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BBRY to Expand Smartphone Range

Zacks Equity Research

BlackBerry smartphone developer, Research In Motion Ltd. *(BBRY) – plans to roll out a broader range of handsets this year to cater to a bigger market as the company wants to target customers other than the business executive ones.

BBRY is aiming for a smartphone portfolio that includes high, mid and entry level phones based on its BB10 operating platform. Though BBRY hasn’t announced any specific time, the company expects the phone to be out in the market before Nov 2013.

BBRY will also target a touch screen and a QWERTY version for its mid and entry level phones, but will stop production if the range fails to attract customers. Additionally, the company is also working on its popular BlackBerry Messenger and other services to boost its revenues. 

However, the company will continue to market BlackBerry 7 models along with its latest BB10-based devices, in markets where owning a low priced phone is considered a better option.  

BBRY launched its much-awaited BB10 operating system (:OS)-based device on Jan 30, 2013 and has started selling the touchscreen version (Z10) of the smartphone in 25 countries. Initially, the device received a good response and has received a record single purchase order of one million handsets from a telecom partner.

However, according to media reports, demand for Z10 has fizzled out in the Gulf region, where it is a smartphone leader with a market share of 35%. Meanwhile, Z10’s U.S. launch with AT&T Inc. (T) also failed to create any meaningful result since its launch in Mar 22, 2013.

Our Take

BBRY is launching the lower version of BB10 based smartphone to counter the move by its rivals, Samsung Electronics Company and Nokia Corp. (NOK). Nokia has launched low-end version of its flagship Lumia device, while Samsung has also launched entry level version of its Galaxy smartphone that runs on Google Inc.’s (GOOG) Android platform. We believe that extending its smartphone range will not only allow BBRY to combat market share loss but will also restrict its loyal customers from switching to other OS.

Research In Motion currently carries a Zacks Rank #3 (Hold).

*Research In Motion announced that effective Jan 30, 2013, the company would operate around the world under the name BlackBerry. From Feb 4, 2013, the company’s ticker symbol for trading has been changed from “RIMM” to “BBRY” on NASDAQ. The legal name of the company has not changed, for which the approval of the official change by shareholders will be sought at the company's Annual General Meeting later in 2013. During the time, the company will do business as BlackBerry.

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