July 18, 2006

RIM Sees Media Features Building BlackBerry Market

TORONTO -- Media features and lifestyle applications will be key to the ability of Research In Motion Ltd.'s BlackBerry e-mail device to capture a bigger slice of the broader consumer market, the company's co-chief executive said on Tuesday.

"We'll be definitely supporting more forms of media, it's a big part of our direction," Jim Balsillie told Reuters, adding that delivering features such as photography, music and video with the BlackBerry "opens up some bigger markets."

"It's totally adjacent and complementary in some respects, but also in other respects it lays right on top (of) our existing market."

The BlackBerry has become a staple for business people, politicians, lawyers and other professionals, but has yet to gain widespread popularity among mainstream users of portable technology.

Balsillie declined to answer a question about the possibility of RIM partnering with Apple Computer Inc. to create what has been dubbed by some as the AppleBerry, a device combining the BlackBerry's features with iTunes music software, and potentially with camera and video capabilities.

He did not say whether any talks with Apple regarding a potential partnership had taken place.

Canaccord Adams analyst Peter Misek wrote in a note last month an AppleBerry combination would have "huge merit" and could take several forms, including Apple's iTunes being embedded into RIM's devices, or a completely new device co-developed by the two companies.

Balsillie also said on Tuesday that plenty of room to grow remains for the Waterloo, Ontario-based company, and added it continues to look for acquisitions to round out its technology portfolio.

"We're always looking at technology acquisitions, we're always looking at rounding out the sort of whole BlackBerry middleware solution proposition," he said. "Are we looking at some great big blockbuster thing? No."

He said service rollouts with its carrier partners are continuing, following RIM's recent announcement that Japanese mobile giant NTT DoCoMo Inc. will start selling BlackBerries this fall.

"We've got another 120 or 130 carriers to launch around the world, so it's still very busy," Balsillie said. "And I don't see that changing."

Observers have raised concerns over competition from Motorola's Q smart phone, which could eat into BlackBerry's market share. However, Balsillie said the issue is not one of concern for his company.

"We just haven't seen it impact our market," he said. "I know they're aggressively promoting it, aggressively pricing it, and it could be that it's finding traction in other places, but we definitely haven't seen it in our market."

RIM shares were up 88 Canadian cents at C$71.98 on the Toronto Stock Exchange on Tuesday afternoon. On Nasdaq, they rose 86 cents to $63.56.

($1=$1.13 Canadian)