RIM’s America problem could go international

[the_sleuth]

I have said it before, Android OS means the commoditization of the smartphone. All phones will be smartphones in the near future:

RIM’s America problem could go international

Matt Hartley Jan 27, 2012 – 6:29 PM ET

The most powerful man in the world, President Barack Obama, is a loyal BlackBerry fan. Its his countrymen that are causing headaches for Research In Motion Ltd.

Canada’s top technology company has an American problem. Namely, that the country which once formed the epicentre of RIM’s corporate and consumer power base has seemingly turned its back on the Waterloo, Ont.-based BlackBerry maker, in favour of Apple Inc.’s iPhone and smartphones running Google Inc.’s Android software.

Roll back the clocks four years and RIM’s relationship with the U.S. was decidedly different. Not only were RIM’s BlackBerrys a staple among power brokers on Wall Street and the favourite tool of Washington insiders, but RIM’s surging sales and rising profits made the company a corporate darling among U.S. investors on a level few Canadian companies have ever enjoyed.

Fast forward to today, and RIM’s American dream has become a nightmare. RIM’s share of the smartphone market is less than half of what it was less than two years ago. RIM’s shares are down 75% since the beginning of 2011, developers are turning their backs and the tech blogosphere has made the BlackBerry into a perpetual punchline.

RIM has acknowledged it needs to perform better in the United States, one of newly appointed chief executive Thorsten Heins’ first orders of business to hire a new chief marketer to reinvigorate the BlackBerry brand in the U.S. At the same time it is reminding investors at every turn that it is continuing to see substantial growth in international markets.

But are the U.S. failings the canary in the coalmine for RIM, a harbinger of impending international doom?

RIM’s share of the U.S. smartphone market has plummeted from more than 42% in February of 2010, to just 16.6% at the end of November 2011, according to data from market research firm comScore Inc. That’s a 62% drop in 21 months.

According to documents RIM filed with the Securities and Exchange Commission in the United States, RIM’s U.S. revenue has fallen 44% so far this year.

Meanwhile, RIM’s international revenue from outside its biggest markets (the U.S., Canada and the United Kingdom) now accounts for about 58% of its total revenue (US$8.24-billion), up from 39% (US$5.57-billion) last year.

The numbers would suggest RIM’s losses in the U.S. can be easily replaced by gains in places like India, Indonesia and Venezuela. But there are recent signs that RIM’s ugly picture in the United States may be mirrored in other parts of the world, as Samsung Electronics Co. Ltd. and other Android manufacturers flood markets that were once RIM strongholds with new devices.

In Latin America, a market RIM’s leaders have long pointed to as proof of its international growth, the company has seen its share of the smartphone market fall from 47.8% in the first quarter of 2011 to just 25.6% at the end of the third quarter, according to data from IDC. At the same time, Samsung’s share of the market has more than doubled from about 10% in Q1 to 23% in Q3.

Even in markets such as Indonesia, where the recent launch of a new BlackBerry caused riots among anxious consumers, RIM is feeling the growing spectre of Android. RIM’s share of the Indonesian market grew from 40% in Q1 to 46% in Q3 this year, while Samsung and HTC — both heavy Android providers — saw their share of the market triple and double, respectively.

RIM continues to lead the Canadian smartphone market with about 36% of the market, according to data from comScore.

Because the United States is seen as one of the world’s most advanced smartphone markets, some analysts view it as a trend setter, one that could provide a snapshot of what other, developing markets may look like in a few years. RIM’s steady rise and sudden fall in the U.S. market could be duplicated in other markets as Apple rolls the iPhone out to more countries and Android continues its international expansion.

RIM’s America problem could go international | FP Tech Desk | Financial Post

[berklon]

This article is spot on, even if it's a little too obvious.

You fall further and further behind the competition with the same old devices year after year, then the market can't ignore it and will just move onto something better.

The company I work for is a global firm that initially used only BB devices, but that's changed and now Apple and Android devices are allowed. We're seeing more and more people switching from BB to Apple and Android devices every day in all of our offices across the globe.

I was floored when I heard QNX phones would be released Q1 2012 and thought RIM should do whatever it took to get it released in Fall 2011 for any chance at saving themselves. But Fall 2012? Really? Ridiculous especially when they've been behind for so long. No excuse for this stupidity. None whatsoever. They deserve what's happening to them right now.

