RIM co-CEO James Balsillie says he isn't swayed by Apple's latest iPhone. "We know where we're headed," he says.

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James Balsillie, ice-hockey fanatic and co-chief executive officer of Research In Motion (RIM), quit playing with employees after he noticed they weren’t hitting him as hard as others.

“Who enjoys that?” asks Balsillie, 47, who has run the maker of the BlackBerry handheld e-mail device since 1992. “The guys I play with are brutal.”

Apple CEO Steve Jobs dealt RIM a powerful blow earlier this month with the introduction of the new iPhone. Apple sold 1 million iPhone 3Gs in the three days after they went on sale July 11, stealing potential BlackBerry customers and contributing to a 31 percent drop in RIM’s stock from a record $148.13 in June. Balsillie says his strategy isn’t swayed.

The plans include boosting advertising spending, hiring more engineers and accelerating product introductions, starting with the BlackBerry Bold, which is coming in the next few months. Balsillie says companies will continue to pick the BlackBerry because the e-mail service is more reliable and the keyboard is better for business users.

“We know where we’re headed,” Balsillie said in an hourlong interview at the company’s headquarters in Waterloo, Ontario. “We’ve got all the growth we can handle.”

The stock will rise to more than $170 within a year, according to the average of 20 analysts’ estimates, from a low of $101.86 earlier this month. The stock dropped after a profit forecast in June missed analysts’ estimates because of higher spending to combat Cupertino, Calif.-based Apple’s iPhone 3G, which runs on faster wireless networks than most BlackBerrys. The decline wiped out about $26.1 billion of market value.

BlackBerry optimism

“My enthusiasm for this stock has not diminished,” said Tony Carbone, an analyst at RCM Capital Management, in San Francisco, which manages $125 billion, including RIM shares. “They can gain significant share.”

More than two-thirds of analysts recommend buying RIM, according to data compiled by Bloomberg.

The BlackBerry Bold, which works on faster networks, will bring in 15 percent of revenue and earnings in the six months ending in February, or $1.12 billion and 46 cents a share, said Peter Misek, an analyst at Canaccord Adams in Toronto. The U.S. market for e-mail phones is growing 85 percent a year, according to research firm IDC in Framingham, Mass.

Balsillie’s opportunity

“Our job is to fully capitalize on the opportunity before us,” says Balsillie, leaning back in his chair.

There’s a stuffed beaver on his desk, and two electric guitars hang on the walls. One is signed by Eddie Van Halen, who played at a company party last year.

Neighboring meeting rooms are named after hockey greats, including Wayne Gretzky and Bobby Orr.

Outside, more parking spaces are being laid out to accommodate a work force that surged to 9,000 this year from about 100 a decade ago. BMWs, Lexuses and an Aston Martin sit in the sun alongside the four-story buildings. The BlackBerry’s success has lifted the company’s stock roughly fiftyfold in the past six years.

The additional spending will boost sales of the Bold, says Joseph Parnes, president of Baltimore-based Technomart Investment Advisors. He predicted the subprime mortgage rout, betting against lenders, including American Home Mortgage Investment Corp., in 2007.

“That’s how stocks of this nature will make new highs,” Parnes said. “This is an opportunity to keep buying.”

iPhone could win

Not everyone sees the BlackBerry continuing to gain. The iPhone will attract business users wanting a device that combines corporate e-mail with video, music and Internet functions, said Roger Entner, an analyst at Nielsen IAG in New York. He estimates 15 percent of the iPhone’s roughly 7 million users are business customers. More than half of the 16 million BlackBerry users are corporate customers.

“BlackBerry still has the lead when it comes to the very narrowly defined segment of business e-mail,” Entner said. “With everything else, the iPhone has a huge lead.”

Balsillie says the Bold and other devices will lure more consumers with improved video and Internet functions. The company is also adding a service that lets customers answer office lines and make calls on the move that appear as if they’re being made from the office.

“We’re trying to get people to say, ‘What is that?’ and ‘I want one of those,’ ” says founder and co-CEO Mike Lazaridis, 47, as he plays a clip of the film “Speed Racer” on his Bold.

New inspiration

Lazaridis said he hired designers who will take inspiration from fine watches and jewelry to extend the BlackBerry’s appeal beyond people who simply want reliable e-mail. As he speaks, dozens of engineers in white coats are building prototypes at a nearby plant.

Even though analysts expect an iPhone-like touch-screen version to be among those, Balsillie says there’s no need to copy competitors. Just like in ice hockey, Balsillie prefers to take the lead, not follow.

“I play offense,” Balsillie says. “There’s no glory in defense.”