Canadian Press article on RIM

Growth in North America key for RIM as Apple, Android phones appeal to consumers
at 17:09 on June 23, 2010, EDT.
LuAnn LaSalle, The Canadian Press
Share|MONTREAL - It's not just Apple's iPhone that's threatening the strength of the BlackBerry in North America, but the growing popularity of Android smartphones among consumers, analysts say.

North American consumers are still key for Research In Motion (TSX:RIM), even though the BlackBerry maker is expected to post continued international growth on Thursday when it releases its first-quarter results.

"There's more competition on the smartphone front in North America than there ever has been," said IDC senior analyst Kevin Restivo.

Restivo said RIM and Apple were still No. 1 and 2 in North America, but that gap is narrowing and the appeal of Android-powered smartphones is growing.

"Android and the devices that Google's partners are making have very quickly become hot commodities in the United States," Restivo said from Toronto.

HTC and Motorola are among handset makers helping to popularize Google's open-source Android operating system in their smartphones.

But, RIM has made the Asia-Pacific region and Latin America priorities as those regions are quickly adopting smartphones, said Restivo, of IDC's worldwide mobile phone tracker unit.

The average analyst estimate for RIM's earnings per share for the company's first quarter of 2011 is US$1.33 and revenues are expected to be US$4.3 billion, according to those surveyed by Thomson Reuters.

Technology analyst Nick Agostino said he expects that RIM has likely lost consumer market share in North America and that trend will eventually spill beyond its borders.

"Where Android and iPhone and RIM are really starting to **** heads is in North America and that's going to spread to a more international level," Agostino of Toronto's Mackie Research Capital.

He said the North American market is important because it's considered the home of smartphone adoption. Smartphones allow users to surf the Internet, watch video, listen to music and install applications that let them do everything from find restaurants to read books.

"The North American consumer tends to be more high end and, therefore, it gives you a sense of who is going to control the high end of the market."

But, Agostino said, he believes the Waterloo, Ont.,-based company will be able to maintain its share of the business market in Canada and the United States.

Scotia Capital analyst Gus Papageorgiou said in a note to clients he's looking for RIM to have revenues of US$4.4 billion and earnings of US$1.34 per share.

"The Street is clearly concerned about RIM's competitive position and future in the smartphone market, concerns we believe are almost entirely without merit," he wrote in a recent note.

RIM co-CEO Jim Balsillie has said RIM will continue its global expansion, but still has to compete in North America, a market he has described as "hotly contested.''

To appeal to more consumers, RIM is expected to introduce a touchscreen phone with a pullout keyboard. It is also rumoured to be working on a tablet device that would work with a BlackBerry.

Citi Group analyst Jim Suva said RIM will be challenged in both the consumer and business market, in which RIM is known for its secure delivery of email.

"While RIM�s growth has been fuelled by international and consumer growth, we see increasing challenges on these fronts as Android adoption continues at brisk pace," he wrote in a note.

Suva noted RIM's North American market share has declined to 41 per cent since the launch of Motorola's Android device, Droid, on U.S. carrier Verizon.

However, Restivo said, concerns about RIM's growth are largely unfounded.

"RIM's problem is that it's No. 1. Everyone looks to see the top dog falter in some way, shape or form."

However, Restivo said, concerns about RIM's growth are largely unfounded.

"RIM's problem is that it's No. 1. Everyone looks to see the top dog falter in some way, shape or form."

The attraction of the shiny new phones will draw some to the other guy. But, we are still expecting about 5 Million net new BlackBerry subscribers this quarter.

Originally Posted by Reed McLay

The attraction of the shiny new phones will draw some to the other guy. But, we are still expecting about 5 Million net new BlackBerry subscribers this quarter.

"We"? Do you work for RIM or have any special connection to them besides paying for one of their devices? :D

My use of "We", is from the perspective of the CrackBerry community.

And yes, I have paid for that privlidge, twice now.

Ah I see. That means I am part of them as well. Good to know. Now only if they would listen to me. :cool:

Its really too bad that RIM continues to make crappy devices and not listen to the public about what it wants! Maybe then they wouldn't be shedding so many customers? AT&T has the iPhone, so why do they need the Slider? Give the Slider to Big Red to make up for that stupid Motorola Star-Tac Clamshell abomination. Or better yet, where is the damn Storm 3!

