BlackBerry Torch: Just What the Doctor Ordered?

Aug. 3, 2010— -- The new BlackBerry Torch has some high expectations to meet.

Unveiled today by executives from Research in Motion (RIM) and AT&T, the phone is RIM's first touchscreen smart phone to include a slide-out typewriter keyboard.

But it's also the Canadian company's latest attempt to show investors and consumers that it can keep up with the ever-popular Apple iPhone and Google Android phones that threaten its market share in the United States. The new phone also comes after a wave of negative news about the United Arab Emirates' decision to ban the phone starting in October.

Don Kellogg, senior manager for telecommunication research and insights at the Nielsen Co., said RIM had a lot riding on today's announcement.

"The stakes were high," he said. "We released a report recently showing a pretty high percentage of folks that have BlackBerrys are looking at iPhones and Android devices as well."

Nielsen: Half of BlackBerry Users Could Migrate to Other Phones

Half of the BlackBerry users in the United States could potentially switch to an iPhone or Android phone when they make their next mobile phone purchase, according to Nielsen research published Monday.

Second-quarter Android sales climbed 900 percent from a year ago, claiming 34 percent of the U.S. market and leaving RIM with 32 percent, another report released Monday by research firm Canalys concluded. RIM led the U.S. smart phone market in 2009 with a 46.7 percent share, according to market intelligence firm International Data Corp.

But the new BlackBerry Torch 9800 -- and the new BlackBerry 6 operating system -- might be enough to keep BlackBerry users from looking for greener pastures, Kellogg said.

"Up until this point, BlackBerry users had to choose between getting a touchscreen device through BlackBerry, like the Storm, or getting a traditional QWERTY [typewriter keyboard] device, like the Tour," he said.

"I think in a lot of ways, this device kind of allows users to have their cake and eat it too. ...I do think that this is an evolutionary step for BlackBerry."

The Web browser is on par with Apple and Android devices and the phone's multi-tasking and multimedia capabilities will go a long way toward keeping customers happy, he added.

Can BlackBerry Catch Up With Apple, Android Application Markets?

Charles Golvin, a principal analyst for Forrester Research, agreed that RIM's announcement demonstrated that it wouldn't be left behind in the dust.

"They integrated all kinds of applications and new features, [such as] universal search and taking advantage of multitasking capabilities of the operating system, as well as maintaining that unique keyboard experience that BlackBerry users love," he said.

But he said that questions remain about the BlackBerry's ability to rival Apple and Android when it comes to mobile applications.

"So much of what people who are moving to these devices or upgrading from another device ... are after is a range of applications, to know that there is the diversity and quality of applications available to them on this platform," he said.

Applications for everything from social networking to banking to gaming have been a major attraction for both iPhone and Android phone customers. But BlackBerry's application offerings have lagged behind those of its competitors.

BlackBerry and AT&T emphasized that they are improving tools and outreach for developers who can build applications for BlackBerry's new platform but they still have challenges to overcome, Golvin said.

One of the selling points for developers in the past has been the number of BlackBerry users who could potentially use their applications. But, Golvin said, applications built for the operating system unveiled today –- the BlackBerry 6 OS -- won't be able to run on the more than 100 million BlackBerry units the company has sold to date.

"With this new platform, they've essentially done a reset," he said. "They're starting from scratch."

But other analysts point out that even without a robust application market, BlackBerry phones have done well for themselves.

On a unit-shipment basis, RIM is still the No. 1 player in North America, said Kevin Restivo, senior research analyst for International Data Corp.

"RIM, it's not by any stretch in trouble or anything like that. But what's happening is technology has really, specifically smart phones and smart phone operating systems, has really blurred the lines between business users and consumers, which used to be very distinct," he said, adding that RIM has historically attracted business users.

BlackBerry Torch Goes on Sale Aug. 12

Although research indicated that BlackBerry customers might move away from the phone, he added, there's a big difference between thinking about switching and actually going through with it.

When it comes time to actually make the decision, he said, some customers might find that non-BlackBerrys don't work as well with business applications.

"I think it's inevitable in any technology market that it matures and that multiple players enter and grab share, especially in a fast-growing market like smart phones," he said. "This is not unexpected to have multiple players with lots of share growing very quickly."

The Torch goes on sale at AT&T stores and other retail locations Aug. 12 and will cost $199 with a two-year AT&T contract, or $499 without a commitment. The new phone is Wi-Fi enabled, and includes a 5 MP camera with flash and built-in GPS.