Motorola to take on BlackBerry: Company to invade RIM s space with new device

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Motorola to take on BlackBerry: Company to invade RIM s space with new device TORONTO, Sept. 10 Motorola Inc. is poised to launch a product that could deal a deadly blow to Research In Motion Ltd. s position as the sole maker of an always on, e-mail device, an analyst said. THE MOTOROLA OFFERING, expected in the next few weeks, is seen as a major, albeit inevitable threat to RIM s BlackBerry device, because network carriers will retain all monthly subscriber fees charged to users, rather than pay royalties to the device maker as it does to RIM, said Mark Hugh Sam, an analyst at Dundee Securities in Toronto. Motorola was not immediately available for comment. Hugh Sam said the Motorola device will include software to be offered free to network carriers, like BellSouth or Rogers AT&T in Canada. The software, controlled by the network, is the key to sorting, deciphering and pushing e-mail to a device. The Motorola Accompli 009 will be the first device to offer the exact same solution as the RIM , with Rogers AT&T Wireless a Canadian carrier currently supporting the RIM device being the first carrier to offer it on their upgraded GPRS network, said Hugh Sam. He said the Motorola device has the potential to undermine the revenue model for RIM because currently RIM is paid $7 to $10 per month per user on a network s system a large part of how RIM expects to make money on their devices. Motient and Rogers hate having to pay RIM 25 percent of their monthly revenues. They would like to get it for less, said Hugh Sam, who learned of Motorola s plans through a source that wishes to remain anonymous. He downgraded shares of RIM to a sell based on the Motorola threat, and because of other competing products being released by Palm Inc. and Handspring. RIM has held the prized position of being the only company with an always on, always connected e-mail device that securely redirects e-mail to the its BlackBerry device, and analysts have said the company had a 6-12 month lead on competitors. I m not dismissing them (Motorola)…they are a very powerful company and I hold them in high esteem, said Jim Balsillie, RIM s chairman and co-chief executive. But concepts are concepts. Working products and return on investment are what customers buy. Balsillie said corporate customers, of which RIM has over 10,000, are not interested in dealing with networks on a one on one basis, and delivering data to a wireless device is a very complex process. It s important for people to understand this is a system, and you need to solve all aspects of the system. Shares of RIM closed up 2 cents at $14.74 on Nasdaq Monday. They have dropped 50 percent in the past two months as investors worry about mounting BlackBerry inventory at RIM s resellers and price cutting. RIM is going to be in a world of hurt. They are coming under a lot of competitive pressure now that the business market isn t adopting it as fast as thought, said one industry analyst. Someone is going to come out with a cheaper handheld that AOL and others are going to want to sell. Motorola has already signed deals with Vodafone and Telefonica in Europe, which only leaves BT Cellnet already offering the RIM device and smaller European cellular players for RIM to sell through, added Hugh Sam. Deutsche Telekom is waiting to see how BlackBerry sells within its North American subsidiaries, he added. RIM said in June that it expects to ink deals with as many as 12 network carriers in the next 12 months to distribute and support the BlackBerry in Europe and North America. 2001 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters.

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