New BlackBerry Storm challenges the iPhone

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This is a nice touch

Its biggest innovation is a clever feature RIM hopes will give the Storm an advantage over the iPhone. When you strike a key or icon on the Storm's screen, you feel a physical sensation, as if you were pressing a real key or button. That's because you are pressing a real button. The entire glass display is one large button, mounted on a mechanical substructure that allows it to move upon pressure.

The idea behind this feature is to make typing on glass feel much more like typing on a real keyboard, and thus to make the virtual keyboard, and the touch interface, more acceptable to people used to physical keyboards and buttons. This push-down screen also replaces the side-mounted scroll wheel or track ball on other BlackBerrys for activating menu choices and icons.

For years, Waterloo, Ontario-based RIM has been the de facto provider of e-mail devices for corporations. But the company has its sights on the consumer market.

It launched its first mainstream TV advertising campaign this year and is partnering with Verizon to expand a marketing blitz that has touted the Storm on TV and in newspapers.

"It's only in the last year that they've made a real concerted effort to branch into consumers," said Barry Richards, a senior analyst at Paradigm Capital who owns shares in RIM.

RIM is trying to gain market share as tech-savvy consumers embrace smartphones, which account for 12.6 percent of U.S. handsets but 19 percent of recently acquired phones, according to Nielsen Mobile.

"The smartphone market has plenty of room to grow, and we are well-positioned to benefit from our continued focus on innovation, customer value and partnerships," said Mark Guibert, RIM's vice president of corporate marketing.

Like other handset makers, RIM faces competition from Apple's iPhone, whose sales have surprised analysts since its launch in June 2007. According to the NPD Group, the Apple gadget was the top-selling phone in the third quarter, followed by Motorola's Razr and the Blackberry Curve.

That's not good news for carriers such as Verizon Wireless and Sprint Nextel, which collectively lost 2 million subscribers in one quarter to AT&T, the exclusive provider of the iPhone, Paradigm's Richards said.

Carriers are especially interested in signing up smartphone customers because they need data plans, which are more lucrative for carriers, said Jim Ricotta, chief executive of Azuki Systems, a mobile media services company.

The Storm isn't the iPhone's first competitor. T-Mobile's G1, Samsung's Instinct and LG's Dare all have touch-screen capabilities.

But RIM said it goes a step further, with what it is calling the "world's first 'clickable' touch screen." And it captures video, which the iPhone doesn't. It does include one popular iPhone feature: an accelerometer, which means the screen shifts depending on which way you hold it.

The Storm is "not an iPhone killer, but it is intended as a retention tool to keep people that have a BlackBerry but might be eyeing the iPhone," said Charles Golvin, analyst at Forrester Research.Continued...