2nd UPDATE: RIM To Launch Blackberry For Personal Use In China

Research In Motion Ltd. (RIMM) said Tuesday it will offer its Blackberry handsets to personal users and small businesses in China, and also plans to introduce a Blackberry handset running on the Chinese-developed third-generation mobile-phone technology.

RIM is working on both initiatives with China Mobile Ltd. (CHL), the world's biggest mobile carrier with 513.5 million subscribers as of the end of October.

Blackberry handsets have been available since 2006 to big businesses in China through China Mobile. The country also has a huge semi-legal "gray market" for smartphones such as the Blackberry and Apple Inc.'s (AAPL) iPhone, in which smartphones are brought in from places like Hong Kong.

"We view China as a strategic market, the largest wireless market in the world. And China Mobile is by far the largest mobile carrier in the world," RIM Co-Chief Executive Jim Basillie said Tuesday at a press briefing.

China introduced 3G mobile-phone services this year, allowing smartphone makers such as RIM and Apple to sell consumers high-end handsets with functions such as high-speed web browsing.

China Mobile operates a 3G network on a domestically developed technology called TD-SCDMA, or Time Division Synchronous Code Division Multiple Access. Its two rivals in China use international 3G standards that are widely used around the world. To run at 3G speeds on China Mobile's network, the Blackberry had to be redesigned to run on the TD-SCDMA standard.

RIM demonstrated a TD-SCDMA-based handset Tuesday, but Basillie declined to comment on when it would be available in China.

"We did a demonstration today," he said. "Usually, when you have a demonstration, it's well along the way."

Neither company would comment on how much the TD-SCDMA-based handset will cost, but China Mobile Chairman Wang Jianzhou said the carrier will offer subsidies. "We provide handset subsidies for all TD-SCDMA phones."

Basillie said he wasn't sure how many Blackberry handsets had been sold in China.

"There's a number that has been sold directly, and quite frankly, there's a number that have come in through other channels," he said.

Basillie said RIM is investing in manufacturing and research and development in China. The company procured US$2 billion worth of goods in China for its global operations this year, he added.

China Mobile has repeatedly said it is in talks with Apple to offer the iPhone in China, but Wang declined to say Tuesday if those talks are ongoing. The iPhone is currently available through one of China Mobile's smaller rivals, China Unicom (Hong Kong) Ltd. (CHU).

China's third telecommunications company, China Telecom Corp. (CHA), has said it is in talks with RIM to offer the Blackberry in China, though Basillie declined Tuesday to say if the talks are still taking place.

-By Aaron Back, Dow Jones Newswires; (8610) 6588-5848; aaron.back@dowjones.com

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