Will China's Huge Mobile Market Want Research In Motion?

Research In Motion plans to start selling its BlackBerry e-mail phone in China this year, tapping the world's largest handset market as it expands beyond North America. The shares rose 9.8%.

The BlackBerry 8700 model will begin shipping to business customers in China through France's Alcatel-Lucent, Research In Motion said. Beijing-based China Mobile, the nation's biggest wireless carrier, is providing local BlackBerry service in the country.

China has more than 500 million mobile-phone users, according to government data, and its growth is surpassing that of North America. Alcatel-Lucent, a "pioneer'' in Chinese phone sales, will help the BlackBerry reach subscribers in the country, Oppenheimer analyst Lawrence Harris said.

"The long-term growth potential here is significant,'' New York-based Harris said, "The market is still growing rapidly. The timing could be just right.'' He rates Research In Motion shares "neutral.''

Research In Motion, based in Waterloo, Ontario, rose $11.15 to $124.53 on NASDAQ Stock Market trading, the most in more than two weeks. The stock has almost tripled this year.

Co-Chief Executive Officer James Balsillie has enlisted more than 300 phone-service providers around the world to expand beyond North America, which accounts for most of Research In Motion's revenue. Paris-based Alcatel-Lucent, the world's largest maker of telecommunications equipment, already has the right to sell BlackBerrys in Africa and the Middle East.

China's economy grew 11.9% on an annual basis at the end of the second quarter, about six times the U.S. rate.

The BlackBerry will face competition from Nokia Oyj, the market leader in China, as well as lower-cost local handsets such as the RedBerry, which China Unicom, the nation's second- biggest mobile-phone operator, started selling last year.

China Mobile, which controls about 67% of the country's wireless market, said that it added 48.4 million subscribers in the first nine months of 2007, bringing its total to 349.7 million. The number of wireless customers using data services such as text messaging and e-mail jumped 34% to 336.5 million.

The global number of BlackBerry users was about 10.5 million as of Sept. 1, after Research In Motion added 1.45 million in its latest quarter.

Will BlackBerry be successful in dominating mobile phone market in China?