BlackBerry Storm Is Off To Bit of a Bumpy Start
By AMOL SHARMA and SARA SILVER
Verizon Wireless and Research In Motion Ltd. have high hopes for the BlackBerry Storm, which they spent nearly two years developing as their big response to Apple Inc.'s iPhone.
But despite a marketing campaign that cost more than $100 million, the smart phone has gotten off to a bumpy start. Some early buyers have complained about technical bugs with RIM's first touch screen BlackBerry, although others say most new gadgets have problems that need to be ironed out.
When Verizon Communications Inc. reports its fourth-quarter results Tuesday, investors will be looking for clues on how the Storm has fared. Verizon Wireless is the exclusive U.S. carrier for the device.
People familiar with the matter say the company sold roughly 500,000 units in the first month after the Storm's Nov. 21 launch. That is a promising start, though well off the pace of AT&T Inc.'s sale of 2.4 million iPhone 3G devices in that device's first full quarter on the market.
Some Storm owners have complained about everything from clunky software for typing on the touch screen to the device's sluggish performance with basic tasks like dialing-by-voice or taking photographs.
"I found myself wanting to throw it in the ocean due to my frustration with its overall usability," said Steven Golub, a longtime Verizon customer from Morristown, N.J., who bought the Storm the day it was released, but returned it a few weeks later.
Verizon and RIM, determined to release the Storm in time for the holidays, rushed the device to market despite glitches in the stability of the phone's operating system, according to people close to the launch.
RIM co-Chief Executive Jim Balsillie said the companies made the crucial Black Friday deadline "by the skin of their teeth," after missing a planned October debut. Mr. Balsillie said such scrambles -- and the subsequent software glitches that need to be fixed -- are part of the "new reality" of making complex cellphones in large volumes.
Verizon and RIM provided a software update for the Storm in December that resolved some user concerns.
Mike Lanman, chief marketing officer of Verizon Wireless, said the company is addressing other user complaints in future releases, such as allowing users to type on a full keypad in portrait mode, rather than a keypad with multiple letters per key.
Handset-makers and carriers have been pulling out all the stops to match or one-up the iPhone, which has quickly grabbed a 25% share of the North American smart-phone market. The iPhone 3G 8-gigabyte model is $199 with a two-year AT&T contract. The Storm is the same price after a $50 mail-in rebate.
The Storm posed a special challenge for RIM because the company's operating system had always been tailored to a keyboard and click-wheel or track-ball for navigation, rather than a touch screen.
The Waterloo, Ontario, company also had to incorporate new hardware, including an "accelerometer" that rotates the screen when the phone is turned on its side.
A Verizon Wireless spokesman declined to comment on specific sales figures for the Storm, but said the percentage of units returned is in the single digits, standard for a smart phone. "The sales and performance of the device have lived up to our expectations," he said.
Mr. Balsillie said RIM considers the Storm "an overwhelming success" and is making 250,000 devices a week to meet demand.
Even before the first iPhone was released in mid-2007, Verizon Wireless, a venture of Verizon Communications and Vodafone Group PLC, went looking for partners to help it respond to Apple's entry into the phone market.
RIM, which was expanding its BlackBerry devices into the consumer market, was considered the best-suited partner. But RIM's fast growth -- its share of the global smart-phone market has jumped to 15.9% from 6.9% since 2006, according to research firm Gartner -- left it short-handed and straining to meet the demands of various carrier partners.
"The execution here left a few things lacking," said Anton Wahlman, a consultant who advises makers of hardware and software for mobile devices.
Daniel Mahoney, a financial and management consultant in Philadelphia, said he's happy with his purchase of the Storm, and added other early buyers are being too critical. "No single device is going to be the end-all be-all for everyone," he said.
