BlackBerry or Apple?

Research In Motion Ltd co-Chief Executive Officer James Balsillie, an ice-hockey fanatic, quit playing with employees after he noticed they weren't hitting him as hard as others.

"Who enjoys that?" asks Balsillie, 47, who has run the maker of the BlackBerry handheld e-mail device since 1992. "The guys I play with are brutal."

Apple CEO Steve Jobs dealt Research In Motion a powerful blow earlier this month with the introduction of the new iPhone.

Apple sold one million iPhone 3Gs in the three days after they went on sale July 11, stealing potential BlackBerry customers and contributing to a 31 per cent drop in their stock from a record $148.13 in June.

Balsillie says his strategy isn't swayed. The plans include boosting advertising spending, hiring more engineers and accelerating product introductions, starting with the BlackBerry Bold, which is coming in the next few months.

Balsillie says companies will continue to pick the BlackBerry because the e-mail service is more reliable and the keyboard is better for business users.

"We know where we're headed," Balsillie said in an hour- long interview at the company's headquarters in Waterloo, Ontario. "We've got all the growth we can handle."

The stock will rise to more than $170 within a year, according to the average of 20 analysts' estimates, from last week's low of $101.86.

The stock dropped after a profit forecast in June missed analysts' estimates because of higher spending to combat Cupertino, California-based Apple's iPhone 3G, which runs on faster wireless networks than most BlackBerrys. The decline wiped out about $26.1 billion of market value.

Enthusiasm

Research In Motion rose $2.07 to $112.85 July 18 in Nasdaq Stock Market trading, or 30 times this year's estimated earnings.

"My enthusiasm for this stock has not diminished," said Tony Carbone, an analyst at RCM Capital Management in San Francisco, which manages $125 billion including Research In Motion shares. "They can gain significant share."

More than two-thirds of analysts recommend buying Research In Motion, according to data compiled by Bloomberg.

The BlackBerry Bold, which works on faster networks, will bring in 15 per cent of revenue and earnings in the six months ending in February, or $1.12 billion and 46 cents a share, said Peter Misek, an analyst at Canaccord Adams Inc in Toronto.

The US market for e-mail phones is growing 85 per cent a year, according to research firm IDC in Framingham, Massachusetts.

Opportunity

"Our job is to fully capitalise on the opportunity before us," says Balsillie, leaning back in his chair. There's a stuffed beaver on his desk, and two electric guitars hang on the walls.

One is signed by Eddie Van Halen, who played at a company party last year. Neighbouring meeting rooms are named after hockey greats including Wayne Gretzky and Bobby Orr.

Outside, more parking spaces are being laid out to accommodate a workforce that surged to 9,000 this year from about 100 a decade ago.

BMWs, Lexuses and an Aston Martin sit in the afternoon sun alongside the four-story buildings. The BlackBerry's success has lifted the company's stock roughly 50- fold in the past six years.

The additional spending will boost sales of the Bold, says Joseph Parnes, president of Baltimore-based Technomart Investment Advisors. He predicted the subprime mortgage rout, betting against lenders including American Home Mortgage Investment Corp early in 2007.

"That's how stocks of this nature will make new highs," said Parnes. "This is an opportunity to keep buying."

Not everyone sees the BlackBerry continuing to gain. The iPhone will attract business users wanting a device that combines corporate e-mail with video, music and internet functions, said Roger Entner, an analyst at Nielsen IAG in New York.

He estimates 15 per cent of the iPhone's roughly seven million users are business customers. More than half of the 16 million BlackBerry users are corporate customers.

"BlackBerry still has the lead when it comes to the very narrowly defined segment of business e-mail," said Entner. "With everything else, the iPhone has a huge lead."

Balsillie says the Bold and other devices will lure more consumers with improved video and internet functions.

The company is also adding a service that lets customers answer their office lines using the BlackBerry, and make calls on the move that appear as if they're being made from the office.

"We're trying to get people to say, "What is that?' and "I want one of those,"' says founder and co-CEO Mike Lazaridis, 47, as he plays a clip of the film "Speed Racer" on his Bold.

New inspiration

Lazaridis said he hired designers that will take inspiration from fine watches and jewellery to extend the BlackBerry's appeal beyond people who simply want reliable e- mail. As he speaks, dozens of engineers in white coats are building prototypes at a nearby plant.

Even though analysts expect an iPhone-like touch-screen version to be among those, Balsillie says there's no need to copy competitors. Just like in ice hockey, Balsillie prefers to take the lead, not follow.

"I play offense," says Balsillie. "There's no glory in defence."

Old and new rivals

SONY ERICSSON:
Sony Ericsson makes the Walkman range of phones. Sony's upcoming W960 sports a touch screen and will let users shuffle through their music collection by shaking the phone, but no US release date has been set.

LG ELECTRONICS:
LG's Chocolate, a music phone, has dedicated music player controls on its front and a slot for extra storage space.
Muziq from LG will be sold by Sprint Nextel this month. It has a music player and a button on the side that lets users listen to music while they send text messages.
LG's Prada has a touch-sensitive screen, like the iPhone.

SAMSUNG ELECTRONICS:
Samsung's Upstage has music controls on one side and a typical phone keypad on the other. It has a slim case with a built-in add-on battery.

NOKIA OYJ:
Nokia's most powerful media phone, the N95, is doing well in Europe but has yet to hit it big in the United States. It has a five megapixel camera, built-in location-based global positioning system, a music and video player, and extra storage space.
5300 XpressMusic from Nokia is a popular music phone, with dedicated music player buttons, a 1.3 megapixel camera and extra storage.

HELIO:
Ocean, designed and sold by upstart Helio, has a mini QWERTY keyboard and a standard numeric keypad hidden under a screen that shows integrated instant messaging and text messaging. It supports high-speed networks, GPS, can play music and has a two megapixel camera.