Posted from my CrackBerry at wapforums.crackberry.com

Originally Posted by KodyShadow

"The North American consumer tends to be more high end and, therefore, it gives you a sense of who is going to control the high end of the market."

This comment truly made me laugh. Have these morons not looked at the
phones or smartphones in the Asian markets? There are "dumbphones" in
the Asian marketplace that make the best of what RIM, iPhone and Android
offer seem archaic.

Originally Posted by amazinglygraceless

This comment truly made me laugh. Have these morons not looked at the
phones or smartphones in the Asian markets? There are "dumbphones" in
the Asian marketplace that make the best of what RIM, iPhone and Android
offer seem archaic.

Yes, anyone who's been to Japan knows that like nothing else. Even Chinese low end, eh, sorry AG, "feature phones" to use a term I saw at Rogers, are fast outstripping what we would consider a feature phone and moving into the smartphone market.

And yes I had a good chuckle when I saw feature phone at the kiosk.

Originally Posted by KodyShadow

It's not just Apple's iPhone that's threatening the strength of the BlackBerry in North America, but the growing popularity of Android smartphones among consumers, analysts say.

Is it not the other way around?!
Everyone wants to sell as many phones as Apple does?! :confused:
Right now RIM is copying Apple in some parts - just look at OS6

I'm sure most people are unsurprised at this. At this point all iPhone versions have set the standard for North American smartphones. Now RIM has to substantially exceed its feature set, development ease and overall 'feel' with the Blackberry to reverse their marketshare losses. And it'll take a lot more work on top of what we've seen in OS 6.0 for that to happen.

You can see the effects already. The average selling price of a Blackberry has dropped consistently since the iPhone's release, and now the flagship Blackberry Bold is being offered at $0 (with rebate) in Canada. Hardly a healthy sign for RIM when your flagship device has to be practically given away.

Originally Posted by avt123

Ah I see. That means I am part of them as well. Good to know. Now only if they would listen to me. :cool:

Me 3. However, it's good to know the stock price doesn't fluctuate based on the arm chair CEOs in this forum. :D

Originally Posted by Slash82

Is it not the other way around?!
Everyone wants to sell as many phones as Apple does?! :confused:
Right now RIM is copying Apple in some parts - just look at OS6

Competition is great for the consumer, more choices. For the manufacturer, a pizza pie can only be split into so many slices.

Originally Posted by allengeorge

I'm sure most people are unsurprised at this. At this point all iPhone versions have set the standard for North American smartphones. Now RIM has to substantially exceed its feature set, development ease and overall 'feel' with the Blackberry to reverse their marketshare losses. And it'll take a lot more work on top of what we've seen in OS 6.0 for that to happen.

You can see the effects already. The average selling price of a Blackberry has dropped consistently since the iPhone's release, and now the flagship Blackberry Bold is being offered at $0 (with rebate) in Canada. Hardly a healthy sign for RIM when your flagship device has to be practically given away.

If you are talking the consumer market, I somewhat agree. iphone has had several large gaps in it's functionality. Some people don't care, some do. For the corporate market, no other company can support a BES type infrastructure, a huge win for RIM.

I don't use my phone as a media center and I'm not an apple fan, not that they care, their stock is doing okay and they have a lot of cash...of course they don't pay dividends either. (If and when in the future I jump ship it will be DROID....I'm glad there are choices.:p)

As an aside, RIM (unlike Apple) also makes money on the bandwidth, that is why the price of phones is somewhat flexible, which is why your conclusion is incorrect.

Interesting article, I too think concern's about Rim's demise are grossly exaggerated, my only concern revolve's around the quality control department, earning's per share of $1.34, think what the figure could have been had they not had so many problem's on the latest release's. That said, today I'm upgrading one of my line's to a 9650.

I agree with the last part of the article that everyone wants to see the top dog fall. Apple fanatics are always talking about the so called end of RIM but on the otherhand popularity has the same effect. When a flaw is found on the iPhone BB fanatics will rush over to their forum and talk crap. RIM does have the lead in the market but the gap is getting smaller. As a big BB fan I hope to see RIM come out with some quality stuff to spur on even more competition.

