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The BlackBerry smartphone better watch its back. A faster, cheaper - and maybe even smarter - phone is within weeks of hitting the market. Rival Apple Inc. has finally launched its long awaited next-generation iPhone, which will be compatible with 3G networks and priced from $199 (8 gigabyte model), half of the first generation’s current price. The new corporate-friendly version, due out July 11, will also provide a faster Internet connection and compatibility with Microsoft Outlook, the popular corporate e-mail system.

Calyon Securities analyst Charles Park said Apple’s aggressive pricing strategy should be viewed, in general, as “negative” for handset vendors like Research In Motion, maker of the BlackBerry, as he expects competition in the smartphone segment to increase. “Although Research In Motion remains the definitive leader in the business segment with the largest amount of U.S. market share and close competition with Windows Mobile worldwide, the Canadian company could experience a deceleration of its growth going onwards,” Park said in a client note.

At Deutsche Bank, analyst Chris Whitmore said the iPhone 3G, which features built-in GPS, faster speeds and enhanced battery life, could create a potential threat to Apple’s own iPod music player. “The lower price point will likely impact iPod unit sales, perhaps increasing cannibalization of the iPod touch, a trade-off Apple is more than willing to make due to the subsidies associated with the iPhone and dramatically expanded reach/global distribution.”

In addition to unveiling its next generation iPhone, the Cupertino, Calif.-based maker of computers and electronics announced on Monday changes in its iPhone business model. Specifically, Apple said it will no longer receive follow-on revenue generating payments from carriers for the iPhone 3G beyond the purchase of the phone by carriers or a commission on sales of the phone by Apple.

Goldman Sachs analyst David Bailey said that while there is a lack of clarity around the changes in Apple’s iPhone business model, once “the smoke clears” he expects the iPhone 3G to be more competitive. “[T]he changes in Apple’s iPhone business model will in some ways overshadow the 3G iPhone product announcement and will undoubtedly increase the volatility in the shares near term. That said, we expect the move from a revenue-sharing payment model to a subsidy model with the carries to be essentially revenue neutral to Apple, while the lower price points will drive incremental iPhone units.”

Several other analysts responded to the news by raising their iPhone sales estimates. Lehman Brothers analyst Ben Reitzes now expects fiscal 2008 iPhone unit sales of 23 million, up from his previous projection of 14.8 million. Merrill Lynch analyst Jeff Fidacaro lifted his iPhone unit estimates to 22 million from 20 million in fiscal 2009 and to 34 million from 30 million in fiscal 2010. At Citigroup, Richard Gardner boosted his calendar-year 2009 unit estimate to 23 million from 26 million and his calendar-year 2010 unit estimate to 28 million from 20 million.

Despite gloom-and-doom prognostications, Americans continue to buy and read books. What’s more, the vast majority of readers prefer old-fashioned print books to electronic readers.

A Zogby International/Random House survey of reading habits in the U.S., released last week, found only 3% of respondents owned an electronic book reader. While about 4% of people said they planned to buy one, some 80% of those surveyed said they won’t. Old habits appear to die hard: Some 82% of readers like to curl up with a printed book; a scant 11% of poll respondents said they’d be comfortable reading electronic books or book content online.

That apparently rather tepid interest in newer reading formats doesn’t mean there’s no room for new technology, but it suggests the enthusiasm of first adopters has yet to spread to a broader readership.

Readers are already comfortable buying books online - more than three-quarters of Zogby/Random House poll respondents said they buy books on the Web, but the Internet doesn’t dominate the market. The same percentage said they buy books at chain bookstores, while almost half said they purchase books at independent bookstores.

Amazon recently cut the cost of the Kindle, its e-reader, to $359 from $399. The Kindle was launched in November and appears to have sold well, although it’s garnered mixed reviews. The initial stable of 90,000, instantly downloadable titles available to users has since grown to more than 125,000, and e-book sales have contributed a measurable slice to Amazon’s book revenue: book downloads made up more than 6% of total sales of the 125,000 titles available both in the Kindle library and in ink-and-paper format, Amazon Chief Executive Jeff Bezos said last week.

Amazon is, unsurprisingly, enthusiastic about the Kindle’s prospects. Just Friday the company said Kindle users will have access to an additional 5,000 Simon & Schuster titles this year. And in a recent interview at the D: All Things Digital conference, Bezos told Walter Mossberg he can see the Kindle generating a significant portion of Amazon’s overall revenue some time down the road.

“We’re not trying to displace people’s love of that physical object that is the book,” Bezos said. “That doesn’t make any sense.” Still, he continued, printed books are like horses: people might love their horses, but those who saddle up to get to work are few and far between. Downloading long-form narrative content, he suggested, will eventually become the norm. “The thing to keep in mind is what’s really important is not the container, but it’s the narrative,” he continued. “Long-form reading is important for our society.

Bezos has said the Kindle is “re-igniting a love of reading,” but with Amazon cagey about releasing details of e-book and reader sales, that assertion is difficult to verify. And the Zogby/Random House poll suggests that book readers are more than a little fond of the physical object - the one that’s made of pulp and glue, that is.

