Research In Motion Ltd. has joined a growing list of cellphone makers that are striking out on their own by selling handsets independently of big service providers.
The company, based in Waterloo, Ont., this week quietly opened its first BlackBerry-branded store in the Detroit suburb of Farmington Hills, Mich., in conjunction with U.S. cellphone retailer Wireless Giant. The store sells BlackBerry devices, accessories and software, and service plans from all the major U.S. providers, including AT&T, Verizon Wireless, Sprint Nextel and T-Mobile.
Research In Motion is making a foray into retail sales with a store devoted to selling its popular BlackBerry devices.
(Canadian Press)
RIM has not yet announced plans for additional stores, but analysts said the move is likely to antagonize wireless carriers, who sell BlackBerry devices in their own retail outlets.
"If you're Verizon and you're carrying the BlackBerry today, when you see one of these exclusive stores, obviously you're not going to be too thrilled about that," retail consultant David Ian Gray told the National Post.
RIM has not shied away from antagonizing North American cellphone providers in recent months, with company executives on several occasions complaining about the high data rates customers are being charged. Earlier this year, chief operating officer Don Morrison said North American carriers could sell eight or nine times more BlackBerry devices a week if they introduced cheaper data rates, like those in Europe.
RIM joins a growing list of phone makers that are attempting to change the way cellphones are sold in North America. In Canada and the United States, it is common for cellphone companies to provide customers with heavily discounted or even free handsets in exchange for the customer signing a two- or three-year service contract.
In Europe and most of the rest of the world, common practice is that consumers pay the full cost of their phone up front, which means they don't have to sign long-term contracts and can consequently switch providers more easily. Service providers are thus forced to be more competitive with their rates.
Finland's Nokia Corp., the largest cellphone maker in the world, has been trying to export the European model to North America for some time. The company opened stores in Chicago and New York in 2006 as part of that effort.
Apple Inc. also began selling phones in June, when it launched the iPhone. Apple sells the iPhone in its own stores, as well as in AT&T outlets, at its full price but customers are still required to sign a long-term contract with AT&T as a result of an exclusive deal the two companies signed.
RIM and Apple also differ from other cellphone makers, such as Nokia and Motorola Inc., because they receive a slice of monthly revenue for each customer from service providers. Analysts have estimated Apple is getting up to $15 per month from AT&T per iPhone customer, while RIM is said to be earning around $10 per BlackBerry customer from Canadian cellphone providers.
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