BlackBerry zaps into Asia with Hutch

CNN's Kristie Lu Stout

HONG KONG, China (CNN) -- One of North America's hottest mobile gizmos has zapped its way to Asia.

After attracting more than 325,000 users in North America and Europe, Research in Motion (RIM) has finally launched its BlackBerry product in Hong Kong.

"Our corporate customers have told us they want us to be where they go and certainly Asia and Hong Kong is a place that they go," RIM Chairman and co-CEO Jim Balsillie told CNN.

Digital assistance

The BlackBerry maker has teamed up with Hutchison Whampoa to market the BlackBerry in gadget-crazy Hong Kong.

True to form, the management team headed by tycoon Li Ka-Shing managed to secure exclusive rights to the device, prompting the RIM executive to call his new partner a "ferocious negotiating team."

"They're very, very committed. I've never seen anyone quite so thorough or comprehensive and clear as they are," said Balsillie.

"And I respect them for it. But once you come to agreement they shake your hand and stick to it. So I give them credit for their business focus and their integrity."

RIM and Hutchison have plans to extend their relationship to mainland China and Hutchison's budding 3G empire.

"Hutchison and RIM share a long-term vision on the wireless future. We have the intention to work together to develop 3G applications and extend RIM's technology to our group's 3G markets worldwide," said Canning Fok, Hutchison Whampoa Group Managing Director.

But no details on timing or execution were revealed on how the two companies would approach the mainland market.

China is the world's largest mobile market, and is dominated by China Mobile and China Unicom. Hutchison already has a joint venture with China Unicom via its Hutchison Telecom unit.

Chipping away at RIM

For the uninitiated, the BlackBerry is an all-in-one communication device strapped to the hips of personalities like Jennifer Lopez, Pamela Anderson, and Michael Dell.

The wireless mobile gadget has a built-in organizer, GPRS cell phone and keyboard, which allows users to send and receive email messages.

But a hot product and an eager market may not translate into instant success.

RIM must contend with a delay in the rollout of GPRS, the network technology required to support its products, and intensifying competition.

Handset and handheld makers including Nokia, Palm and Handspring have revealed new mobile products for the corporate market, chipping away at RIM's lucrative niche.

RIM is fighting off the competition by licensing its technology to companies like Yahoo! to tap into the consumer market, and by expanding aggressively overseas – a strategy that comes with a steep price tag.

"Every time you bring up a new carrier you invest in that carrier. You have to invest in localization, in care, in inter-op testing," said RIM's Balsillie.

"Every time you turn on a carrier you invest to do that but you are investing in the long term and that's the balancing act we have to strike. How much do you invest? What do you reap and what do you sow?"

In the red

The balancing act thus far has tipped into the red. Last month, RIM doubled its loss forecast for the first quarter and said it will continue to post losses until the end of the business year.

Shares of the company have fallen 90 percent from a record high of more than $175 in February 2000.

As in Europe and North America, the BlackBerry will be sold in Hong Kong on a licensing basis to companies, not individual users.

For the first 20 BlackBerry users, the cost of Blackberry Enterprise server software is HK$39,800, and thereafter HK$6000 per 10 users.

Hutchsion will be selling the BlackBerry handset to existing subscribers at HK$3980 plus a monthly charge of HK$538 for unlimited email access.