June 5, 2006

RIM Sees More Government, Military Users

CHICAGO -- Blackberry handheld devices are getting the nod from more government and military users, helping Research In Motion win even more credibility in the corporate sector, the company's co-chief executive said on Monday.

RIM Co-Chief Executive Mike Lazaridis said the company has at least six military or government certifications awaiting approval. Already Blackberrys, the devices that combine telephone and e-mail use, are certified for some restricted data use in the United States, Britain, Australia and Canada, among other countries, he said.3

"What's really exciting for me is all of the pending certifications we've got Blackberry in," Lazaridis said during a keynote address at the Globalcomm 2006 telecommunications industry trade show in Chicago. "You're going to see more and more of those certifications being announced over time."

Increased government and military use makes it easier to sell Blackberrys to the company's core corporate customers, he said. Government and military users have grown to slightly less than 10 percent of Blackberry users worldwide, Lazaridis told Reuters in an interview following his speech.

"That was a big selling point for Blackberry in the past and it's becoming more so now that everyone is more security conscious," he said.

Blackberry still maintains the largest global share of the market for PDAs, or personal digital assistants, with a presence in some 60 countries and 160 carriers, but RIM is facing stepped up competition.

No. 2 worldwide cellphone maker Motorola Inc. began selling its Q handset on May 31, the first in a new family of smart phones aimed at Blackberry's business-oriented customers. The Q runs on Microsoft Corp. software and has a miniature keyboard designed to make writing e-mails easier.

"I think the market is very large," Lazaridis said in response to a question about whether RIM is feeling pinched by the Q phone's launch.

RIM is based in Waterloo, Ontario, Canada.

He declined to talk about current demand for the Blackberry, but said several new products have gotten favorable responses from the industry. They include the 8707V and 7130G phones in Europe and the 7130E phone in North America, as well as two enterprise server technologies.

"We're just knocking them over," he said. "I can tell you that they were very well received."

Lazaridis was cautious about providing details for any pending product launches, but he said that in general customers should expect sleeker Blackberry models in the future.

"As it turns out, the next big thing is a smaller Blackberry ... smaller, thinner, lighter, all of those things."

As the use of wireless networks increase and more consumers demand sophisticated applications, such as video, RIM and other manufacturers must remain keenly tuned in to providing efficient hardware and software that do not clog up networks' limited bandwidth, Lazaridis stressed in his keynote address.

"We have to be very careful," he said. "Anything that is bad usage of wired networks becomes an incredibly bad usage for wireless networks."