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The use of the word “green” in reference to Apple’s iPod may soon carry another designation besides that of body color, according to a recent MacRumors.com report, which uncovered a patent filed by employees of the computer giant seeking approval for a technology that would enable solar cells to be inserted beneath a touch-sensitive screen like those in the company’s iPhone and iPod.

The patent could be the next arrow in Apple’s quiver in its bid for the top spot among smart phones and mp3 players. The company’s iPhone, which is no stranger to complaints about its battery life, ranked 15th in CNet’s quick guide to talk-time battery life, and the solar cell application is a sign that Apple is ready to attack the few complaints surrounding its smartphone all-star.

If the patent application is successful, according to a report in the Times Online (U.K.), it has the potential to “dramatically” increase the battery life of iPhones and iPods. This is important, as the article notes, because once a faster, third-generation version of the iPhone is released, “the device will become even more power-hungry.”

But headlines and hype are nothing new for the 3G iPhone, which Bernstein Research said is widely anticipated to debut around June 9 at Apple’s worldwide developers conference. The firm said that based on recent carrier announcements, Apple will introduce the 3G iPhone into at least 50 additional countries, some of which will feature more than one carrier.

Data from U.S. customs records show Apple is also readying a big product roll-out in early June, according to ImportGenius.

Yet, before Apple investors go running into the street to perform cartwheels, Bernstein cautioned that a surge in iPhone adoption is unlikely to “substantially” boost the company’s earnings in fiscal 2009, citing Apple’s subscription accounting. “For earnings-per-share to jump 50 cents, we estimate Apple will need to sell roughly 27 million phones in fiscal 2009, which would represent penetration of nearly 4% in all countries outside the U.S., which we think is aggressive,” Bernstein said.

Instead, the firm estimates fiscal 2009 iPhone sales of 15 million to 20 million units, generating roughly 20 cents per share in earnings for the Cupertino, Calif.-based company, based on expected lower average carrier payments because of Apple’s transition to multiple carriers in the same country.

Since the introduction of the iPhone, Apple Inc. has been the product to beat when it comes to meeting consumer connectivity needs with the latest and greatest smartphone. Research in Motion sought to change that Monday when it unveiled the latest version of its popular BlackBerry product, the Bold, in a move that revs up the battle for market share supremacy.

“Our take-away is that this is the first shot of the Research in Motion - Apple war that is starting,” JMP Securities analyst Sam Wilson said in a note to clients. “This summer, Apple will release its 3G iPhone and RIM will release Bold. These two companies are squaring off against one another.”

The Bold, which features an integrated global-positioning-system, Wi-Fi functionality, 128 megabytes of flash memory and 1 gigabyte of storage memory, is already receiving positive reviews from Wall Street analysts. In fact, Wilson even joked the latest smartphone from Research in Motion included “the kitchen sink,” and JPMorgan analyst Paul Coster called the device “very attractive.” Coster also lauded the screen resolution and brightness as setting the device apart from previous Blackberrys, while saying the new “Precision” user interface is easy to use and that the Bold is very fast.

Elsewhere, Citigroup reiterated a buy rating and $140 price target on Research in Motion shares, as the broker estimated the new product could increase the company’s quarterly shipments by 200,000 to 400,000 units.

Canaccord Adams also liked the product, saying: “With the (BlackBerry) 8700 approaching two years of service, we believe the BlackBerry Bold has the opportunity to become a blockbuster. We are hearing that pre-orders from AT&T and Vodafone could materially exceed expectations, which will likely drive upwards earnings revisions in the back half of the year.”

Still, some caution investors not to forget about Apple quite yet, as the computer giant may be biding its time until the much-anticipated launch of its 3G iPhone. After checking 11 U.S. retail stores and finding that only 6 had iPhones in stock, Piper Jaffray said the limited availability of iPhones indicates that the release of a 3G model is “imminent,” and that it expects an announcement in mid-June.

So much for worries about consumers.

Well more than 2 million net new BlackBerry subscriber accounts were added in the three months ended March 1, according to Canada-based Research In Motion. At the end of the last quarter, the company said its total BlackBerry subscriber account base was over 14 million.

Shares in the BlackBerry maker climbed to a four-month high Thursday as analysts cheered the company’s robust growth and upbeat guidance. After Wednesday’s closing bell, Research In Motion posted fourth quarter earnings of 72 cents a share and revenue of $1.88 billion. Analysts polled by Thomson Financial, on average, expected a profit of 70 cents per share on sales of $1.86 billion. The company also said it expects earnings of between 82 cents and 86 cents per share, above the Street consensus estimate of 76 cents. “The prospects for RIM and the industry are more exciting than ever,” Co-CEO Jim Balsillie said.

