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BlackBerry Price Slash Spells Doom for RIM


Research in Motion's lackluster BlackBerry Torch confirms it can't keep up with Apple and Google.

In an effort to regain its lost ground from the iPhone (AAPL) and Android (GOOG) devices, Research in Motion (RIMM) released what was meant to be a return to form for the manufacturer. A flagship smartphone intended to regroup the belt-holstered executives and IT admins back into its ranks. A device that proves RIM still has the chops to pull off some wonderfully innovative and attractive technology.

Released on August 12, the BlackBerry Torch 9800 was not such a device.

Straight away, the Torch looked like a pre-iPhone gadget. Buggy software, ugly layout, slow response time, horrid display. A decent keyboard and solid casing couldn't make up for a wealth of missing features and functions. It also looked as if the smartphone-buying public concurred -- and retailers have taken notice.

Although provider AT&T (T) may be hesitant to follow suit just yet, online retailers are slashing prices to unload the latest BlackBerry device. In a mere five days after its release, Amazon (AMZN), Wirefly, and Let's Talk have cut the cost of the Torch in half -- from $199 to $99. While discount prices are often found on competitors' websites, a 50% reduction in under a week isn't a good sign.

If you recall, Microsoft (MSFT) performed the final coup de grâce on the wildly unpopular Kin a few days after Verizon (VZ) slashed the cost of the pricier version in half. It's unlikely RIM will snuff the Torch so soon, but the sales figures aren't expected to be kind.

Indeed, RIM's market share is a far cry from its CrackBerry days. In terms of US smartphone sales, BlackBerry has fallen behind Android to the number-two spot over the second quarter. Worldwide, its market share is a mere 3.4%, placing the company in fourth place. And considering these numbers were tallied before Apple's introduction of the iPhone 4 and Motorola's (MOT) highly touted updates to its Droid line, RIM doesn't have much ammo left to take down the two powerhouses.

Like Microsoft, RIM has suffered the fate of growing lazy and complacent in the face of rampant smartphone innovation. Back in March, the snazzy gadgets offered by Apple and Google caught the eye of BlackBerry users who began looking to defect from RIM's fold. A line that was, by and large, associated with the workplace appeared stodgy and uninteresting compared to the fun and functional iPhone and Droid. Roughly 39% of users began eyeing the iPhone and one-third took notice of Android.

But five months later, a lackluster update to the BlackBerry line hasn't changed the fact that it's still missing the "fun factor." It might have worked in 2007, but succeeding in 2010 requires a flashier spectacle.

The question is, do RIM developers even have it in them?

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