RIM to offer BlackBerry Storm through China Telecom

Updated: 2010-05-18 14:08
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RIM to offer BlackBerry Storm through China Telecom

A BlackBerry smartphone user is pictured checking email in Washington, March 30, 2010. [Agencies]

Research In Motion Ltd will start selling its BlackBerry Storm smartphone with China Telecom Corp as it tries to gain an edge over rival China Unicom (Hong Kong) Ltd, the local carrier of Apple Inc's iPhone.

China Telecom will offer the touch-screen Storm for its business users starting Monday, according to an e-mailed statement. The carrier will initially make the e-mail device available in 16 of the country's 31 provinces. No details on prices were given.

RIM is looking to Asia as sales growth there outstrips the US, where the company gets more than half its revenue. The Waterloo, Ontario-based company has had an agreement since 2006 to sell a limited number of older BlackBerry 8700 models to corporate customers of China Mobile Ltd, the world's biggest phone carrier by market value.

RIM said in December that it will offer a handset customized for a locally developed Chinese technology with China Mobile. The Storm, which debuted in the US in November 2008, was criticized for its screen design and early software glitches, prompting RIM to introduce the Storm2 last October.

China Unicom began selling the iPhone on Oct 30. Apple said in April that sales there had risen to almost $1.3 billion.

RIM rose 9 cents to $66.25 at 4 pm New York time in Nasdaq Stock Market trading. China Telecom declined 2.5 percent to $HK3.45 in Hong Kong. The company made the announcement about 20 minutes before the Hong Kong market closed.

Low Expectations

RIM's contribution from China will be small at first, said Matt Thornton, an analyst with Avian Securities LLC in Boston. The Canadian company shipped 37 million BlackBerrys globally last fiscal year.

"Expectations for the BlackBerry should be kept in check, they're coming from essentially zero market share," said Thornton, who has a "positive" rating on the stock. "RIM is going to have to work very hard with their carrier partners to build the brand."

Subscribers may not rush to buy BlackBerrys as Chinese phone users use text-messaging more often than e-mail, which made the BlackBerry popular, Thornton said.

"E-mail isn't a killer app there and they don't have the distribution network or brand recognition in China that Nokia has," he said.

RIM, the world's biggest smartphone maker, trails Finland's Nokia Oyj in the Chinese phone market, according to Gartner Inc, a research firm based in Stamford, Connecticut.

Nokia has a 32 percent share of the phone market in China, according to Gartner. The region was Nokia's biggest market last year with 17.6 million phones sold in mainland China, Hong Kong and Taiwan in the fourth quarter.