Print 30 comment(s) - last by vision33r.. on Dec 19 at 12:47 PM

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

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

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.

"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer

Latest Headlines
Inspiron Laptops & 2-in-1 PCs
September 25, 2016, 9:00 AM
The Samsung Galaxy S7
September 14, 2016, 6:00 AM
Apple Watch 2 – Coming September 7th
September 3, 2016, 6:30 AM
Apple says “See you on the 7th.”
September 1, 2016, 6:30 AM

Most Popular Articles5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
Laptop or Tablet - Which Do You Prefer?
September 20, 2016, 6:32 AM
Update: Samsung Exchange Program Now in Progress
September 20, 2016, 5:30 AM
Smartphone Screen Protectors – What To Look For
September 21, 2016, 9:33 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki