Wednesday, August 4, 2010

Rim makes big splash

AdAge covered the Rim new operating system launch yesterday stating that AT&T is backing Rim's Iphone killer. (article below) Meanwhile afterhours catering must be on high in Waterloo with the news that Saudi Arabia is threatening banning Blackberry's in October if they don't reveal how to unencrypt messages so the government can monitor all messaging going on in that country.

AT&T Backs BlackBerry's IPhone Killer

Goes Up Against Verizon's Bet on Android

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NEW YORK ( -- Verizon and AT&T have picked their horses in the next smartphone race. While Verizon has aligned with Android for its high-profile Droid phones, AT&T is backing BlackBerry.

Today, manufacturer Research in Motion launched the BlackBerry Torch exclusively on the AT&T network, and starting Thursday AT&T will launch a major marketing push from Omnicom Group's BBDO that targets BlackBerry's core business user as well as a more mass consumer audience. Consumers can expect "a lot of media weight" behind the launch, said Vance Overbey, executive director-advertising for AT&T Mobility, though he declined to disclose budget specifics.

AT&T claims "more smartphone users choose AT&T than any other carrier" and the Torch will be an important handset for the carrier if it hopes to retain that title -- especially as it may soon lose Apple's iPhone.

BlackBerry is only the latest smartphone platform to get a major marketing push. Verizon late last year in another recent carrier-backed smartphone launch spent heavily on its marketing blitz for Droid -- estimated at $100 million. And in July Verizon also backed the most recent Android handset, Droid X. Apple has dropped high-profile TV spots and outdoor for its recent releases, and Microsoft, the No. 3 smartphone platform in May, according to ComScore estimates, is poised to launch a major push for its new mobile operating system, Mobile Windows 7, this fall.

AT&T was the third biggest U.S. ad spender in 2009 across all its business units, according to Ad Age Data Center. The Dallas-based company spent nearly $2.8 billion vs. No. 2 Verizon's $3 billion last year.

David Christopher, chief marketer for AT&T Wireless, previewed the first spot for Torch at a press event in New York today. Like early spots for iPhone, the first commercial shows off the handset and its interface, but he said to expect storytelling as the campaign, which will include national TV, print, outdoor, digital and social media, continues. "You'll see more product as hero, as well as broader story work for an audience ranging from professionals to consumers," he said. The first spot was heavily AT&T branded, and bore its new tagline, "Rethink Possible," also from longtime agency BBDO.

To stop BlackBerry's slow bleed in U.S. smartphone market share, Torch will have to best Android. To date, BlackBerry's position as the U.S. smartphone market leader is slipping, while Android is gaining fast. From February to May, BlackBerry lost a small fraction of its more than 40% market share, while Google's Android jumped from 4% to 13%. Apple lost one percentage point, from 25.4% to 24.4%.

Verizon's Droid push does seem to have had an impact on Android's explosive growth. Yesterday, market research firm Canalys released a finding that Android worldwide shipments increased eight times during the second quarter. Canalys analyst Chris Jones cited Verizon's Android promotions as a driver. (It's important to note that Android phones are produced by a range of manufacturers, not just one, as is the case for the iPhone or BlackBerry handsets.)

By design, it looks like Blackberry Torch is angling to challenge the iPhone, which much to the dismay of Apple fans has had AT&T as its exclusive carrier since its launch three years ago. Torch has a touch screen and a new operating system, BlackBerry 6, which claims to be much more developer-friendly to spur app development. The phone, however, also features BlackBerry's signature keyboard to grab consumers looking for an iPhone-like experience but hesitant to leave keypad typing.

Though the question remains, why did RIM partner with AT&T for its iPhone competitor, when the carrier has proved to be that smartphone's Achilles heel?

"It may be because Verizon is more focused today on Droid as a differentiator against iPhone," said Charles Golvin, Forrester wireless principal analyst. Also, he finds RIM immune to network complaints. Dropped calls on AT&T has been largely an iPhone problem.

"Those criticisms have been extremely focused on iPhone," he said. "Despite all the negative press directed at AT&T because of iPhone user dissatisfaction, RIM hasn't experienced the same deficiencies nor had the [same] customers' complaints."

AT&T also offers Android handsets, though it has not blown out anyone with a comparable marketing program.

"As exclusivity on iPhone is preparing to lapse, it's increasingly important that AT&T be seen as more than a place for the [iPhone] and nothing else," said Mr. Golvin.

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