September 22, 2023

Nintendo Cuts a Dimension From a Device Aimed at Youths

Nintendo on Wednesday introduced a new portable gaming system, the Nintendo 2DS. The device will cost $130, or $40 less than its 3DS sibling, when it is released Oct. 12. It is capable of running all the games made for the 3DS, but without 3-D effects.

For Nintendo, the price drop is a hedge against a future filled with tablet computers made by companies like Apple, Samsung and Amazon.

“Forty bucks may not be a lot, but for families it’s a lot,” said Reggie Fils-Aime, president of Nintendo of America, in an interview. Mr. Fils-Aime said the 2DS was intended for the “entry gamer,” especially in families with multiple children. Nintendo is pairing the device’s release with the introduction of two new Pokémon games, a series that is popular among children.

The growing popularity of tablets among adults means that children are increasingly exposed to tablets at an early age. About one-third of American adults own tablets. But that figure rises to about 50 percent among parents with children living at home, according to Pew Internet Research. In another survey, IDC, the research firm, polled gamers who were considering buying a tablet or dedicated gaming device. Roughly 60 percent of respondents said they were leaning toward buying an iPad, iPod Touch or Android tablet, IDC said.

Younger gamers are drawn to tablets as well. A large number of the respondents to the IDC survey who said they were planning to buy a tablet or iPod Touch were under 24 years old, a demographic group that has historically been strong for Nintendo, said Lewis Ward, an IDC analyst that focuses on the game industry.

“The real concern for Nintendo and Sony is what’s going on with the next generation of gamers,” Mr. Ward said. “That’s an existential threat if the younger generation isn’t buying it at the same level as the customer base that has known you for a decade has.”

Also on Wednesday, Nintendo said it would reduce by $50 the price of its console for the living room, the Wii U, which has had disappointing sales. The new price will be $300.

The gaming market has expanded over the last several years thanks in part to smartphones and tablets. These devices have attracted what analysts call casual gamers — the people who yank out their smartphones and tablets to play games a few minutes on the commute to work, or the toddlers who play Angry Birds at family dinners.

Despite all that competition, Nintendo’s portable gaming device has been doing well.

The 3DS has been the best-selling piece of gaming hardware in the last three months, according to NPD Group. The last, best-selling portable gaming device was the Nintendo DS; with more than 150 million units sold, it has become the best-selling portable gaming device in history.

With the addition of the 2DS, Nintendo now offers three portable devices, including the 3DS and the larger 3DS XL.

Tablets are considered a threat to Nintendo because games can be downloaded for a few dollars, or even free. Nintendo’s strategy has been to make most of its money from sales of the games it produces exclusively for Nintendo devices. Therefore, it has refused to offer its games to makers of tablets and smartphones.

That means famous titles native to Nintendo, like Super Mario or Donkey Kong, could be left to earlier generations. And that’s bad news for the Japanese company.

“The longer that they abstain from those platforms, the longer they risk failing to acquaint children with that stable of characters,” said Ross Rubin, an independent technology analyst for Reticle Research. “Since there is virtually no presence on these screens that kids are starting to increasingly spend more and more time with, Nintendo is going to have to work harder to gain exposure to that audience.”

Mr. Rubin said there were several ways for Nintendo to participate in the mobile market outside of selling games for its own devices, without cannibalizing its own business. The company could offer software that complements its games and systems, like iPad apps that turn the tablet into an extra controller for the 3DS or Wii U. Nintendo could also create lightweight versions of its games for tablets and phones, using them to promote the superior versions of the games available only for Nintendo systems, he said.

For the moment, however, cost-cutting appears to be Nintendo’s answer.

“All we’re doing is making available a device that, for consumers who want a lower price point but want to play all these great games, now you have the opportunity,” Mr. Fils-Aime said. “And we think it’s going to work.”

Mr. Ward of IDC said that the cost-cutting strategy should be effective, at least for now, and that Nintendo could afford the price cut thanks to a stronger yen.

“It’s going to attract some entry-level gaming enthusiasts who were on the fence about the 3DS,” Mr. Ward said.

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Smartphones and Tablets Outsell PCs at Lenovo

That milestone, which the company announced Thursday, underlines the growing influence of Chinese companies like Lenovo in the shift from desktop to mobile computing. Now even Lenovo, which acquired the IBM PC business in 2005 and sells ThinkPad notebooks, is remaking itself for a post-PC era.

