RIMs BlackBerry taking hits from Apple iPhone 3G

According to Charlie Wolf, an analyst at Needham & Co, Research In Motion’s strength within the consumer market “is bound to come under siege because of the iPhone.” Thus Wolf lowered his 2008 earnings estimate for Research In Motion from $4.05 a share down to $3.70 a share, and also reduced his outlook to profit from $6.25 per share down to $4.80.

Research In Motion recovered from earlier loses by almost 5% a rise of $5.15 to close at $111 while Apple continue to rise $3.17 per share to close at $172.81.

Wolf states that up until the new Apple iPhone came out much of RIM’s BlackBerry success was due to lack of compelling offerings from rivals for consumers. He points out that BlackBerry’s growth rates over the past two years showing how easy RIM claimed the smartphone sector for itself.

The introduction of RIM’s BlackBerry Pearl mobile phone converted even more which helped RIM turn back efforts from Samsung and Motorola. However with the arrival of the Apple iPhone 3G, Wolf says “the days of no competition are over.”

Source — marketwatch


5 thoughts on “RIMs BlackBerry taking hits from Apple iPhone 3G”

  1. iPhoneThee says:

    Wow – it seems the analyst in question is predicting a pretty massive decline in RIM all due to Apple? A bit presumptive I think. Right now the iPhone is competition for RIM in the same way MacBooks are competition for Microsoft. i.e. not so much that it is painful or even all that noticeable.

    Even with all the “iPhone is awesome” reviews the competition will be in the consumer gadget market, which Apple will continue to “dominate” in the way it dominates other consumer markets (laptops, desktops, workstations) i.e. not that much: maybe a core loyal audience of 10% of tech-enthusiast types. The only place Apple really rules is with portable music players where – at least so far – they haven’t had much competition. With a supposed 20% share of “music sales” in the US and a vast customer base of folks still using the pricey iPod$ they got for Xmas over the last few years (assuming they still work), Apple is leveraging iPod and iTunes as hard as it can to sell the iPhone. It seems to be having a pretty muted impact if you ask me. Why only a million units when they launched in 20 countries? (remember we need to adjust analysis to account for that fact that *anything* Apple/jobs launches sells 100’s of thousands units strictly due to the techie/iLifestyle/hipster fashion/fanboy effect.

    But even in the youth “wired lifestyle” consumer sector iPhones are still a pretty expensive geek toy; they don’t have video; the famous “touch screen” is pretty easy to duplicate (cf. OpenMoko Freefunner, RIM Thunder, etc .etc) and with vast numbers of cheaper altermatives are far from the juggernaut people keep talking about.

    Apple’s boilerplate press release tag line goes something like this: “Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone.”

    Read that several times and think of Apple’s market share in “personal computers”, “professional applications”, etc. Just because Apple is a profitable company and makes products that appeal to part of the market doesn’t mean the competition for RIM is going to be all that ferocious or eat into RIM’s core business market any time soon.

  2. roku says:

    The earlier poster ‘iphonethee’ is clearly delusional. Why “only 1 million” ? LOL… which other vendor has ever sold 1 million units in 3 days. RIM is available in 80 countries and has been around forever and it has ONLY 14 million subscribers.

    Whatever the facts maybe, there are always gonna be the haters who are going to live in denial. The funny part is where he points to OpenMoko and Thunder as competitors in the touchscreen space. How muh more ridiculous can it get when you are comparing the iphone to products that don’t exist. There are no phones being sold with OPenMoko currently. And the thunder is still a RIMM story which hasn’t become a reality and we all know that its gonna go the “instinct” and “HTC diamond” way… that is nobody is gonna care.

  3. iPhoneThee says:

    Well there’s been a fair amout of delusion about APPL for a while now and I think selling **1 million units** over 3 days is good but it’s just not that overwhelmingly impressive. Apple’s market share for advanced phones actually declined in the last quarter so perhaps this will bring them back on track.

    I think you’re mixed up about numbers: yes RIM sells subscription services (they have about 15 million users – increased by around 2 million over the last quarter). They also sell phones. How many? Well, of the 30 million or so phones sold in the US in first quarter of 2008 (a decline from 2007) they sold 5% – that’s more than 1 million in the US alone and they operate in 130 countries. So RIM has sold a lot of phones – more than their subscriber base – somewhere over 20 million units so far. And these are almost all high end smart phone handsets to business people they haven’t been in the mass market for very long.

    That makes Apple’s sales look a lot less like a tidal wave of revolution to me. Especially since Nokia sold about 15 million phones last quarter and about 15 million the quarter before that too. Once it goes mainstream it’ll be pretty easy to turn on “push email” to the existing 1.5 billion “not smart” phone sets out there – and Apple will be where it always is: positioned as a deluxe cool elite technology with ~ 2% of the market. RIM has a better chance than APPL to grow it’s market share as a mass mobile handset.

    Of course so does Nokia and they’re bigger.

  4. iPhoneThee says:

    Yes Apple sold 1 million phones … in 20 countries. but it’s fair to discount that by 100-200K Apple fanatics. It’s just *not* the tidal wave everyone is talking about.

    Despite declining sales in Q1 across the sector (except RIM) RIM’s market share for smart phones expanded from 40 to ~45% *without* the bold, the thunder, or any other soon to be launched units that sell for half the price of the iPhone. The iPhone launch is being used by short sellers to smack RIM, take profit and buy back in for another ride up the share price pole. Most of the story has no real business analysis merit at.

    btw OpenMoko based phones are shipping – I find the touch screen is nicer than the iPhone since it doesn’t rub against my face while I’m talking.

  5. Phuture Phones says:

    the touch screen versus keyboard debate is going to end soon. Call me a whiner: I don’t think Apple’s UI is not that great, but the touchscreen is here to stay. RIM’s idea that the QWERTY keyboard is a killer feature is outdated.

    The Blackberry’s keyboard was great for the early days of mobile messaging but guess what? Phones never had keyboards – they had number pads. People switching from a phone to a “smartphone” don’t *need* the keyboard – a software touchscreen keyboard is a bonus. The only people who do are the crackberry adicts. The other 2 billion phone users who “upgrade” will get a touchscreen. The technology is finicky and fragile now but it’s going to get better and better.

    It’s an over correct so say buy RIM shares now ’cause it’ cheap, they have good engineers and they’ll be around for a good while yet. But don’t diss Apple’s technology. It’s true they always end up being in the weird micro market niche of cool-not-nerdie techies but they are leading the way. So they’ll never own any market (still, 10-15% of laptop sales isn’t bad) but Apple is in a lot of different yet connected markets these days. So wait for it to go down a bit and buy APPL shares too 🙂

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