RIMM to Launch Low-end Smartphone

BlackBerry-maker Research In Motion Ltd., (RIMM) is set to launch cheaper smartphone called BlackBerry Curve 9310 at Verizon Wireless, which is a part of Verizon Communication Inc. (VZ - Analyst Report).

The new BlackBerry 7- based smartphone is a slim user-friendly handset featuring all social network applications and the popular BBM messenger. It also features a 3.2 MP camera and the popular BlackBerry keypad. Moreover, the VZ Navigator, which is installed in the handset, will enable users to locate directions.

The new smartphone is priced at $49.99 and will be available from July 12 at Verizon Wireless stores along with a two-year wireless service contract. The service plan starts from $80 and includes unlimited talk and text messaging and 300 MB of data.

Research In Motion, once a dominant player in the wireless e-mail sector, is currently facing significant market share loss in the high-end smartphone market to Google Inc’.s (GOOG - Analyst Report) Android-based devices and Apple Inc’.s (AAPL - Analyst Report) smartphones. As a result, the company is currently focusing on the low-end smartphone market just like Nokia Corporation (NOK - Analyst Report), which has also taken a beating due to the prominence of Apple’s iPhones and Google’s Android-based smartphones. Moreover, the delayed launch of BlackBerry 10- based smartphones has also forced Research In Motion to change its strategy and concentrate on the low-end smartphone market, thereby keeping the handset manufacturer afloat till the launch of powerful BB10 powered handsets.

We are maintaining our long-term Neutral recommendation on Research In Motion. Currently, it has a Zacks #4 Rank, implying a short-term Sell rating on the stock.