Lenovo said its sales of smartphones had more than doubled in the three months that ended June 30, to 11.4 million. The company also sold 1.5 million tablet computers.

Executives said Lenovo had benefited from a structural shift in the smartphone business, where the high end, dominated by Apple and Samsung Electronics, is showing signs of saturation. Meanwhile, sales of less expensive handsets made by Lenovo and other Chinese companies, like Huawei and ZTE, are growing more rapidly. “The recent change in the market favors Lenovo and our business model,” Yang Yuanqing, chief executive of Lenovo, said in a conference call with analysts. “The market is shifting from the premium part to the mainstream. It is shifting from the mature markets to the emerging markets.”

Lenovo was the fourth-largest maker of smartphones worldwide in the second quarter, according to IDC, a research firm, with a market share of 4.7 percent, up from 3.1 percent a year earlier.

The company’s smartphone business relies heavily on China, which accounts for about 80 percent of sales, but Lenovo is trying to expand its global presence.

On Thursday, Lenovo executives declined to comment on speculation about a possible bid for BlackBerry, which has put itself up for sale. But Lenovo made it clear that it did not plan to rely on internal, or “organic,” growth alone.

“Given its solid financial position, the group will continue to actively look for inorganic growth opportunities which will supplement its organic growth strategy to accelerate future expansion,” Lenovo said in its latest quarterly earnings report.

Analysts say acquisitions might be one way for Lenovo to address some of the shortcomings of its smartphone arm, including the low prices that its devices fetch — an average of less than $100 in China, while devices like Apple’s iPhone 5 and Samsung’s Galaxy S4 cost more than $700 in that country.

Because of the low prices, Lenovo’s smartphone and tablet arm generated only 14 percent of the company’s revenue in the most recent quarter. The company remains heavily reliant on its PC division for sales and earnings, even though that business is shrinking.

Lenovo has managed the decline better than some of its rivals. Its shipments of computers slipped 1.4 percent in the second quarter, to 12.6 million, compared with a decline of 11 percent in the overall market, according to IDC. As a result, Lenovo overtook Hewlett-Packard and become the world’s largest PC maker in the period. That helped Lenovo post a 23 percent increase in net income, to $174 million, for its financial first quarter, which ended in June. The results were above analysts’ expectations.

Despite the solid performance of the PC division, company executives have taken to calling Lenovo a “PC-plus” company. Mr. Yang stuck with a previous forecast that the company would sell 50 million smartphones and 10 million tablets in the current quarter. But he acknowledged that Lenovo still had work to do in getting out the message about its mobile devices in markets beyond China.

“We still need to invest in the branding, we still need to invest in the channel and network building,” he said.

In China, Lenovo’s mobile business is growing rapidly. Canalys, a research firm, said it had shipped 10.8 million smartphones there in the second quarter, second only to Samsung, with 15.5 million. That is a strong base from which to develop new phones for other price-conscious developing markets, analysts say.

“The whole dynamic favors Lenovo a lot,” said Jenny Lai, an analyst at HSBC. “If you are No. 2 in the largest market in the world, your suppliers will come to you.”

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Weak PC Market Catches Up to Microsoft

On Thursday, the company missed Wall Street forecasts, blaming the declining PC market for the shortfall. Microsoft also acknowledged the disappointing sales of one of its most prominent products, its Surface RT tablet computer, by taking a $900 million charge to reflect unsold inventory of the device.

“It finally caught up to them,” said Colin W. Gillis, an analyst at BGC Partners. “We’ve been in a PC recession for five quarters.”

For the fiscal fourth quarter that ended June 30, Microsoft, which is based in Redmond, Wash., reported net income of $4.97 billion, or 59 cents a share, in contrast to a loss of $492 million, or 6 cents a share, in the period a year earlier. Last year, Microsoft took a $6 billion write-down on a soured acquisition, wiping out its overall profit.

In the latest quarter, revenue rose 10 percent, to $19.9 billion, from $18.06 billion a year earlier.

Those results fell well short of the average analyst estimates compiled by Thomson Reuters of 75 cents a share in earnings and $20.73 billion in revenue.

