October 8th, 2008
RIM's Storm: Why it matters
Research in Motion launched its Storm touch handheld and it is critical to the company’s long-term plans.
RIM, along with Vodafone and Verizon Wireless, launched the Storm on Wednesday (Techmeme, statement, Crave review, gallery). The phone, a rival to the iPhone 3G, signals a product barrage for the company. On RIM’s last earnings call, co-CEO Jim Balsillie talked about how the company would launch a barrage of products aimed at grabbing market share. The message that rattled Wall Street: RIM’s time is now and worrying about margins is silly given the opportunity.
With the launch of the Storm, which really signals the beginning of RIM’s next product cycle, we’ll find out if Balsillie’s bet will pay off.
Also see: RIM announces BlackBerry Storm with responsive touch screen display
Why is the Storm important?
- RIM can use the Storm to rally telecom carrier support–especially among those left out of the iPhone launch.
- The Storm will define how RIM is viewed among consumers.
- The Storm may be able to thwart any enterprise momentum gained by Apple’s iPhone.
The importance of the Storm isn’t lost on Wall Street analysts, who were commenting about the device as if they were a bunch of gadget bloggers.
Oppenheimer analyst Ittai Kidron writes in a research note:
We wouldn’t call the Storm perfect, but it clearly enhances RIM’s position with improved features, functionality and user experience. With strong carrier support this holiday season, we believe the Storm fundamentally changes the game for RIM. After being penalized for delays and margin issues related to its new products, RIM must deliver with the Storm.
No pressure there eh?
Kidron noted that the Storm won’t cannibalize RIM’s Bold since the latter targets the enterprise.
JMP Securities analyst Samuel Wilson also makes an interesting enterprise point:
A full-featured 3G smartphone with productivity and entertainment applications, the Storm is RIM’s first offering in the currently hot touchscreen segment. It features innovative haptic feedback for typing on the touchscreen keyboard. This device could be the answer to the pressure many CIOs are feeling from executives asking for iPhone support on the corporate network.
In any case, RIM has a lot riding on the Storm launch. If the Storm flops, chances are good RIM will too.
Larry Dignan is Editor in Chief of ZDNet and Smart Planet as well as Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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