Thursday, January 31, 2013

(BN) BlackBerry’s Slow Arrival Underscores Testing Differences

(Bloomberg ) U.S. BlackBerry (RIMM) users' long wait for the latest model to reach stores has underscored the extensive testing that the nation's carriers use to add phones to their networks, putting them weeks behind counterparts overseas.

Verizon Wireless and AT&T Inc. (T), the two largest U.S. wireless-service providers, have multistep tests that can take months to complete. The devices are checked for signal strength, battery life, call quality, heat tolerance and data performance, according to the carriers.

That means the new BlackBerry Z10, unveiled at a New York event yesterday, will go on sale in the U.S. in March -- more than a month after its debut in the U.K. today. The lag has frustrated efforts to roll out the phone globally, contributing to a 17 percent decline in BlackBerry's shares. It also means the company is getting less value from its first-ever Super Bowl ad this weekend, when no one in the U.S. can buy the phone.

"It's really hard to have a global, simultaneous launch of anything," Tavis McCourt, an analyst with Raymond James & Associates in Nashville, Tennessee. "And you only get one chance a year for a Super Bowl ad."

When BlackBerry unveiled the new smartphone yesterday, it gave a range of release dates for the product's initial markets. British carriers such as Vodafone Group Plc began offering the Z10 today, while Canadians will get the phone on Feb. 5. It arrives in the United Arab Emirates on Feb. 10.

Carriers' Fault

BlackBerry didn't offer a firm release date for the U.S., the Waterloo, Ontario-based company's single biggest market, saying it would be sometime in March. After the slow rollout irked investors, Chief Executive Officer Thorsten Heins pointed the finger at U.S. carriers.

All the carriers got the final software for the phones, known as the "gold code," at the same time, Heins said in an interview yesterday. U.S. service providers received the phones themselves at the same time as other carriers around the world, BlackBerry confirmed today.

"Verizon, AT&T, Sprint, T-Mobile -- they have to comply with certain rules they are subject to," Heins said. "They're trying to speed it up."

The situation reflects a balance of power in the U.S. where carriers rather than phone manufacturers dictate the terms, said Michael Cote, a wireless strategist at the Cote Collaborative in Chicago.

"It's different for phone makers here," said Cote, a former sales executive at T-Mobile USA, the fourth-largest U.S. carrier. "U.S. carriers are accustomed to running roughshod over phone manufacturers."

Apple's Clout

An exception to that rule may be Apple Inc. (AAPL), which demanded a revenue-sharing agreement from AT&T when the companies first introduced the iPhone in 2007. When Sprint Nextel Corp. (S), the No. 3 carrier, got the rights to the iPhone in 2011, Apple required it to buy at least $15.5 billion worth of the phones -- a requirement that weighed on Sprint's shares.

BlackBerry, formerly known as Research In Motion (RIM), is counting on the new lineup to reverse six quarters of sales declines and win back market share from Apple and Google Inc.'s Android. Despite positive reviews for the Z10, BlackBerry shares tumbled for a second day amid concerns that U.S. sales will suffer from the delay.

The BlackBerry Q10, a second model equipped with a keyboard, is set to go on sale in April. No specific date was given for any carrier debut of that device.

Mark Siegel, a spokesman for Dallas-based AT&T, declined to comment on the BlackBerry delay.

Torod Neptune, a spokesman for Basking Ridge, New Jersey- based Verizon Wireless, said the testing process can be more lengthy for devices running on new operating systems, as is the case with the Z10 and Q10.

"There's really no typical length of time for a phone to go through testing," he said. "We have a rigorous and extensive testing protocol, and how long that process takes depends on the device and the issues we may encounter."

No comments: