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RIM is earning a reputation as the successor to Microsoft as the "biggest loser" in smartphone sales

The most recent survey by the NPD Group on U.S. smartphone sales offered few surprises as recent winners and losers for the most part furthered their respective streaks.  The winners are, of course Apple, Inc. (AAPL) and Google Inc. (GOOG), while the losers are Canadian BlackBerry maker, Research In Motion, Ltd. (TSE:RIM).  Windows Phone 7 manufacturer Microsoft Corp. (MSFT), a perennial loser, was about the only party reverse its recent trend, posting a small growth.

I. Four Out of Every Five U.S. Smartphones are an Android or an Apple

For Apple and Google, they're seeing their individual growth more or less flat-line for this year, but this growth is still substantially elevated, when compared to 2010 numbers.  Google's Android market share remained at 53 percent -- the same number the NPD group reported for Q2 2011, and a significantly higher level than Jan.-Oct. 2010's ~21 percent which NPD reported last year.  Likewise Apple grew from 21 percent to 29 percent.

RIM continues its humiliating fall, reaching a mere 10 percent of the U.S. market, down from a year ago when it held a quarter of it.  On a quarterly basis RIM captured a miserable 8 percent of U.S. smartphone sales in Q3 2011.  NPD analyst Ross Rubin, the report's author, pointed out that in the close to five years between Q2 2006 to Q3 2011, RIM has gone from owning 50 percent of the smartphone market to owning a sixth of that.

Fortune in 2009 quoted RIM co-CEO Mike Lazaridis as saying, "sometimes we have to put the brakes on.  We’ve shown that we can handle annual 100% growth. I’m not sure we could handle more than that."

RIM co-CEO Jim Balsillie
RIM co-CEO Jim Balsillie may be all laughs and grins, but his company's increasingly abysmal U.S. sales outlook has given investors little to crack a smile about. [Image Source: Reuters]

Well RIM has certainly put the brakes on -- in fact it's put the vehicle in reverse and is backing up towards a cliff leaving investors yelling in the back seat.

II. Microsoft Performance is Slightly Better Than Last Time

For Microsoft the news was considerably better.  Unlike RIM, which has no "plan B", Microsoft is sitting on a pile of cash (some of it from Android) and isn't afraid of throwing it at the smartphone market.  And Microsoft has apparently passed on the tradition of standards bearer of the biggest losers side of the list to RIM.

While it still has a long, long ways to go to regain even a fifth of its Q2 2007 peak 25 percent market share, Microsoft did manage to reach a 2 percent market share with its Windows Phone platform -- up from 1 percent in August.

Looking ahead, Mr. Rubin argues that Nokia's Oyj. (HEL:NOK1Vstrong recent partnership with Microsoft will have little immediate effect on the U.S. market because, he says, they have to "build from almost nothing."

An even bigger comeback story is the performance by Google-subsidiary Motorola, who rose from 1 percent of the market in 2009, to 12.1 percent today.

Ultimately, it remains to be seen in the long run whether Microsoft and Nokia will have enough fuel left in the tank to achieve an equivalent level of comeback success as Motorola.  But signs of Microsoft's general direction should become more evident by next year, Mr. Rubin says.

III. RIM Could Follow in Palm's Footsteps if it Doesn't Beware

A shift for RIM will be even more noticeable, as continued declines could push it to be sold or at least commit to serious global cutbacks.  RIM has brought some of its trouble on itself.  After announcing that its next generation smartphone OS would be dubbed BBX-- a trademark clearly registered and actively used by a separate software company in the U.S for years, RIM was sued and ordered to cease using the name.  

Now RIM is offering customers the moniker "BlackBerry 10".  The underlying OS looks promising -- barring a glaring security issue that uncharacteristically presented itself in QNX, BB7's parent OS.  That said, the naming issues might serve to distract and confuse some would-be buyers.

To its credit, RIM has always managed to drawn strong sales thanks its IT-strength software, allowing it to pinch on hardware costs and post some almost Apple-esque profits.  But even that may be coming to the end.  From Q1 to Q3, RIM saw its profits fall to a third of their previous levels down to $329M USD from $934M USD.  A quarter or two more like that and RIM could find itself in the red.

Mr. Rubin opines, "The competitive landscape for smartphones, which has been reshaped by Apple and Google, has ultimately forced every major handset provider through a major transition.  For many of them, 2012 will be a critical year in assessing how effective their responses have been."

While he did not mention it, one of the biggest smartphone stories of 2011, aside from the Nokia-Microsoft affair was Hewlett-Packard Company's (HPQ) decision to kill sales of webOS smartphones, effectively striking a death blow to the remains of Palm, Inc. -- a firm that had close to 20 years of mobile device experience and almost 10 years of smartphone sales.  
Palm RIP
The smartphone event of 2011 may have been the death of HP's ex-Palm unit, a veteran core that had stuck it out for almost 20 years. [Image Source: Gigaom]

Once viewed as the chief competitor to Apple, Palms' sales plunged prompting a 2010 fire sale to HP for $1.2B USD. From there things went from bad to worse, with HP's deteriorating management driving the struggling unit to its grave.

