have long worked together to integrate their respective software so that messages can smoothly and securely travel from sender to recipient over wireless communications networks and through corporate e-mail systems, such as Microsoft Exchange However, unlike its major competitors, Research In Motion designs and manufacturers both the hardware and software required for BlackBerry communications. It also works closely with more than 100 wireless networks around the world that sell BlackBerry products to their customers and carry message traffic on their infrastructure.

The announcement by Canada's largest mobile phone service could be seen as a challenge to the BlackBerry but a Rogers Wireless spokesman says he thinks the Windows Mobile-type of devices will likely appeal to a different customer base.
"We're not counting on any displacement or cannibalization, whatsoever," Rogers Wireless vice-president John Boynton said in an interview ahead of the official announcement.
He acknowledged that, over the years, there have been numerous products dubbed "BlackBerry Killers" - products with the potential to push the Canadian-made BlackBerry out of the market - but added he doesn't think the term applies here because there's room for both BlackBerry-type and Windows Mobile- type devices.
"BlackBerry continues to be the closest partner we have and we continue to hit record levels of volume in BlackBerry," Boynton said. "But there are people out there who want something different." For example, he said, there are a lot of mobile workers need to be able to edit e-mail attachments on the fly "and they just can't do that with the BlackBerry solution as it is today."


In addition, some customers have their own software for Windows environments and others that feel ill- equipped to deal with the technical requirements and costs of running BlackBerry systems in addition to their other information technology.
"So we think there are customers out there who have one of those needs that aren't suited to today's solution and we think there are customers out there who love the BlackBerry . . . "
Rob Sanderson, an analyst with American Technology Research, said there were some people who are interested in "non-RIM solutions" and carriers want to provide all services where there might be interest."Rogers - and nearly every other carrier - has a long history of offering alternative solutions, as well as BlackBerry," he said.
"To date no carrier has seen success on Microsoft or any other alternative that comes anywhere near the success of BlackBerry. This doesn't mean competitors will stop trying or that RIM will get 100 per cent of the business, but BlackBerry is by far the preferred solution in the market. "
Grant said that even if a carrier like Rogers succeeded in getting RIM to lower prices, the company is unlikely to suffer."If (Canadian carriers) lower their prices, they will find more people use them," he said.
A spokeswoman for RIM didn't immediately respond to requests for comment. However, in the past company officials have said repeatedly that they welcome competition - even from larger companies including Microsoft - and remain confident of the ability to find growth opportunities.
On the TSX Wednesday, RIM shares were trading at $96.85, up 82 cents, while Rogers was up 87 cents, or near two per cent, at $47.78 with 1.7 million shares traded.

 


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