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http://www.financialpost.com/news-se...tml?id=1673217
Clouds are gathering over Research In Motion Ltd.'s BlackBerry Storm and its other consumer-oriented handsets as the battle over next-generation smartphones heats up this summer.
On Monday, Apple Inc. is widely expected to introduce the next iPhone at its Worldwide Developers Conference in California, while Palm Inc.'s long-awaited Pre, pictured, went on sale in the United States on the weekend. Both the iPhone "Pro" as some have dubbed it, and the Pre are the latest in a new era of handheld do-it-all wireless devices with sleek designs and even sleeker software that interacts effortlessly with the Web. Alongside a slew of smartphones that carry Google Inc.'s touted Android operating system, they're expected to put pressure on sales for RIM's Storm and Curve, the Waterloo, Ont.-based company's top-selling handsets.
Equity analysts and media have been speculating for weeks that Apple will unveil its third version of the wildly successful iPhone at its annual gathering with developers in San Francisco. The Cupertino, Calif.-based company isn't likely to gamble with a winning formula in the iPhone 3G, analysts say. The touchscreen design will remain unchanged, but what's inside will be better, faster and stronger than what predecessors offered.
The new device will boast a beefed-up 3.0 operating system with more memory and a quicker processor making for better responsiveness, said Mike Abramsky, equity analyst at RBC Capital Markets.
Combined with new features like push notification, RBC expects the iPhone to continue to be the top choice for consumers in the United States.
"We see iPhone's superior user experience, further innovations [and] breadth of applications sustaining its leadership position against the pending launches from Android, BlackBerry and Palm," Mr. Abramsky wrote in a note to clients last week.
Apple doubled its share of the global smartphone market to 10% last quarter, while RIM increased its hold to about 20%. The BlackBerry maker, which has become the top-performing smartphone maker in the world as incumbents like Nokia and Motorola continue to lose momentum, will also have to contend with the Pre, which went on sale in the United States on Saturday and is slated for a Canadian launch later this year.
The new device from Palm combines the best from the iPhone and BlackBerry's designs, offering both a touchscreen and slide-out keyboard. The device also boasts WebOS, Palm's new operating system that analysts say is a powerful salvo in the Sunnyvale, Calif.-based company's attempt to outpace Apple and RIM, and now Google. The latter's Android will also put pressure on RIM, analysts say.
Citi Investment Research analyst Jim Suva said the flurry of releases are akin to "shooting the rapids for RIM shareholders." "We expect RIM shares to face trickier waters over the next few weeks."
RIM's response to the growing cavalcade of competition will be a raft of new and improved products of its own. "RIM is expected to launch a broad range of handsets [in the coming year]," Mr. Abramsky said. First will be an updated Curve, which will go on sale in the United States as early as next month, the analyst said. There's also developing hype around a model named "Niagara" by some, or "Tour" to others, which is touted to be an executive-level or enterprise-focused product like the Bold, which will help maintain RIM's grip on corporate users.
Analysts expect the new offerings to keep RIM, which reports financial results June 18, from losing ground in the medium term. "We expect a Tour announcement in the coming months and would use any [share price] weakness around Palm's Pre ramp at Sprint or Apple's development conference to add long positions," wrote Broadpoint AmTech analyst Mark McKechnie in a May 27 note.