Revenue from Microsoft’s Windows business, which includes its Surface tablet computers, rose 6 percent, to $4.41 billion. But without including the favorable impact from an upgrade offer last year, Microsoft’s Windows revenue fell 6 percent in the quarter.

Last week, the research firm Gartner reported that global PC shipments declined 10.9 percent in the second quarter of the year, the fifth consecutive quarter of declining PC shipments, the longest ever.

Mobile devices have sapped much of the gusto out of the PC market. Many people are buying tablet computers, especially Apple’s iPad, instead of PCs to watch movies, surf the Web and write e-mails.

“We know we have to do better, particularly on mobile devices,” Amy Hood, Microsoft’s chief financial officer, said in an interview.

Ms. Hood said the company’s Windows business is a “tale of two markets,” one in which PC sales to businesses continue to grow modestly, while consumer demand for the machines is fizzling. She estimated that total industry PC shipments to the consumer market fell more than 20 percent during the quarter.

She said that a companywide reorganization that Microsoft announced last week was part of an effort to better position the business for big changes in technology, including the shift to mobile devices.

Until its most recent quarter, Microsoft showed a remarkable aptitude for finding ways to squeeze money out of its venerable business, despite the problems in the PC market. It did that through lucrative multiyear software contracts with corporate customers that tend to move far more slowly than consumers in adopting newer technologies.

Parts of Microsoft that cater more to businesses helped lessen the sting. Microsoft said revenue in its server and tools group rose 9 percent, to $5.5 billion. Revenue in its business division, dominated by the Office suite of applications, jumped 14 percent, to $7.21 billion. But the division grew only 2 percent without deferred revenue related to an earlier upgrade offer.

Office is under siege from a suite of online applications from Google and others, which has led Microsoft to adapt the software so it can be delivered as a service through cloud computing. Microsoft said that if Office 365, the version of its productivity applications that are offered as a service, were to perform for a full year at current levels, it would generate $1.5 billion in revenue.

“The consumer has voted,” said Barbara Coffey, an analyst at SP Capital IQ. “I don’t know that enterprise has yet. We’ve seen such a big shift to tablets. Microsoft just doesn’t play in tablets at the same level that they do in PCs.”

Investors had become more bullish on Microsoft’s ability to navigate the disruption of the PC market, sending its shares up more than 32 percent this year. But after the release of its financial results, shares of Microsoft dropped more than 6 percent in after-hours trading. They ended regular trading at $35.44, down 30 cents.

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Wall Street Rebounds, Lifted by Technology Earnings

Strong earnings from two technology giants helped the stock market recover some of its losses on Friday, a positive end to Wall Street’s worst week in five months.

Microsoft and Google both beat earnings expectations this week, yields of government bonds ticked up, and copper, a crucial industrial metal, continued its fall, losing 2 percent.

Microsoft shares gained 3.39 percent, to $29.76, pushing the Dow Jones industrial average higher. It reported earnings late Thursday that beat analysts’ forecasts and showed solid results from its Office, software tools and Xbox divisions. Google’s stock climbed 4.43 percent, to $799.87. It raised its prices for ads distributed to smartphones and tablet computers.

The Standard Poor’s 500-stock index rose 13.64 points, to 1,555.25, up 0.88 percent. The Dow gained 0.07 percent, or 10.37 points, to 14,547.51.

The Dow spent most of the day down, pulled lower by disappointing results from I.B.M., whose shares slipped 8.28 percent, to an even $190. The company’s earnings fell short of forecasts for the first time since 2005.

The Nasdaq composite index gained 39.70 points, to 3,206.06, up 1.25 percent.

Traders, like everyone else, were following the news out of Boston, where police were hunting for one of two brothers suspected to be behind the Boston Marathon bombings on Monday. But the news had no impact on markets, traders said.

The slight gains on Friday could not overcome a tough week for the market, when both the S. P. 500 and the Dow lost 2.1 percent. That is their biggest weekly drop since last November.

“Compared to the rest of the week, it looks like we’re going to slide into the weekend on a quiet note,” said Jim Baird, partner and chief investment officer for Plante Moran Financial Advisors.

By many measures, the markets have endured a rough five days. News that economic growth had slowed in China set off a slide in commodity prices on Monday, leading the stock market to its worst day of the year. Gold dropped below $1,400 an ounce for the first time in two years.

The stock market bounced back the next day, then fell again on Wednesday, its third-worst day this year.