Source: NPD Group

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The difference between RIM and PALM
By Samus on 12/14/2011 5:19:30 PM , Rating: 3
Palm reinvented themselves with WebOS in order to survive. It's plausable to say they would have if HP hadn't completely fucked them over.

RIM has been using the same core OS for 10 years and just keeps making it look pretty, a move that is completely backfiring on their loyal customers who want a simple interface. There is QNX on their Playbook, but even RIM says there are no plans to bring that to their phones due to security, performance, interface and compatibility. At least it can run Android apps at half-speed...but it can't even send email! A Blackberry product that CAN'T EMAIL? Corporate suicide at its finest.

RE: The difference between RIM and PALM
By Solandri on 12/14/2011 6:00:46 PM , Rating: 4
In broader terms, I think Palm and RIM are very similar and stumbling on the same issue. Palm OS started off as a pocket organizer. Palm then tried and failed to convert it into a general-purpose OS.

Likewise, the Blackberry started off as a pocket email device. RIM has then been trying to convert it into a general-purpose OS, but I just don't think they have the technical expertise to pull it off.

The overall convergence if PDA, phone, portable gaming, and eventually general computing into one device heavily favors general-purpose OSes. Which gives iOS and Android a big advantage. (In theory, Windows Mobile should be strong too. But I think Microsoft has tried to cram too much of desktop Windows into Windows Mobile, resulting in an interface which was clumsy on a phone/PDA. Windows Phone seems to be much better, but it's too little too late.)

RE: The difference between RIM and PALM
By sprockkets on 12/14/2011 6:39:10 PM , Rating: 2
The palm we knew was completely stupid. The original palm people, seeing that they were no longer in control, formed Handspring, where they put in expandable storage and later the phone version of the palm os. The original palm, stale as ever, bought them back to get back into the smart phone game.

What then?

1. Started selling WinMob. The treo 700 was the worst wm5 device ever. All it did was increase MS's share at Palmos' expense.
2. Didn't listen to customers. We clamored for wifi, a large screen, and not the crappy keyboard. Did they listen? No.

People think apple is awesome, but that's not saying much when your competition is inept.

By retrospooty on 12/15/2011 7:30:29 AM , Rating: 2

I worked for Palm from 2002 to 2008, and I have to say... You are absolutely right. It gets a lot deeper and more detailed, but Palm's issue was that they are basically stupid, at least collectively. Especially on the hardware side.

I have never seen so many smart, well meaning, motivated people get together in a meeting and come up with such bad solutions.

Android vs. iOS
By Argon18 on 12/15/2011 7:48:06 PM , Rating: 2
Funny, I pointed out this exact same fact in an article here about Windows Phone. I said specifically that the smartphone market today was Android vs. iOS and that RIM and Microsoft were irrelevant. The Windows Fone Fanboys all came out of the woodwork to attack me, saying that the new Windows Phone was the greatest thing ever and it would actually succeed. Lol. Sorry Windows Phone Fanboys, you lose. Again.

RE: Android vs. iOS
By TakinYourPoints on 12/15/2011 10:54:36 PM , Rating: 3
It is a shame in any case. Windows Phone 7 is a really good mobile OS, certainly better than Android IMHO. It deserves to compete but cell carriers and hardware companies market the everloving crap out of Android.

RE: Android vs. iOS
By Cheesew1z69 on 12/16/2011 9:26:10 AM , Rating: 2
Thank god opinions are just that...opinions...

My opinions on RIM's dilemma
By amanojaku on 12/14/2011 5:47:26 PM , Rating: 3
1) The phone selection is poor, with only six designs in the US
2) The designs are dated, only the Torch 9850/9860 looks modern
3) Performance has fallen behind, with a jittery interface and slow applications
4) RIM still thinks it's 2005

The fact that RIM makes one of the best TELE-phones means nothing to today's buyer. Even business users are less interested in the audio capabilities of a phone; you make important calls from a land line, where it's quiet, anyway. And RIM can't live by BES alone. The mobile computer is here to stay, and the smartphone is that device, even more so than the tablet. I think RIM needs to do the following:

1) Make three phone styles: a thin candy bar, a touchscreen, and a touchscreen horizontal slider
Note: The Bold, Style, Torch 9800, and Curve should be scrapped
2) Make three or four designs off of each style, or license the OS to other manufacturers
3) Add multiple cores and give graphics more power
4) Target the average consumer, who is using his or her own phone at work now

I say this as a person who used a BlackBerry until this year. Then I switched careers, so I don't need a smartphone now. It's nice charging up my flip phone once a week. :)

Where goeth Pirks?
By W00dmann on 12/15/2011 3:41:36 PM , Rating: 2
Where in the world is Pirks? He has been completely silent of late! I would like to listen to him defend his beloved RIM / Blackberry.

I really do not wish to see an important smartphone competitor go under, but at this point I fear it is inevitable. I give them a maximum of 2 years at this point, at which time they will either be bought out or fold completely.

Pirks, if you're out there, you have ardently defended RIM for years now even as they steadily lose market share. Curious to know your feelings on the subject?

