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Research In Motion's stock gyrations reflect investors' key concern: Is the BlackBerry maker's new phone the company's savior or isn't it?
THE SPARK: The company's critical new phone with the BlackBerry 10 operating system debuted Wednesday to mostly positive reviews. But the phone won't come out in the United States, a key market, until March.
Investors worried about RIM's future, had driven its stock to a nine-year low in September. But hopes that the new phone will juice demand for BlackBerrys and revive Research In Motion Ltd.'s fortunes have helped shares more than double since then.
Shares dropped 83 cents, or 6 percent, to $12.95 on the Nasdaq Thursday afternoon.
THE BIG PICTURE: Pioneered in 1999, the BlackBerry was a game-changing breakthrough in personal connectedness. It changed the culture by allowing on-the-go business people to access wireless email. But the iPhone's debut in 2007 showed that phones can do much more than email and phone calls, and exploded RIM's market. The company's shares sank for years as the BlackBerry lost ground to Apple Inc.'s iPhone and phones running Google Inc.'s Android system.
RIM promised a new system to catch up. But it has taken more than two years to unveil the new phones, which are redesigned for the multimedia, Internet browsing and apps experience that cellphone buyers now demand.
The first device in the new crop of revamped BlackBerrys will be the Z10. It will have only a touch-screen keyboard, like the iPhone and most phones running Android, including Samsung Electronic Co.'s popular Galaxy line. Although the Z10 will go on sale Thursday in the U.K. and next Tuesday in Canada, it won't be available in the U.S. until March.
The Q10 will follow at least a month later, in some markets, and will have a physical keyboard, a feature that has kept BlackBerry users loyal over the years because it makes typing easier. RIM couldn't say when U.S. carriers would have it.
THE ANALYSIS: National Bank analyst Kris Thompson said BlackBerry 10 launched with few surprises other than more delays. The expected March launch in the U.S. for the Z10 is "very disappointing," as U.S. business, consumer and government phone buyers are the phone's most important market, Thompson said in a note. The April debut for the Q10 disappointed him as well.
BGC Financial analyst Colin Gillis said he doesn't think the phones will sell. By the time the Z10 goes on sale in March, "you'll have a lot of talk about all the new Android phones," Gillis said in an interview. "It's a decent product. They will have some success. We all like it, but I wouldn't buy one."
Sterne Agee analyst Shaw Wu suspects many investors are convinced the new BlackBerrys aren't different enough to diminish the popularity of the iPhone and Android devices.
Wu, who has a "Neutral" rating on the shares, said he was still concerned with RIM's "fundamentals."