Goldman Sachs analyst Thomas Lee applauded RIM’s strong profit outlook Thursday, saying it is “a bright spot in this tough macro environment and is a testament to the level of importance consumers/enterprises place on the BlackBerry offering.” Lee said while the company certainly recognizes the possibility of facing potential macro headwinds, its guidance suggests that its business is “much more resilient” than other areas of IT spending, such as enterprise software and networking. The replacement and upgrade market also remains robust, Lee said, as RIM indicated that a number of 8700 subscribers are rolling off two-year contracts, which should help extend the strong momentum in the replacement market.

“BlackBerry is still in early stages and we see a number of drivers that make the story compelling, such as new products and increased stickiness within both the consumer and enterprise segments with offerings such as BB Unite, Facebook apps, and others,” Lee said.

Also worth noting is RIM’s rapid growth into the consumer segment, said JPMorgan analyst Paul Coster. RIM said in a conference call that about 38% of the BlackBerry subscriber base were non-enterprise at the end of the year, and well over half of the net new subscriber account additions in the fourth quarter came from non-enterprise customers. “The long-term secular growth story trumps our concerns regarding near-term consumer spending and seasonality - no hiatus at all,” Coster said in a research note Thursday.

Nothing can stop Research In Motion’s momentum, analysts say, not even the iPhone. In fact, contrary to some investor concerns, iPhone appears to have “helped, not hurt, RIM on strong domestic carrier promotions and retail activity,” said RBC Capital Market analyst Mike Abramsky.

Oppenheimer analyst Ittai Kidron believes BlackBerrys are “living in peace” with Apple’s iPhone. “A 3G iPhone is on its way and will compete for attention,” Kidron wrote to clients. “However, we believe iPhones and BlackBerrys can coexist in the marketplace as smartphone penetration rises and as both are fundamentally different and cater to a different user/price point.”

Here’s an SAT question for you: Hipsters are to iPods as businessmen are to ______ ? If you said Apple’s iPhone you’ll have to guess again, but if you said Research in Motion’s Blackberry, then good for you. Naturally, the answer to this question is something that upsets Apple, which would like to be the answer to every technology question and is working to do so. The technology giant just launched a Microsoft integration program for its popular iPhone gadget that allows users to connect to Microsoft mail servers.

The previous lack of this ability was cited as one of the few flaws in the phone, which has sold well but has hardly had the cultural impact that the iPod has. There was some speculation that with these new features, Apple may be able to usurp the Blackberry as the mobile e-mail phone product of choice for business men and women, who comprise one of the most desirable advertising groups.

But analysts aren’t convinced that this will be the case. RBC Capital Markets said that the iPhone, at least for now, “won’t threaten” Research in Motion, maker of the Blackberry. The firm cited the “lack of robust security features (such as stored data encryption), limited integration capabilities, network and device exclusivity, less IT-friendly support, and limited remote IT device management.”

RBC isn’t calling Apple’s product rotten just yet, however. RBC forecast that Apple would ship 11 million iPhones in 2008, thanks to expanded global distribution, enterprise server integration and the pending contribution from the expected “explosion” of innovative third-party applications.

Outside of the iPhone, RBC sees Apple’s computers rising to a 3.8% market share, up from 3.1% in 2007. The firm even called Apple “recession-resistant,” with international upside, product innovation, attractive pricing and what it calls “product stickiness.” It’s good new for Apple, which may be down for the moment, but certainly isn’t out.

In the past two months, the market took a hearty bite out of Apple. At $124, shares are down 37% year-to-date, leaving investors to feel picked over by the typically ascendant stock. JPMorgan analyst Bill Shope sought to allay some of the ambiguity by looking at best- and worst-case scenarios for Apple’s core products.

“All possibilities should be on the table in this time of economic uncertainty,” Shope said, identifying the company’s Mac business as most significant in gauging where the stock will bottom-out.

“[It's] the key swing factor for the stock at current levels, since we believe the performance of this business in an economic downturn will largely determine whether the stock has already bottomed or if there is still further downside,” Shope said.

Fortunately for Apple, Wall Street is optimistic, and Shope thinks the rosy view is warranted - even in the case of a recession - although historically, the computer and software company hasn’t fared well in an economic downturn.

“Several secular changes in the business model that make the business more resilient in its current form.” These include the broader Mac OS X operating system, the move to an Intel platform and virtualization programs enabling Windows applications on the Mac.

Additionally, the iPod’s popularity has widened Apple’s appeal among consumers.

Regarding Apple’s iPod and iPhone business segments, Shope said investors are now more realistic in their expectations.

“Fortunately, we believe sentiment for both iPods and iPhones has already begun to tread into pessimistic territory, representing a dramatic departure from the frothy consensus that dominated this story just two months ago,” he said.

Shope thinks near-term iPod sales may be affected by saturation and a consumer spending slowdown. Giddy tech investors are coming down from their iPhone highs as a result of the market downturn and scaled-back production.

Shope’s base case scenario for the Cupertino, Calif.-based company calls for sales growth of 26% in 2008 and 12% in 2009. Viewing the glass half-full, Shope sees the stock hitting $168; worst-casing it, the stock could fall to $87.

“The base case scenario implies we are currently at fair value,” he said.