Google introduced a subscription music-streaming service, one of several product updates to be unveiled at a developer meeting this week as the search provider seeks to attract more users and advertisers.TORONTO – Research In Motion is counting on its relationships with 150 carriers to avoid the fate of another smartphone pioneer that fell on hard times – Palm Inc.
RIM’s BlackBerry 10, due to be introduced Jan. 30, has been compared by analysts to Palm’s doomed WebOS, a smartphone operating system unveiled four years ago. The technology drew rave reviews at the Consumer Electronics Show and sparked a stock rally for Palm, only to fizzle months later.
Like Palm, RIM rebuilt its latest operating system to compete with Apple’s iPhone after years of market-share declines. RIM also has received positive reviews for the changes, sending its stock up more than 80 percent since late September.
The difference this time is RIM has the support of carriers around the world, said Frank Boulben, chief marketing officer for the Waterloo, Ontario-based company. Palm relied purely on Sprint Nextel, the No. 3 mobile-phone service in the United States.
“They launched with one carrier worldwide,” Boulben said in an interview. “We are currently in the labs of 150 carriers around the world. We are not comparing things that are comparable.”
While Palm eventually added more carriers when the WebOS-based Pre phone was sold in Europe, the decision to debut with just one carrier in the U.S. was a “really, really bad choice,” said Alexander Peterc, an analyst at Exane BNP Paribas in London, who has a neutral rating on RIM. “RIM has wider carrier distribution going for it.”
Analysts such as UBS AG’s Phillip Huang and Morgan Stanley’s Ehud Gelblum have compared RIM to Palm over the past two months, suggesting that optimism surrounding the BlackBerry 10 is excessive. In 2009, WebOS excitement sent Palm’s stock to about $18 from $3, only to fall back below $4 the next year. Palm’s revamped phones failed to catch on with consumers, and the company agreed to a takeover by Hewlett-Packard in 2010. The products were discontinued the following year.
RIM’s rally “is reminiscent of Palm,” Huang said in a report last month.
There are technological similarities between the BlackBerry 10 and WebOS as well. RIM’s software lets users flip between apps with their fingertips, as the Palm Pre did in 2009.
RIM’s most loyal business customers will give BlackBerry 10 an initial boost. That could account for 5 million to 10 million units in the first full quarter BlackBerry 10 is on sale, Exane BNP Paribas’s Peterc said.
Wooing the broader public will be tougher, he said.
