Data: They're Jammin' Across Europe
By Brad Smith
Blackberry jam may be readily available in European stores now, but Research In Motion Ltd. and Nortel expect you'll soon
be able to jam with their BlackBerrys as well.
The two Canadian companies last week solidified a partnership, including a $25 million Nortel investment in RIM, aimed at
expanding the market for RIM's Inter@ctive pagers and BlackBerry service to Europe. The deal opens the European market
for RIM, which has no current presence outside North America, while giving Nortel a marketing tool for its infrastructure
business. Nortel especially is eyeing RIM devices for use with its high-speed general packet radio service equipment for GSM
networks.
BlackBerry is a RIM service that forwards corporate e-mail to its Inter@ctive pagers.
Rob Stone, an analyst with SG Cowen Securities Corp. in Boston, says the partnership enhances RIM's European strategy
now that its North American carrier agreements are well-established. RIM's Inter@ctive pagers have been sold using the
BellSouth Wireless Data Mobitex network for more than a year and American Mobile Satellite Corp. began selling them last
fall on its DataTAC network.
"We believe that what this is all about is deploying GPRS in Europe and other markets," Stone says.
Neither RIM nor Nortel would detail their plans, except that they are a joint market and product development arrangement.
Nortel indicated it would have an announcement in about a month clarifying the partnership's strategy, although RIM Chairman
and Co-CEO Jim Balsillie says a European strategy would be "good conjecture."
Balsillie says the partnership brings together RIM's focus on wireless Internet appliances with Nortel's expertise in Internet
protocol infrastructure. The deal ensures RIM's future products will work with Nortel's Internet machinery.
Although Europe is slower than the United States in its adoption of the Internet, it is ahead on mobility and wireless
communications, Balsillie says, so as carriers there launch GPRS networks starting this year it makes sense for Nortel to be
able to give RIM an entry to the market.
Nortel has contracts for GPRS networks with European carriers in Austria and France, and most carriers who have not already
done so expect to sign GPRS contracts soon. With GPRS networks launching this year, RIM hopes to start selling its devices
in Europe next year.
RIM also announced an agreement to sell 2,000 BlackBerry handhelds to employees of Intel Corp., which also has become a
RIM investor as well as supplying the 386 processors that go into the company's pagers. RIM also signed partnerships with
several e-commerce security providers, including VeriSign Inc. and Entrust Inc., to help turn its pagers into what Balsillie calls a
"wireless wallet" that can be used for secure identification and all kinds of purchases-even blackberry jam.
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