Most big corporations have beaten analysts’ low expectations for first-quarter profits. Of the 104 companies that turned in results through Friday morning, 70 have topped forecasts, according to SP Capital IQ.

Analysts estimate that earnings for companies in the S. P. 500 rose just 2 percent over the previous year, a slowdown from the 7.7 percent rise in the fourth quarter of 2012.

Next week will be another big week for earnings as 10 members of the Dow and 181 companies in the S. P. 500 report results.

Interest rates gained. The yield on the 10-year Treasury note climbed to 1.71 percent, up from 1.69 percent late Thursday, while its price fell 6/32 to 102 21/32.

Traders cautiously returned to buying certain major commodities on Friday, including gold and oil, after big sell-offs early this week. But copper continued its fall, losing 2 percent to $3.16 a pound.

Rex Macey, the chief investment officer at the Wilmington Trust Investment Advisors, said markets were bound to encounter turbulence as long as the economy advanced at a slow pace.

Forecasts say the United States economy will expand 2 percent this year.

Joseph Tanious, a global market strategist at J. P. Morgan Funds, said: “We’re going to have a stronger 2013 than 2012.”

He added, “But the recovery is going to be much more bumpy than people thought.”

This article has been revised to reflect the following correction:

Correction: April 19, 2013

Because of an editing error, an earlier version of this article misstated the day’s change for General Electric stock. It was down 4 percent, not 0.9 percent.

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Microsoft Profit Rises 19%

The company, based in Redmond, Wash., also disclosed that Peter Klein, its chief financial officer, will leave the company this year after nearly four years of running its finance department. Mr. Klein’s departure was unexpected, and Microsoft said it would name a new C.F.O. from its finance team within the next several weeks.

Microsoft is closely identified with the PC business, which is struggling as new types of electronics products, most notably smartphones and tablets, nibble away at sales. The research firm IDC recently reported that global PC shipments fell almost 14 percent during the first three months of the year, the industry’s worst performance in almost two decades.

During its fiscal third quarter, which ended March 31, Microsoft said revenue from its Windows division rose 23 percent to $5.7 billion from $4.63 billion a year earlier.

The company reported better financial performance than the overall PC sector for several reasons. Its Windows sales for the quarter included the delayed recognition of revenue from an upgrade offer that allowed Microsoft customers last year to receive the latest Windows operating system, Windows 8, after it was released last fall. Without that deferred revenue, sales in Microsoft’s Windows division were flat, the company said.

The Windows results included sales of Surface, a family of Microsoft-designed tablet computers that the company did not begin selling until late last year. Finally, the business got a lift from multiyear licensing agreements with big corporate customers, which allow them to install new versions of the operating system on their computers, with Microsoft gradually recognizing the revenue over the life of the contracts.

Analysts said the results were better than some of the more dire outcomes that had been predicted for Microsoft. “Windows revenue being flat is better than being down double digits,” said Colin Gillis, an analyst at BGC Financial.

The company’s profit figures exceeded Wall Street estimates and the company’s shares rose 2.7 percent in after-hours trading.

For its fiscal third quarter, which ended March 31, the company reported net income of $6.06 billion, or 72 cents a share, up from $5.11 billion, or 60 cents a share in the same period a year ago.

Revenue rose 18 percent to $20.49 billion from $17.41 billion.

While revenue came in slightly below analysts’ expectations of $20.56 billion, the company beat Wall Street forecasts of 68 cents a share, according to an average estimate compiled by Thomson Reuters.

Microsoft still has a lot of work to do to restore growth to its Windows business, one of the main engines of the company’s profits. The company created a markedly different interface for Windows 8 to make the software work better on touch-screen devices. But its look is so different from past versions of Windows that the product might have put off some customers, according to IDC, and some PC makers say they’ve been disappointed with the customer reception of Windows 8.

The company has also struggled to gain ground in the mobile phone market with an operating system called Windows Phone, which lags far behind Apple’s iPhone and devices running Google’s Android operating system in market share.

In an e-mail sent to Microsoft employees on Thursday, Microsoft’s chief executive, Steve Ballmer, said that “while the mobile device environment is challenging, the decisions we made with Windows 8 and Windows Phone 8 set us up well for long-term growth.”