[Superfly_FR]

Yes, there is more competitors ... worldwide.
RIM's position outside the N.A is sit over 2 main reasons :
1/ The affordable price they sell simple but effective devices (for "emerging nations" that doesn't have high speed networks, basically) and offering a free messaging tool aka BBM.
2/ The image of robustness, serious quality and security in large corporations plus the keyboard usage (BBM being third +) in Europe

There are now new pretenders in both, and people likes to embrace novelties.
Androïd -real- rush is year 1 and we have to wait until the usage, in both situations, meets really the customers (persons, company) needs.
So we may say this is a real picture, but have to wait a little more until it gets a significant trend ...

[trelawrence]

Interesting view. Android proliferation is affecting everyone.

[bigtime2]

I have a feeling that as soon as consumer in these deceloping countries start switching to ios/android, it will look like the US. In no time blackberry will be loosing market share.

[trelawrence]

I know that in sub-saharan Africa, a few low-priced GSM handsets could swing things Android's way. It has already started at the Southern tip of the continent.

[mjs416]

Unless Android phone manufacturers really start focusing on economy models and marketing around the world and apple releases an economy phone - i dont see the same dynamic that is occurring in the US to happen around the world for a few reasons...

1) While our economy is in the dumps, the median household income of the average american household is still far above most other countries. This equates to slightly more disposable income.

2) Most overseas countries carriers dont subsidize the cost of the phone and the data packages available are much smaller than what we see in the US.

[Superfly_FR]

Originally Posted by mjs416

[..]
1) While our economy is in the dumps, the median household income of the average american household is still far above most other countries. This equates to slightly more disposable income. [...]

I think RIM's revenues outside N.A is 60% or so ...

[TGR1]

Originally Posted by mjs416

Unless Android phone manufacturers really start focusing on economy models and marketing around the world and apple releases an economy phone - i dont see the same dynamic that is occurring in the US to happen around the world for a few reasons...

1) While our economy is in the dumps, the median household income of the average american household is still far above most other countries. This equates to slightly more disposable income.

2) Most overseas countries carriers dont subsidize the cost of the phone and the data packages available are much smaller than what we see in the US.

BBs are actually not low-end devices in terms of pricing. RIM still has very good ASPs on their handsets, better than most Android vendors IIRC. Having said that, the sheer number of Androids and possibly the re-emergence of lower-end Nokias will be a challenge.

[berklon]

Once the ball starts rolling (it already has), it'll be hard to stop.

The majority of people that leave BB won't come back - even to BB10. They won't give up all that Apple and Android provides them to move back to a BB with a very small "ecosystem" - especially when many of their friends/family are no longer on BBM.

What incentive will there be to move back? E-mail? BBM? The competition have their equivalents.

Basically RIM's strategy will be concentrated around trying to keep existing customers from leaving, as there's very little they can do to attract new customers.

BB10 in Fall 2012 will be their death.

[ealvnv]

You guys are forgetting the economic factor that plays a role in developing countries where carries sell BlackBerry devices at lower costs then any other vendors due to the subsidized prices they can offer. Most carriers offer social plans where BBM,Facebook and twitter access are included so people don't have to pay for text messaging plans because of BBM.

There are no similar plans for android or iphone.
Add the compression technology rim uses for data and you see why in these countries bb is more popular and the carriers push bb more then any other device when it comes to smartphones.

[anthogag]

RIM still has the playbook to attract attention until OS10 devices are launched

OS2 is coming next month, it will make the playbook much more attractive to business as PIM integration is looking quite good, and business is looking to adopt more tablets this year. And the playbook is perfectly portable and powerful and user-friendly.

And then the higher spec 3G+ tablet is coming-out in April. The first half of 2012 might be the 'year of the tablet'

Price is extremely important...RIM needs to make them more affordable when compared to competitors.

And then their are the new services that will roll-out this year (Ex. movies, cloud computing, media sharing,...)

Marketing has to make sure this stuff is getting out. Currently, the phones don't sell themselves in carrier stores...competitor phones are very attractive at first glance

[Reubechs]

Plausible points. While BlackBerry is highly popular outside the U.S., they aren't as cheap as some the Android handsets starting to appear in some markets. So if in countries where carriers don't subsidize the cost, Android might get a little prolific just by being the cheap alternative.

And whomever said "the same old phones", wake up.

[Doc Z]

This is what I've been saying for months now. The ridiculous defense of RIM by pointing to their dominance in international markets is a terrible gauge of success. People say yes US market share is dropping like a rock but it's ok, we still got the rest of the world! Wrong. The same trend will follow as Apple/Android spreads to the world.

[trelawrence]

It's a scary thought. Nokia is waiting in the wings too.

ETA: http://www.extremetech.com/mobile/93...arge-in-africa