BlackBerry Tour, which is available to both Verizon Wireless and Sprint customers, is under scrutiny for trackball issues that have led some Tour owners to return the smartphones.
The question is: how widespread is the problem?
TownHall Investment Research's David Eller said in a research note this week that he has consulted "experts" who have determined Research In Motion is having a "big trackball problem, especially with the Tour," which was launched in July.
BlackBerry Tour
(Credit: CBS Interactive)Eller wrote that BlackBerry Tour owners are being forced "to clean the trackball frequently and preferably with compressed air." When they don't clean the trackball, the issues get worse, leading them to bring the device back to the store for repairs or returns.
It has gotten so bad, Eller contends, that Sprint's "return rates have been climbing toward 50 percent."
A 50 percent return rate on a mobile phone would be huge. But Sprint is telling a much different story.
"We experienced a small percentage of early production Blackberry Tour smartphones with trackball issues," a Sprint representative said in a phone interview Wednesday night. "As soon as the issue was identified, we worked closely with our partners at RIM to resolve the problem quickly. Any customer experiencing issues with the Tour should visit a Sprint service and repair center."
Sprint, which said it had never worked with TownHall Investment Research prior to the research note's release this week, said the number of BlackBerry Tour returns it experienced "weren't even close to 50 percent." The Sprint representative said it was "a very small percentage." He wouldn't release exact figures but did say the percentage was in line with other new devices that experience some hardware problems at launch.
But Eller didn't only mention Sprint. In the same note, he wrote that "Verizon is experiencing serious problems with the Tour." He claimed that "Verizon will soon be getting new smartphones from Motorola and Palm that compete with RIM. Verizon is angry about this recurring trackball problem and is telling its retailers to expect strong support for the new Motorola phone."
However, Verizon spokesman Jim Gerace said in a phone call Thursday that the "BlackBerry Tour has the lowest return rate of any smartphone Verizon Wireless is selling. In fact, its return rate is one of the lowest among all the products our company sells."
That said, Gerace did acknowledge that BlackBerry Tour devices did experience trackball issues when they were first released. He said that his company "caught it pretty early and we didn't sell many with the bad trackball."
Gerace offered a biting response yet when I asked him about the accuracy of Eller's contention that Verizon is angry at RIM and will be strongly supporting a new Motorola device.
"That is blatantly not true," Gerace told me. "Just look around at our advertising. Does it look like we're not pushing the BlackBerry Tour?"
RIM did not immediately respond to requests for comment.
... Read moreDon Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
The summer of the smartphone is heating up as Research In Motion is set to introduce on Sunday its latest BlackBerry device, called the Tour. But will it be enough to keep RIM king of the smartphone market?
BlackBerry Tour
(Credit: CNET )The BlackBerry Tour is hitting store shelves at an important time for RIM, which has been reportedly taking a sales hit as carriers promote exclusive phones, such as the Palm Pre on Sprint Nextel's network and the Apple iPhone 3GS on AT&T's network, according to Michael Walkley of Piper Jaffray.
Walkley said in a research note published this week that BlackBerry sales declined in June at AT&T and Sprint as these carriers focused marketing dollars and sales attention on iPhone and Pre over older BlackBerry handsets. Sales of BlackBerry devices remained solid at T-Mobile USA, but they were slightly down at Verizon Wireless, after the carrier ended its "buy one, get one" promotion, Walkley also reported.
But now it looks like RIM has a new device to excite its base of business users and consumers, especially those looking for a smartphone they can take overseas.
Unlike its smartphone competitors, the BlackBerry Tour is not offered exclusively on a single carrier network. Instead it will be available on two carrier networks: Sprint Nextel and Verizon Wireless. Each carrier is set to launch the device on Sunday. Making its phone available on multiple carrier networks is not unusual for RIM, which sells its products on all four major carrier networks. But typically carriers don't make the devices available on the same day. In some ways, the non-exclusive arrangement could help RIM sell more devices because it greatly increases the potential sales base. But it might also hurt, if carriers focus more marketing attention and budget on promoting their exclusive phones.
