RIM: Stock Down on News of Two-Month Delay in 3G BlackBerry

Research In Motion Ltd.’s (RIMM) 9000 series BlackBerry may be delayed by two months due to battery life, voice quality and other issues, RBC Capital Markets said on Friday. Shares of the Waterloo, Ontario-based company dipped as much as 5% on the news.

The rumored third-generation [3G] handset was expected to be announced in May with a June launch for AT&T (T) in the U.S. and Vodafone in Europe, but sources are confirming that these dates may be pushed back to July and August, analyst Mike Abramsky told clients. Others have also predicted a delay.

RIM released the BlackBerry Curve 8330 for Verizon Wireless (VZ) and Sprint (S), along with the BlackBerry Pearl 8120 at the CTIA Wireless tradeshow held earlier this month in Las Vegas, but much of the attention was on the 9000 “Meteor” – something RIM has still said nothing about. It may have planned to do so at its May 13 conference in Orlando, but this looks more doubtful now. However, a spokesperson did indicate that the leaked devices are only prototypes that typically have power management software disabled.

Several Web sites posted “spy shots,” video and insider information about the product during CTIA suggesting it will have an improved imterface based on the new BlackBerry 4.5 operating system, a 624MHz processor, 480x320 screen, GPS, Wi-Fi and HSDPA, a 3G mobile communications protocol that is reportedly the source of the battery problems. The new BlackBerry may also have rounded edges, giving it a sleeker and sexier look that fasion-conscious e-mail junkies may be looking for. Reports suggest that it will not have a touch screen like Apple Inc.’s (APPL) iPhone and other competitors have released. RIM also faces the threat of a 3G iPhone from Apple due out in June.

Despite the potential problems with the 9000, Mr. Abramsky is confident that RIM will address the issues and said early glitches are typical of new network launches, particularly since 3G phones require much more power than their predecessors. However, he said the delay may cause an overhang for the stock. RIM shares fell as much as C$6.66 to C$119.11 in Toronto trading.

The analyst does not think it will impact the company’s first quarter results for fiscal 2009 due out at the end of May since guidance was not based on new hardware launches. It is expected to impact Vodafone’s 3G BlackBerry launch in Europe, but unless it gets pushed back further, Mr. Abramsky said it should have little impact on second quarter sales.