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Launch of RIM`s 3G BlackBerry Faces Delay - Report

By Reuters -  |  Posted 2008-04-25 Print this article Print

A report surfaces claiming that the next-generation BlackBerry from Research in Motion will be delayed. 

OTTAWA, April 25 (Reuters) - Research in Motion (RIM.TO: Quote, Profile, Research) shares fell 3 percent on Friday after a Fortune.com story said that a high-speed wireless version of its BlackBerry smartphone for top U.S. phone company AT&T Inc (T.N: Quote, Profile, Research) is facing delays.

The introduction has been pushed back as far as August from June, the story on Fortune magazine's website said, citing unnamed people close to the companies. The reason for the delay was unclear, but AT&T had worries about call quality, the report said.

RIM and AT&T declined comment on the report, which also said the delay could hurt RIM phone shipments and subscriber growth in its second quarter ending Aug. 30.

But one analyst said the delay isn't news, pointing to a January report in which he flagged a later-than-expected launch.

Canaccord Adams analyst Peter Misek downgraded RIM on Jan. 11 to a "hold" rating, citing a 3G device delay until June as well as U.S. economic weakness.

Misek wrote on March 31 that RIM's 3G BlackBerry had just recently been delivered to AT&T and Vodafone labs and he repeated his February forecast that the launch was now likely delayed to August.

RIM had to work with its chip supplier Marvell (MRVL.O: Quote, Profile, Research) to resolve technical problems, said Misek. He believes those issues are now sorted out and that network certification, which takes about three months, is the last hurdle.

"I'm very, very disappointed that the market finds this as any kind of news. It's not going to have any impact on the August quarter and we've always said this device is going to be delayed," he said. "I'm just really surprised more people didn't know about it."

Shares in Waterloo, Ontario-based RIM fell C$3.77 to end at C$122 on the Toronto Stock Exchange and dropped $3.62 to $120.02 on Nasdaq on Friday.

The phone, which Fortune.com said may be called Meteor, will likely be unveiled by RIM within six weeks, Misek predicted.

AT&T Chief Financial Officer Rick Lindner referred to plans for a high-speed BlackBerry with third generation, or 3G, technology on a quarterly earnings conference call earlier this week, but did not give a date for the launch.

"We're just starting to see a BlackBerry 3G come out. As those integrated devices move to 3G, I think that will be the next catalyst to drive stronger 3G growth," he said.

"New customers coming in today, if they are buying a phone, many times, particularly postpaid customers, they're primarily going to 3G."

RIM has said it will introduce devices based on HSDPA, a high-speed 3G wireless technology that is popular in Europe and used by AT&T.

"Certainly going to HSDPA is something that's very important to us in the near term," Chief Executive Jim Balsillie told Reuters in a February interview.

TD Newcrest analyst Chris Umiastowski speculated about the timing of RIM 3G device shipments in a recent note that lowered his earnings estimates and stock target.

"We believe the device is on track to be available either at the end of May or in June. That said, we are not yet clear on when AT&T will start selling the device," he wrote.

"Perhaps it will launch in Europe (with Vodafone) prior to hitting North American soil?...A launch of this upcoming 3G device either by AT&T or Vodafone should result in a significant number of hardware shipments within the first full quarter of launch."

AT&T and rival carrier Verizon make up about 40 percent of RIM's new subscriber growth, the analyst estimated.

AT&T, the exclusive U.S. carrier for Apple Inc's (AAPL.O: Quote, Profile, Research) iPhone, a competitor to BlackBerry, hinted at a U.S trade show earlier this month that it expects to have a 3G version of iPhone in coming months. It did not give a specific date.

($1=$1.02 Canadian) (With additional reporting by Sinead Carew in New York; Editing by Peter Galloway)

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