It's yet to be seen how popular the new BlackBerry Tour will be. But at this point any new device from BlackBerry is likely better than none.
"Sales of the Tour are key in our opinion, as our checks indicated RIM may need strong July and August sales to meet its guidance," Walkley said in his research note.
The new phone, which sports Bluetooth, GPS, a 3.2-megapixel camera, a full QWERTY keypad, and a high-resolution screen offers everything that BlackBerry lovers have come to expect. And it also comes equipped with a Quad-band radio that allows the phone to be used internationally on both CDMA and GSM networks. The addition of the 800MHz and 1900MHz radio for CDMA is particularly important for users traveling to Latin America and parts of Asia where CDMA is available on these frequencies.
The device is likely to appeal mostly to business customers, particularly those who travel, and existing BlackBerry users. While Sprint Nextel also plans to market the phone to consumers, the carrier plans to target these customers first.
"Clearly there is already a strong base of BlackBerry customers, and many of them are business users," said Tim Donahue, vice president of business marketing for Sprint. "And we want to make sure they have access to the latest and greatest BlackBerry device out there."
Targeting BlackBerry base
Going after the business or enterprise customer is a smart move for Sprint. Business customers account for about half the subscribers on the Sprint network. But Sprint has also been pushing the Palm Pre as a business-friendly device. Donahue explained that there is room for multiple products to address the same market.
"There is no silver bullet when it comes to devices in this industry," he said. "It's more of a cadence and it's about building a portfolio."
For Verizon Wireless, the Tour is its major smartphone launch of the summer. The company hasn't made much noise about the Windows Mobile smartphones it has recently launched. And its last big smarpthone campaign was the exclusive deal for the BlackBerry Storm, RIM's only touch-screen phone.
The BlackBerry Curve and the BlackBerry 8830 World Edition phones have been big sellers for Verizon. But the BlackBerry Bold, which is only available on AT&T's network in the U.S., is considered by many BlackBerry aficionados to be RIM's most desirable BlackBerry. The Bold, which gets its name from its screen, has a high-resolution screen that has been described as eye-popping by CNET reviewer Bonnie Cha.
The BlackBerry Tour's design is a nice combination of the BlackBerry Curve 8900 (pictured here) and the BlackBerry Bold.
(Credit: CNET)The BlackBerry Storm uses similar screen technology. But now with the BlackBerry Tour, Verizon is able to offer a device with a high resolution screen and a QWERTY keypad.
"If you take the keyboard and international reach of the BlackBerry 8830 and the screen quality of the Storm and combine them, you have the Tour," said Dan Mock, director of marketing for Verizon Wireless.
Walkley believes that the pent up demand for a BlackBerry Bold-like experience on Verizon's network will help make this a popular device for existing Verizon customers.
"We expect the Tour will sell very well to Verizon's installed BlackBerry subscriber base, as this is Verizon's first product that is competitive with the Bold at AT&T," he said in his note.
While the device will certainly be an important cornerstone of Verizon's smartphone line up, it's not an exclusive deal. So it's unlikely that the device will attract many new customers to Verizon. But Mock said that doesn't matter.
"It's never been our stance to go out and base our business on one iconic device," he said. "It's always been about the network for us. Still, I'd say we also have a strong portfolio of smartphones and mobile devices on our network."
For RIM the real question is whether the Tour can get enough momentum in the market to boost sales in July and August to reach its sales targets. The launch of so many other hot smartphones at one time presents a challenge for the company as it tries to push the Tour to the forefront of customers' minds.
And the pressure could continue to intensify as T-Mobile USA still launches its next Google Android phone, the MyTouch, in early August. T-Mobile has made the MyTouch its flagship smartphone, and the company is throwing a lot of money and marketing muscle behind the device. And even though carriers, such as AT&T, Sprint Nextel, and T-Mobile all claim that their sales reps are just as happy to sell a BlackBerry as they are any of these exclusive devices, it's hard to argue that these big marketing campaigns do not have an effect on sales of other devices, such as RIM's BlackBerrys.
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