Posted from my CrackBerry at wapforums.crackberry.com

RIM earnings: International sales to shine, but Blackberry losing grip in U.S. | ZDNet

Basically RIM is positioning themselves as a low cost solution. It is working great globally as they undercut Nokia, but it is not working in NA. Not Sure if RIM is going to take a different approach in NA, or ultimately split the business and consumer offerings. This article points RIM losing a lot of Market Share in NA, and that they need to do something. Of course all they have coming out is the Slider and OS 6, and that just won't compete with IP 4 and the latest Android devices (Galaxy S, Moto Droid X, HTC Evo)

Again, I am getting more and more interested to see what the S3 is....I wonder if they scrapped their original plan and are re working it.

Here is the article:

Research in Motion delivers its fiscal first quarter results Thursday and the consensus view is that international sales should keep the company humming even though it faces stiff competition�and market share erosion�in North America.

Overall, the company is expected to deliver a quarter in line with Wall Street estimates. Analysts are expecting earnings of $1.34 a share on revenue of $4.36 billion.

However, the quarter should highlight a tale of two RIMs.

The first side of RIM is propelled by international sales. Latin America, Europe, India and Asia have been strong for RIM. Indeed, Nokia�s profit warning is due to Apple and RIM competition as well as Samsung. Going forward RIM will do as well as its international sales.

Susquehanna Financial analyst Jeffrey Fidacaro says in a research note:

The positives for RIM are the potential for increased international market share as the company strategically attacks the low-end smartphone market and pre-paid emerging markets with innovative messaging plans (negative for Nokia), and we believe RIM will be a net beneficiary of tiered data pricing.

The other side of RIM is the business in North America. Here RIM needs to show some new products. Analysts expect new BlackBerry OS 6 devices in the third quarter and RIM really needs something to keep up with the Androids and Apples.

In other words, RIM�s quarterly results will largely depend on what executives say about the outlook for the next quarter as well as the new product cycle ahead. Can RIM really keep up with Apple and Android?

�Given the increasing competitive landscape from the iPhone and Android platforms, along with the prospect of Apple�s iPhone potentially coming to Verizon in early CY11, we have near-term concerns on ASPs, gross margin, and an expected slowdown in year-over-year growth, which could result in downward EPS revisions absent operating leverage,� says Fidacaro.

Gallery: Latest BlackBerry devices (photos)

William Blair analyst Anil Doradla reckons that RIM is already losing share at carriers in North America. Doradla writes:

Since our checks began a couple of years ago, this is the first time that an individual RIM device did not make it as a best-selling device across all four major North American mobile operators (AT&T, Verizon, Sprint, and T-Mobile). At AT&T, Verizon and Sprint, we believe BlackBerry Bold was the second best-selling smartphone, while at T-Mobile the Bold was the third best-selling smartphone. Bottom line, slowly but steadily, our checks clearly indicate a pattern in which RIM is losing its grip in the North American smartphone market.

Add it up and you have a lot of happy talk about international strength and some real concerns about North America. Analysts appear to be much more concerned about RIM�s answer to growing competition in North America from the likes of Apple, HTC and Samsung. Based on the numbers, RIM�s international strength should offset any perceived weakness in North America.

Here�s the crib sheet for RIM�s quarter:

�Units: Fidacaro sees RIM shipping 11.3 million devices in the quarter. Consensus estimates are a bit higher at 11.5 million.
�Average selling prices: Wall Street is expecting an ASP of $306 for devices.
�Enterprise demand: Remember that enterprise IT spending is bouncing back and mobility is a big focus area. RIM has a lock on the mobile enterprise and should benefit.
�Gross margins: Wall Street is expecting gross margins of 44.41 percent.
�The outlook: Analysts are expecting earnings of 1.30 a share on revenue of $4.5 billion for RIM�s August quarter.

I travel to Asia a lot, including China, Taiwan and Japan. I am not sure I agree that the smartphones in Asia are higher end the in the USA. I just don't see it that much. Maybe some in Japan, but that is a limited market compared to Asia as a whole. I think US phones are quite high end in terms of features and what people want. Things are definitely flashier in Asia in terms of colors, customization, etc. I just don't think the hardware and software features out pace what we have here by an considerable amount, especially in anything sold to the masses.