RIM to give BlackBerry a voice

RIM: BlackBerry is no fad Dennis Kavelman, CFO, Research In Motion

When the BlackBerry e-mail pager makes its European debut later this year, it will be something to talk about. Soon afterward, it will be something to talk on.

In Europe, the BlackBerry will run on the voice network known as GSM (Global System for Mobile Communications). As a result, adding the ability to make cell phone calls will be as simple as offering a software download and plugging in an earphone similar to the hands-free attachments for cell phones.

"It's just another icon on the screen," said Dennis Kavelman, chief financial officer of Research In Motion, the maker of the BlackBerry.

RIM is working with BT Cellnet, a wireless offshoot of British Telecom, to offer the BlackBerry in Europe. The unit will use the emerging General Packet Radio Service (GPRS) standard, which moves data at high speeds over the GSM phone network. When it first launches, the BlackBerry will offer only data, but adding voice should be a snap, Kavelman said.

Kavelman added that RIM is counting on its European effort--as well as a separate effort to make all BlackBerry pagers compatible with Lotus Notes--to help the company keep growing despite a diminished appetite for technology spending at large companies. RIM and BT employees are doing early testing of the BlackBerry in Europe.

While technologically simple, the move to add voice to the e-mail device is challenging financially. RIM deserves to benefit from the voice calls made over a BlackBerry, Kavelman said, but has yet to work out the financial details with BT.

"We don't know what the voice model is," he said, speaking to investors Wednesday at a J.P. Morgan H&Q conference in San Francisco.

Gartner analysts Peter Richardson, Nigel Deighton and Robert Egan say that despite Research In Motion's plan to bring voice capability to its BlackBerry e-mail pager, the reality of a successful data-voice hybrid device will be elusive. see commentary

RIM is not the only handheld maker with its eye on Europe and the GSM market. Also speaking at the J.P. Morgan event, Palm CFO Judy Bruner said that her company is working on a handheld with built-in, GSM-based wireless functions, although she did not give specifics. French phone maker Sagem has also announced a combination cell phone/handheld computer using Microsoft's Pocket PC operating system.

Handspring's VisorPhone add-on for handhelds also runs on the GSM network. The company plans to begin selling it in Europe in the next couple of months.

Kavelman said RIM will have an easier time forming partnerships with other leading tech companies than Palm will because RIM is not looking to compete with them.

"We don't have a RIM.Net portal," Kavelman said, alluding to Palm.Net. "We don't have a RIM OS that is trying to compete with Microsoft."

IDC analyst Alex Slawsby said that a voice-capable BlackBerry is one of several products that could make so-called convergence devices more attractive. Slawsby also pointed to Motorola's Accompli 009, provided that the unit comes down in price.

Scott Miller, an analyst at C.E. Unterberg Towbin, said he expects the data-only BlackBerry for Europe to start shipping in late fall but added that it will take some time for the BlackBerry to catch on there. He said the initial marketing will focus on U.S. companies that have European operations and others that have experience with the BlackBerry.

"There is some question as to really how rapid the adoption will be," Miller said. "Europe is much more phone-centric."

Still, Miller noted that sending text messages has become quite popular in Europe and said the BlackBerry is much more attractive for entering text than cell phones are.

"When they use the BlackBerry for the first time, they are going to be amazed by just how useful that keyboard is," Miller said.

Another wild card is how fast the GPRS network gets up and running. But assuming all goes well, the combination of voice and the BlackBerry could be quite a topic of conversation overseas.

"By the middle of 2002, BlackBerry may be all the rage in London," Miller said.