Verizon Rides Out the BlackBerry Storm

It may not have been the first, but it may be the most effective iPhone killer yet. The BlackBerry Storm offered by Research In Motion (Nasdaq: RIMM  ) and Verizon (NYSE: VZ  ) is now officially in the hands -- or make that thumbs -- of the public, giving Verizon Wireless customers another touchscreen phone option bent on keeping subscribers from ditching the carrier and siding with enemies AT&T (NYSE: T  ) or Sprint Nextel (NYSE: S  ) .

As with Apple's (Nasdaq: AAPL  ) latest iPhone, the Storm has already received plenty of accolades and grumps from the early users. While the brilliant screen resolution and tactile typing features have generally received a big thumbs-up, some have complained about the lack of Wi-Fi and the smartphone's sluggish response. But even with the drawbacks, I believe the Storm will do a fine job at stemming the flow of many Verizon customers to the iPhone, particularly those that favor the BlackBerry platform.

Verizon's late holiday season entry into the smartphone space may end up pushing the T-Mobile USA G1 back into the also-ran category, even though Google's (Nasdaq: GOOG  ) foray into the mobile space has garnered a good deal of attention. But the company still holding the most medal envy in the U.S. smartphone space continues to be Nokia (NYSE: NOK  ) , which has been struggling to regain its American mojo.

The latest and greatest BlackBerry will not only hurt competitors, but will also likely do a fine job of damaging the bottom line at Verizon Wireless. To match AT&T's iPhone price point, Verizon is pushing the Storm at a heavily discounted $200 with a two-year contract, a big swipe from its $500 price tag if you choose the month-to-month service plan. Investors reacted sharply to AT&T's admission that the hefty iPhone subsidy it was doling out took a $900 million bite out of earnings in the third quarter. If Verizon sees similar success in selling the Storm, it will also have a significant leak in reported earnings.

But Verizon will not only make a lot of it back on pricey plans, it can also chalk up the expense to a form of PR. As more customers get a Storm in their hands, the early adopters will be showing it off to just about everyone they come across. So while the Storm may be a rough ride early on, it will likely be smooth sailing for Verizon down the line.

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Fool contributor Dave Mock likes a good storm every now and then to break up the Southern California sun monopoly. He owns no shares of companies mentioned here. Sprint Nextel and Nokia are Inside Value recommendations. Google is a Rule Breakers selection. Apple is a Stock Advisor pick. The Fool's disclosure policy took out put options on Brittany Spears' career.


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