The departure of a chief financial officer is often the source of hand-wringing among investors, who fear it could be a sign of deeper financial problems at a company. Microsoft has seen the departure of a number of other high-level executives over the past several years, raising concerns about its ability to retain talent.

“They’ve had a lot of departures, so that part is troubling,” said Brendan Barnicle, an analyst at Pacific Crest Securities.

But investors seemed to shrug off the news of Mr. Klein’s departure. In an interview, Mr. Klein said he was leaving Microsoft after 11 years at the company to spend more time with his family, which he said he could not do during his career in business.

“This is what it is,” Mr. Klein said. “I’ve been killing it for 30 years.”

Microsoft’s broad product portfolio helped lift its growth, including its server and tools division, which rose 11 percent to $5.04 billion. The company’s business division, which includes its Office software and a new service called Office 365, rose 8 percent to $6.32 billion.

Microsoft’s Internet division, a perennial money-loser for the company, bled only $262 million in red ink in the quarter, compared to $480 million a year earlier.

“I always feel with Microsoft there’s a lot of good things they don’t get credit for, but they are facing a lot of challenges,” Mr. Gillis said. “That’s going to be the focus.”

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Delegation to North Korea Urges More Access to Internet and Cellphones

Bill Richardson, the former New Mexico governor leading the delegation, said on Wednesday in an interview in Pyongyang, the North Korean capital, that his nine-member group had also called on North Korea to put a moratorium on missile launchings and nuclear tests that have prompted United Nations sanctions. He said the group had also asked for “fair and humane treatment” for Kenneth Bae, a naturalized American citizen born in South Korea who was detained by the North in November and charged with unspecified “hostile acts.”

The delegation’s visit has been criticized for appearing to hijack United States diplomacy and bolster North Korea’s profile after its latest, widely condemned rocket launching less than a month ago. The State Department criticized the trip as unhelpful at a time when the United States is rallying support for action by the United Nations Security Council.

Mr. Schmidt is the highest-profile American business executive to visit North Korea since Kim Jong-un took power a year ago. A vocal proponent of Internet freedom and openness, he has not said publicly what he hopes to get out of the visit. On Wednesday, he toured the frigid quarters of the brick building in central Pyongyang that is the heart of North Korea’s computer industry. He asked questions about North Korea’s new tablet computers as well as its Red Star operating system, and he briefly donned a pair of 3-D goggles during a tour of the Korea Computer Center.

Mr. Richardson, who has described the delegation as a private humanitarian mission, said that the members were bringing a message that more openness would benefit North Korea. Most in the country have never logged onto the Internet, and the authoritarian government strictly limits access to the Web.

North Korea has exercised strict control over its population of 24 million since it was founded by Kim Il-sung in 1948, including tight rules on the flow of information and close monitoring of the people’s interaction with the outside world.

But as the North’s tiny economy has languished in its isolation, the government has sought in recent years to turn its economy around by carefully and cautiously reaching out to foreign nations — primarily neighboring China and Southeast Asian allies — for help.

Mr. Kim, has made improving the economy a focal point of national policy for 2013, and has urged the people to expand their knowledge of science and technology to reach that goal.

Across the snowy capital, new propaganda signs and slogans reiterate those goals, exhorting the people to “break through the cutting edge” and “push back the frontiers” of science and technology in the spirit of the recent missile launching. On Dec. 12, the North shot a satellite into space on a long-range rocket, a move celebrated in Pyongyang but condemned by Washington and others as a banned test of missile technology.

In the North, the number of cellphone users has surpassed 1.5 million in a few years. The Egyptian telecommunications giant Orascom provides a 3G service.

But while global broadband Internet is available in North Korea, few have permission to access it. Those with computers and Internet access typically are restricted to a domestic intranet site that filters the information and publications available to North Koreans.

On Tuesday, Mr. Schmidt, Mr. Richardson and other delegation members chatted with students who have permission to access the global Internet for research at the elite Kim Il-sung University in Pyongyang.

On Wednesday, the group toured the main library in Pyongyang, the Grand People’s Study House, where locals still in their winter coats were crowded into drafty, unheated halls at computers with intranet access to the library’s archive of books, documents and newspapers.

Later, the delegation visited the multistory Korea Computer Center, the hub of North Korea’s software and computer product development, where a quote from the current leader’s father and predecessor as leader, Kim Jong-il, reads: “Now is the era for science and technology. It is the era of computers.”

