Shares of Research In Motion jumped on Wednesday on speculation that next week it would unveil a new touchscreen BlackBerry that could compete more effectively with Apple Inc's iPhone and other smartphones.
RIM is expected to announce the launch of the BlackBerry 9800 at a joint event with AT&T Inc in New York next Tuesday. AT&T is expected to get exclusive U.S. rights to sell the new device.
Industry watchers say the 9800 will boast a new operating system, a revamped web browser and full slide-out keyboard -- features designed to revitalize a product lineup that critics say looks out of date.
A smooth launch is critical for RIM, analysts say. Its stock has fallen by a third in the past year as the iPhone and devices running on Google Inc's Android software eat into its share of the key North American market.
For RIM, the timing of the event seems fortunate. Apple has taken a rare misstep with the launch of the new iPhone 4, with complaints about the model's antenna design putting the company on the defensive. That may allow the 9800 to steal the spotlight, however briefly.
This is an opportunity for RIM to respond, not only on the operating system and browser-side, but equally importantly, that they have a nice smooth operating piece of hardware, Mackie Research Capital analyst Nick Agostino said.
The 9800 is viewed as RIM's bid to finally silence its own critics, who have complained about a clunky web browser, a humdrum applications store and a product lineup that's missing a compelling touchscreen device.
RIM's overseas sales have grown steadily, but gains have largely come from sales of low-end devices that have weighed on the company's average selling price. RIM is also facing more competition within its once-secure business enterprise segment, as some companies are allowing employees to swap BlackBerry devices for other smartphones.
ON SHELVES MID-AUGUST?
Shares of RIM rose as much as 4.5 percent on Wednesday. They closed just shy of their session-high at $55.41, up $2.23 or 4.2 percent on Nasdaq. In Toronto, the stock ended up C$2.40, or 4.4 percent, at C$57.55.
In the options market, investors are positioning for extended gains in RIM by selling puts and buying calls set to expire on August 20, said Caitlin Duffy, equity options analyst at Interactive Brokers Group in Greenwich, Connecticut.
Analysts expect RIM to officially take the wraps off the 9800 on Tuesday and announce that it will be on the shelves in the middle of August in time for the lucrative back-to-school retailing period.
The earlier they are going to say it is going to be available on the shelves the better. They don't want to miss one of the key seasons, said Avian Securities analyst Matt Thornton.
RIM declined to comment.
The Waterloo, Ontario-based company first gave a sneak peek of its new operating system, modern interface and what promises to be a fast, accurate and easy-to-use Web browser in April and said a launch would come before the end of August.
Images and pictures of what purports to be the 9800 device have since popped up on numerous blogs.
AT&T initially is expected to get exclusive U.S. rights to sell the new BlackBerry handset, analysts said. The company also has the exclusive franchise for the iPhone in the United States.
We expect the new RIM slider to receive 'hero' treatment from AT&T, and for the carrier to promote the product aggressively, Morgan Stanley analyst Ehud Gelblum said in a note to clients.
The handset is likely to be launched in Canada and Western Europe later in the year, possibly October, in time for the holiday season, Avian's Thornton said.
(Additional reporting by Doris Frankel in Chicago; editing by Frank Mcgurty)