RealTime IT News

BlackBerry to Go to China

Like many U.S. electronics makers, Research In Motion has had its eyes set on China's massive market for digital devices. Now, through a deal with Hong Kong-based Digital China Holdings Limited, the BlackBerry maker could get its wish.

The two companies today announced a distribution deal under which Digital China -- a unit of Lenovo parent Legend Holdings -- would distribute RIM's (NASDAQ: RIMM) BlackBerry devices in China, using its nationwide distribution network.

Up for grabs is a share of the country's staggering electronics market, with more than 710 million mobile users alone, according to statistics released in October by China's Ministry of Industry and Information. Now Digital China, a major IT services provider and distributor, is aiming to deliver a chunk of the nation's wireless consumers and businesses to RIM.

"Digital China has always believed in advanced and cutting-edge products that deliver value to Chinese customers," Digital China Chairman and CEO Guo Wei said in a statement. "Through this collaboration, RIM will leverage Digital China’s proven professional services and nationwide coverage to reach more customers and to increase the visibility of the BlackBerry solution across the country."

It's unclear which BlackBerry devices are to be covered under the deal.

While striking an arrangement for distribution in China is a major victory for any U.S. electronics vendor, it doesn't mean the battle's over. Apple, for instance, also recently began selling its iPhone in China through a partnership with local carrier China Unicom, though the effort is still seen as something of an uphill struggle.

For example, Apple (NASDAQ: AAPL) cannot sell the devices with working Wi-Fi connections, limiting their functionality. Additionally, the iPhone may prove unappetizingly expensive for the average Chinese buyer: Without a contract, the device's price tag could range from $730 for the 8GB 3G model to $1,000 for the 32GB iPhone 3G S.

There's also the concern of the country's vast gray market , through which mobile devices can be made and sold outside of authorized channels -- enabling their sellers to skirt taxes, government regulation and other oversight, like quality assurance testing.

And the gray market is growing. Hardware industry researcher iSuppli said Chinese gray market firms will ship 145 million units wireless devices in 2009 -- up 43.6 percent from the previous year.

It's unclear which devices will be covered through Research In Motion's own deal for access to China, and whether any of its Wi-Fi-enabled units will be similarly limited.

Still, Research In Motion is describing its new agreement as a win.

"Business partnerships are an important aspect of RIM's strategy and Digital China's extensive knowledge and market presence will further expand the opportunity for RIM in China," RIM Co-CEO Jim Balsillie said in a statement.