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Data-Gathering via Apps Presents a Gray Legal Area

BERLIN — Angry Birds, the top-selling paid mobile app for the iPhone in the United States and Europe, has been downloaded more than a billion times by devoted game players around the world, who often spend hours slinging squawking fowl at groups of egg-stealing pigs.

While regular players are familiar with the particular destructive qualities of certain of these birds, many are unaware of one facet: The game possesses a ravenous ability to collect personal information on its users.

When Jason Hong, an associate professor at the Human-Computer Interaction Institute at Carnegie Mellon University, surveyed 40 users, all but two were unaware that the game was storing their locations so that they could later be the targets of ads.

“When I am giving a talk about this, some people will pull out their smartphones while I am still speaking and erase the game,” Mr. Hong, an expert in mobile application privacy, said during an interview. “Generally, most people are simply unaware of what is going on.”

What is going on, according to experts, is that applications like Angry Birds and even more innocuous-seeming software, like that which turns your phone into a flashlight, defines words or delivers Bible quotes, are also collecting personal information, usually the user’s location and sex and the unique identification number of a smartphone. But in some cases, they cull information from contact lists and pictures from photo libraries.

As the Internet goes mobile, privacy issues surrounding phone apps have moved to the front lines of the debate over what information can be collected, when and by whom. Next year, more people around the world will gain access to the Internet through mobile phones or tablet computers than from desktop PCs, according to Gartner, the research group.

The shift has brought consumers into a gray legal area, where existing privacy protections have failed to keep up with technology. The move to mobile has set off a debate between privacy advocates and online businesses, which consider the accumulation of personal information the backbone of an ad-driven Internet.

In the United States, the data collection practices of app makers are loosely regulated, if at all; some do not even disclose what kind of data they are collecting and why. Last February, the California attorney general, Kamala D. Harris, reached an agreement with six leading operators of mobile application platforms that they would sell or distribute only mobile apps with privacy policies that consumers could review before downloading.

In announcing the voluntary pact with Amazon, Apple, Google, Hewlett-Packard, Microsoft and Research in Motion, whose distribution platforms make up the bulk of the American mobile app market, Ms. Harris noted that most mobile apps came without privacy policies.

“Your personal privacy should not be the cost of using mobile apps, but all too often it is,” Ms. Harris said at the time.

But simple disclosure, in itself, is often insufficient.

The makers of Angry Birds, Rovio Entertainment of Finland, discloses its information collection practices in a 3,358-word policy posted on its Web site. But as with most application makers around the world, the terms of Rovio’s warnings are more of a disclaimer than a choice.

The company advises consumers who do not want their data collected or ads directed at them to visit the Web site of its analytics firm, Flurry, and to list their details on two industry-sponsored Web sites. But Rovio notes that some companies do not honor the voluntary lists.

As a last resort, Rovio cautions those who want to avoid data collection or ads simply to move on: “If you want to be certain that no behaviorally targeted advertisements are not displayed to you, please do not use or access the services.”

Despite multiple requests by phone and Internet over five days, Rovio did not respond to questions.

Policy practices like Rovio’s often do little to inform consumers. Most people simply click through privacy permissions without reading them, said Mr. Hong, the Carnegie Mellon professor. His institute is developing a software tool called App Scanner that aims to help consumers identify what types of information an application is collecting and for what likely purpose.

In Europe, lawmakers in Brussels are planning to bring Web businesses for the first time under stringent data protection rules and to give consumers new legal powers, the better to control the information that is being collected on them.

Proposed revisions to the European Union’s General Data Protection regulation now before the Civil Liberties, Justice and Home Affairs Committee of the European Parliament would require Web businesses to get explicit consent from consumers to collect data. A proposal would also give consumers the ability to choose what information an app can store on them without losing the ability to use the software.

But the drafting of the revisions, which are not expected until late 2013 at the earliest, has set off a concerted lobbying battle by global technology companies, most of which are based in the United States, to weaken the consent requirements, which could undermine the advertising-
financed business models that drive many free applications.

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Bits Blog: RIM Shows Off New BlackBerry Phones, but Gives No Release Date

Thorsten Heins, the president and chief executive of RIM, did not offer a specific date for the coming line of BlackBerry 10 phones.Eric Risberg/Associated Press Thorsten Heins, the president and chief executive of RIM, did not offer a specific date for the coming line of BlackBerry 10 phones.

