New BlackBerry phones don't wow investors, but analysts see promise

RIM changes name to BlackBerry, unveils two new smartphones, and sees share price fall

NEW YORK -- RIM's share price dropped more than 6% on Wednesday, after the company announced that it was changing its name to BlackBerry and unveiled two new smartphones, the touchscreen Z10 and the qwerty keyboard Q10.

BlackBerry Z10
The BlackBerry Z10 smartphone. (Photo: BlackBerry)

While investors appeared disappointed by the news, several analysts attending the announcement here said the new offerings -- and the new name -- give struggling BlackBerry a reasonable chance of turning its business around.

Shares were trading at $14.84 at 1 p.m. Eastern time, down 81 cents from Wednesday's opening.

BlackBerry's declining subscriber base now stands at 79 million, with enterprise customers making up barely 25% of that -- a marked reversal from three years ago.

The two new smartphones -- the first to be unveiled by the Canadian company in 18 months -- appear to bridge the two major smartphone audiences: Consumers and businesspeople, analysts agreed.

In fact, record numbers of people are buying personal smartphones to use at work -- a trend that is blurring the divide between the consumer and enterprise markets.

"More smartphones for work are purchased by individuals, not IT," said Bob O'Donnell, an analyst at IDC.

The photo and video capabilities in the Z10 and Q10 "will appeal to consumers," while enterprise IT managers will welcome the embedded BlackBerry Balance technology, which makes it possible to create two separate secure spaces on the phones -- one for corporate data and one for personal files.

O'Donnell went so far to say that chinks in the armor of Apple's iPhone may give the Z10 a slight opening.

"Is iPhone still cool? There's some iOS fatigue. And for some, iOS is feeling old," he said. "That leaves an opening for BlackBerry, although it might be a small opening."

O'Donnell and Jack Gold, an analyst at J.Gold Associates, said that U.S. buyers will likely be disappointed that the Z10 won't be available from the four major wireless service providers until mid-March.

The Q10 will be available in April, according to BlackBerry CEO Thorsten Heins, but Sprint on Wednesday said only that it would begin carrying the Q10 sometime in the coming months.

Heins also explained at today's gathering that Research In Motion decided to adopt the brand name BlackBerry as its company name because the brand name is well known globally.

O'Donnell and Gold said BlackBerry, which currently holds less than 5% of the global smartphone market, faces an uphill challenge in marketing and selling both devices.

"Is this strong enough to drive them forward? It depends on marketing," O'Donnell said. "Are they big enough salmon to jump back to the spawning ground?"

"I think they have a good chance of making a comeback," added Gold. "It's not just a me-too announcement of features."

The company formerly known as Research In Motion will try to score in the smartphone game with the launch of a new OS, two new handsets and a new company name. Can they do it?

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