RE: Where goeth Pirks?
By Pirks on 12/18/2011 9:00:00 PM , Rating: 1
What? You want me to reply to a dumb illiterate reporter like Mick who saw RIM handsets only on pictures and thinks BB7 is the next version of the QNX derived smartphone OS? Are you even serious? Jeez, I can't believe people could be THAT dumb. Even dumber than cheesy bitch. And that means a lot!

Well, I'm surprised why retro's not trolling RIM here too. Perhaps he is also ashamed to reply to the level of dumbness and illiteracy that Mick demonstrated here by calling BB7 "the next QNX derived BB OS". I say, Mick is even beyond dumb, I don't know how to call this, super dumb maybe? Seems like he trolls RIM because he's being paid by some Android company like Google or something. He can't be just doing this because of pure stupidity, no way!

By danjw1 on 12/14/2011 5:42:29 PM , Rating: 2
Motorola isn't a subsidiary of Google, yet. Just yesterday we learned that the EU is slowing down the acquisition. Source:

Graphs please
By lennylim on 12/14/2011 9:14:32 PM , Rating: 2
Graphs would be really helpful in showing the growth and change from past years.

By The Raven on 12/16/2011 10:23:55 AM , Rating: 2
It seems 4 out of 5 articles on DT are about Apple or Android

Not hatin'. Just sayin'.

1/2 of Android phones are free
By vision33r on 12/19/2011 12:47:37 PM , Rating: 2
Half of Android phones sold are free with contract. Google makes almost no money on these phones as the carriers make the most from selling dataplans.

Makes these reports meaningless.

Free phones are free.

Stats again?
By EricMartello on 12/14/11, Rating: -1
RE: Stats again?
By its tom hanks on 12/14/2011 4:35:30 PM , Rating: 2
everyone except you is a retard unworthy of life. yay

RE: Stats again?
By Cheesew1z69 on 12/14/2011 4:37:09 PM , Rating: 2
Android which tries hard and fails to emulate IOS
No, no it does not.

RE: Stats again?
By Solandri on 12/14/2011 5:52:30 PM , Rating: 5
The problem here isn't that Android tries to emulate iOS and fails.

The problem is that iOS fans have built up a conspiracy theory in which Android is purportedly trying to emulate iOS. That it "fails" is then interpreted as evidence of Android's inferiority, rather than the theory being wrong.

RE: Stats again?
By EricMartello on 12/15/11, Rating: -1
RE: Stats again?
By retrospooty on 12/15/2011 7:18:36 AM , Rating: 2
In other words, the one you own is the best (in your opinion), and then you make wildly innacurate and insulting statements to try and convince others (who exactly) that your decision was the best.

Wounds like we have a new Pirks. Superior, judgemental, insulting, fanboyism, total lack of social grace, wrong from the core argument on up... Its all there, you are the whole package.

RE: Stats again?
By Paj on 12/15/2011 7:37:26 AM , Rating: 2
Excellent example. Look at all the widgets on the iOS screen! Clearly Android ripped them off.

Oh, wait.

RE: Stats again?
By EricMartello on 12/17/2011 10:22:16 PM , Rating: 1
Neither android nor IOS have an efficient mobile interface. They're both narrow-sighted attempts at making the desktop paradigm work on a small mobile screen. It fails, pure and simple.

Windows Phone is the best mobile OS and arguably the only TRUE mobile OS available today. It's the only one designed from the ground up to maximize the utility and function of a mobile device while also providing a aesthetically-pleasing yet minimalistic interface.

RE: Stats again?
By Cheesew1z69 on 12/15/2011 8:14:26 AM , Rating: 2
First of all, anroid looks like a cheapened down version of IOS. It's almost a copy and past wannabe...just as lame as a linux with a MacOS "skin".
No, no it's not.

RE: Stats again?
By AlvinCool on 12/14/2011 4:42:03 PM , Rating: 1
Steve? Is that you Steve???

What? Still mad because Apple was a better operating system but Windows was adopted universally. Miffed someone else used linux to launch a thin device. Comon Steve, your book is a best seller, give it up.

RE: Stats again?
By seamonkey79 on 12/14/2011 4:42:12 PM , Rating: 2
Many Android phones cost about the same as an iPhone, all the Android phones that people I know have 'cost' as much as an iPhone...

only we're smarter and buy them from Amazon for a penny, and spend the other $400+ on a tablet :-D

RE: Stats again?
By xti on 12/14/2011 4:49:35 PM , Rating: 1
hopefully an ipad2.

RE: Stats again?
By jimbojimbo on 12/16/2011 3:47:24 PM , Rating: 2
$400 for an ipad2? Refurbished and on sale maybe. Those things are way too expensive but hey as long as you suckers are buying they'll keep ripping you off.

RE: Stats again?
By Breathless on 12/14/11, Rating: 0
RE: Stats again?
By MechanicalTechie on 12/14/2011 5:16:02 PM , Rating: 1
Apple fan boy strikes again.. I wonder when Mr Tony will make an appearance and spout his iTool garbage

Why do these Fan boys get so upset? I mean it's just a product... it’s crazy that someone can get so personally attached to a company

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