OTTAWA — Research in Motion said on Tuesday that its coming line of BlackBerry 10 phones would include the company’s popular BlackBerry Messenger service, a feature still absent on its tablet computers.

But during his presentation to software developers in San Jose, Calf., Thorsten Heins, the president and chief executive of RIM, still did not offer a specific date for what he called “our most important launch ever.” Mr. Heins said, however, that the new phones, which have been delayed twice, will be on sale at some point early next year.

At the meeting, the company displayed the second version of a prototype BlackBerry 10 phone. Outwardly, it appeared little different from a prototype given to developers in May. But the software on the phone demonstrated on Thursday looked much more refined and advanced. In addition to BlackBerry Messenger, it included apps for Facebook, LinkedIn, Twitter and Foursquare, which were integrated with the phone’s calendar, datebook and e-mail apps.

RIM also showed how corporations and governments would be able to segregate their data and app from users’ personal selections and information.

The software linking all the features, Mr. Heins said, will allow users to perform a variety of tasks from a single screen without switching applications.

Although creating new phones and a new operating system has clearly been a struggle for the company, Mr. Heins made no effort to temper expectations.

“We are convinced that the BlackBerry 10 platform will shape the next 10 years as profoundly and significantly as BlackBerry shaped the last 10 years,” he said. Recent demonstrations of the prototype to people at telephone companies and elsewhere, he said, have made “believers out of those who had previously written BlackBerry off.”

Still, the success of the new phones remains to be seen. On Thursday, Mr. Heins will have to face a much less cheery group, RIM’s investors, when he announces the company’s second-quarter results. A Bloomberg survey of 35 analysts found that they expected the company to report that earnings fell 41 percent from the same period last year.

Leading up to Tuesday, some analysts speculated that the total number of BlackBerry users had not grown or had even declined during the quarter, which would have been a first for the company. But Mr. Heins said RIM had counted 80 million BlackBerry users during the quarter, up from 78 million the last time the company reported.

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RIM’s Balsillie and Lazaridis Step Aside

The two men, in developing the innovative device that was the first to reliably deliver e-mail over airwaves, turned a tiny Canadian company into a global electronics giant. But they are stepping aside after disappointing investors and leaving customers wondering whether RIM still has the ability to compete, and perhaps even survive, in the rapidly changing markets for smartphones and tablet computers.

Stiff competition from the Apple iPhone and phones using Google’s Android software drastically eroded RIM’s share of the American smartphone market to about 9 percent in the third quarter of 2011 from nearly half the market two years earlier, according to Canalys, a market research firm based near London. The company’s stock price reflected that by dropping about 75 percent in the last year.

But while Mr. Balsillie and Mr. Lazaridis, who have become the targets of some disgruntled shareholders, are stepping aside, investors and others looking for changes in the company’s strategy may be disappointed.

The company named Thorsten Heins, currently one of RIM’s two chief operating officers, as chief executive. He pledged during an interview on Sunday to follow the strategy Mr. Balsillie and Mr. Lazaridis set in place.

Mr. Heins said he was staking the company’s revival on a new line of phones and a new operating system known as BlackBerry 10. Over the last year, that project has run into a series of delays. The new phones are not expected until the end of 2012, almost five years after the appearance of the first iPhone.

RIM has many other problems, including its PlayBook tablet computer, which lacked crucial features like e-mail when it was introduced; it is now being sold at prices below RIM’s manufacturing cost. But Mr. Heins echoed his predecessors when he said that RIM was, in fact, still a success story.

“We are still very, very convinced that this was the right path to go,” Mr. Heins said. “Now, were there bumps in the road? Sure, but with the kind of growth we had it is not uncommon to hit bumps in the road.”

Barbara Stymiest, a former chief operating officer of the Royal Bank of Canada, will become chairwoman of the company. RIM’s share price rose this month after a report that Ms. Stymiest, who has no background in electronics or consumer products, would become chairwoman.

Mr. Lazaridis, who co-founded RIM with a childhood friend in 1985, will become vice chairman and head a new “innovation committee” of the board. He said in an interview on Sunday that despite his changed status, he intended to remain active in company affairs.

