Nov 21, 2008 2:18 PM,

Will BlackBerry’s touch-screen gamble pay off?

By Sarah Reedy

RIM strayed from its core expertise with its first touch-screen handset; the consumer market could decide if its bet paid off.

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“Typing on the Storm is less than ideal; the SurePress system slows typing down a bit just by virtue of the extra physical effort required to press the screen, and RIM’s software slows things down further because you need to hover your finger over the letter before pressing or you’ll get the wrong letter,” he said in a research report today. “Further refinement is clearly needed, but if RIM had invested any more time refining the system it would have missed the 2008 holiday sales season.”

RIM had to move quickly to keep up with a growing list of other touch-screen devices, including the G1, Instinct, HTC Fuze and TouchPro and LG’s first US smartphone, the LG Incite. RIM is banking on its following of BlackBerry user and new interested consumers to make the Storm the first device to truly give Apple a run for its money. The two have been head-to-head all year as RIM captured a 10.2% market share compared to Apple’s 5.7% in the third quarter, but Apple passed up RIM in the smartphone standings, shipping 6.9 million iPhones in the third quarter compared to RIM’s 6.3 million BlackBerrys.

This year has also seen a slew of other new devices from RIM, including its first flip phone, the BlackBerry Pearl Flip, the popular BlackBerry Bold and a new BlackBerry Curve planned before the year’s end. RIM’s momentum could cause its own devices to compete, but its target is clearly the iPhone. Even if it does inadvertently cannibalize sales of other devices in the RIM family, the Storm is a very important move for RIM as it continues its consumer push. More than half of its customers come from the consumer space, not solely the enterprise where its long-standing history has been. With touch screens becoming table stakes, RIM had little choice but to respond with its own version.

“The Storm fills the pent-up demand at Verizon Wireless for a flagship touch-screen smartphone and should be attractive to BlackBerry users at any carrier who want a touch-screen option,” Greengart said. “At $199, Verizon Wireless is pricing the Storm to move, and it will.”