Mr. Balsillie will remain a director. He joined RIM in 1992 and invested $250,000 in the then-struggling company, which was producing a variety of electronic devices including a machine for reading bar codes on motion picture film. While his future role will be more limited, he said on Sunday that he would maintain his stake in the company.

Mr. Heins, who joined RIM about four years ago from Siemens of Germany, needs to prevent additional development missteps in the BlackBerry 10 software project. He will also need to convince investors that the new smartphones will find a receptive audience among buyers in a world increasingly dominated by iPhones and Android-based handsets.

The decision by Mr. Balsillie and Mr. Lazaridis to step aside comes after an agreement RIM reached last year with Northwest and Ethical Investments, a mutual fund company controlled by several Canadian credit unions, to study the relationship between RIM’s directors and its two senior managers.

While a report and recommendations about the company’s governance from a committee of directors, including Ms. Stymiest, was expected to be released shortly, both she and the two former chief executives said the management changes were unrelated.

Mr. Balsillie and Mr. Lazaridis, whose combined holdings rank them among RIM’s largest shareholders, said the pending release of the BlackBerry 10 smartphones, as well as the introduction of an updated version of the company’s aging operating system, made it an ideal time for them to step aside.

Andrew Ross Sorkin and Michael J. de la Merced contributed reporting from New York.

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Asked and Answered | Anthony Roberts: Town Turns to iPads in Cost-Cutting Move

While Apple started selling iPads to the public only 15 months ago, the 1.5-pound tablet computers seem well on their way toward ubiquity. This year, Alaska Airlines began issuing them to pilots to replace the 25 pounds of paper flight manuals they were required to carry on flights. Now, Cornelius, N.C., with a population of about 25,000, has stopped printing meeting agenda packages for town commissioners and has given them iPads instead. Anthony Roberts, the town manager (with Bence Hoyle, the police chief), discusses.

Q Why use iPads for your agendas?

A The short version is, unlike a lot of governments, we try to operate as much as a business as possible. At the end of the day, when you are printing agendas around 200 pages apiece and after the meeting they go into the recycling bin, you say, “Why are we doing it like this?” We have to run 20 agendas at 200 pages per agenda. That’s 4,000 pages just on that one, and that’s not including the time to put it together. And you usually don’t get it right the first time because everything changes. I would think it takes over eight hours per packet.

(Chief Hoyle cuts in) And the Police Department would actually deliver it to the board members to make sure they got it and had time to study it.

(Mr. Roberts continues) We see it as a money-saving measure. We see it as saving our taxpayers money.

Q Is Apple giving the town a discount?

A No, we don’t have a deal for using the iPad. We may get a quantity discount from Best Buy. We’re not even an ant in the bucket to Apple. At the end of the day, we might not have but 20. If we put them in our police cars, O.K., we might have 100, but still, that’s not even a grain of sand on the beach.

Q Which town officials get an iPad and how much has it all cost?

A We’ve got 16, so multiply by $500. What’s that? $8,000. So the department heads all get one, the mayor, board members, the town clerk, police chief, the finance director and there are two I.T. guys.

Q You wouldn’t be doing this if you weren’t saving some money. How much are you looking at?

A We’re going to track the savings. We think about a year-and-a-half payback, max. [He said that estimate was based on what the town expected to save in paper, copying costs, personnel and other related items.]

Q How do we know that when the commissioners have their heads bent over their iPads during board meetings that they’re diligently perusing agenda items and not using catapulting birds to kill hapless pigs?

A (Laughter) The town owns the iPads. At the end of the day, it’s ours. We have a policy you’re not supposed to be looking at undesirable sites. I don’t think the commissioners would do that. (Laughs again.)

Q At the risk of making this sound like too much of an advertisement, do you know any other stories about how this product has saved Cornelius?

A Chief Hoyle: Last night, I was on my iPad and I accidentally hit the wrong button and pulled up a couple of webcams at local parks, and I saw a suspicious person step out and walk toward the amphitheater. I immediately called up the e-mail and e-mailed in and watched our guys go out there. He said he was just walking around. It was 11 at night. The park closes at dusk. He ended up getting a traffic citation for not having a registration. Another thing is our supervisors can read all the reports immediately.

Q Sounds like you guys have adapted to this technology pretty well.

A Yeah, maybe Apple needs to come hire us. (Laughter.)

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