Market Plateau?

The iPhone 5 may be Apple's last blowout U.S. bestseller - Sep. 20, 2012

So the US is coming close to this number 70% which this article reports at the number for most markets as a saturation point.

Once the market plateaus I would much rather have RIMs business model opposed to the competition. I could go on and on as to why.

What do people think will happen? Android reaches 75 and apple 30? (could happen if people buy mutliple devices). Or what about windoes and RIM? Think things will just stay the same as they are now?

Once the market plateaus I would much rather have RIMs business model opposed to the competition. I could go on and on as to why.

Please do - currently the model consists of selling high volumes of low-end phones at cost and trying to make up the different on ever decreasing ARPU via service plan sharing with carriers - this is not resulting in profits.

So why do you want this business model?

Originally Posted by cgk

Please do - currently the model consists of selling high volumes of low-end phones at cost and trying to make up the different on ever decreasing ARPU via service plan sharing with carriers - this is not resulting in profits.

So why do you want this business model?

I think this is RIM's reality but I'm sure it's not their model

If I had to choose between the Apple business model and that of RIM, I'm thinking that I would hp with the one that banks $10 BILLION per year.

Originally Posted by machus

I think this is RIM's reality but I'm sure it's not their model

If your model does not work in any way - is it really a business model or an aspiration?

Sent from my Lumia 800 using Board Express

Originally Posted by cgk

If your model does not work in any way - is it really a business model or an aspiration?

Sent from my Lumia 800 using Board Express

I didn't expand on what the model is because I don't think we can be sure until BB10 is launched and we get a better idea of where RIM wants to go.

Originally Posted by machus

I didn't expand on what the model is because I don't think we can be sure until BB10 is launched and we get a better idea of where RIM wants to go.

I sincerely hope RIM knows where they want to go with BB10...

I'll stick with Apple's business model. 8 million phones sold over the first weekend (an estimate), iPads by FAR the number one tablet, and people are still buying MacBook Airs, MacBook Pros and whatever else Mac things they sell. And they probably still sell a few iPods (how archaic) and they are making a mint on the proprietary and mandatory iTunes Store.

And $110bn in the bank.

Yep, I think I am sticking with Apple's business model. Seems to be working ok for the company, the stockholders (shall we debate corporate value - no) and the customers.

We can only guess (and hope) what the future holds for RIM.

That's fairly easy to work out - in the first couple of years, BB10 has to fulfil a number of purposes -

* Handsets have to sell in volume *and* for decent margins, they cannot sell for cost
* It is likely to have some form of BIS plan that is attractive to consumers but makes sense in terms of driving margins up (service revenues are also declining on an ARPU basis)
* it has to contrast with BB07 which will become the middle and low-end platform (1)
* It has to provide access to value-added services (like cloud-storage, music, apps) that RIM can make additional revenue from upselling consumers in the same way google, apple and microsoft are doing.

The first one of those is an absolute - if they have to start reducing margins on BB10 device within the first year (outside of the normal product life-cycle) then it really is game over because they will quickly burn through cash and all sorts of other issues will start to crop up. All the other 'platform' things that people have mentioned like using QNX in cars and the like, they are the future but rely on the foundations provided by selling lots of devices for decent margins.


This is why the idea of RIM was always a non-starter, it would have been suicide because they simply are too small to take on Samsung in that area, I'm not sure RIM can pull it off with BB10 but it at least is a sensible plan.

(1) RIM have mentioned BB10 devices at different price ranges but I think within the first year, that's within the premium bracket rather than curve like prices and margins.

And it has to appeal to corporate customers who have to invest in BES 10 (support and servers - even virtual ones - is not free) in addition to their MDM solutions they are or have deployed.

yes that's a good point but I'm not sure how important it is at the initial stage of bb10 release because of the conservative nature of IT departments.

Anyone know what with blackberry 7, what percentage of overall sales, corporate volume sales are ?

Rather than starting a new thread, I'll mention this from forbes:

Unintentionally piling on was Citigroup analyst Jim Suva, a RIM bear who has a Sell rating and $5 taret price on the stock. Suva issued a report yesterday which listed 10 reasons why the company’s fundamentals continue to worsen.

Here they are:

* The company will “miss Christmas” this year, with no new products.
* The delay of BlackBerry 10 until Q1 2013 increases the risk that the company’s products will be “too little, too late.”
* RIM can’t cancel the Playbook tablet due to commitment to QNX as “the future of the company.”
* RIM is missing the change to seize share from Nokia; the company is down to 2% share of the mobile device market.
* Arrival of iPhone 5 and Windows 8 phones will make the environment even more challenging.
* RIM is losing carrier support in terms of shelf space, promotion support and eagerness for product certification.
* Monthly carrier subscriber fees will go lower as North American share shrinks and network outages lead carriers to push back.
* RIM is doing a major head count reduction right when the company needs to make sure to get new product out on time.
* EPS growth declining; sales growth less than half of industry smart phone growth.
* Bring your own device and corporate sandboxing “are only beginning.”

Thoughts? Rebuttal?

I posted it inside an existing thread (not a new thread).

Came out after the market closed on a day when RIM lost over 6% of what is left of the stock price. Piling on.

Originally Posted by cgk

yes that's a good point but I'm not sure how important it is at the initial stage of bb10 release because of the conservative nature of IT departments.

Anyone know what with blackberry 7, what percentage of overall sales, corporate volume sales are ?

Problem may be that people want to buy them (in the past a new BB added no work - make sure you have enough licenses and add it to the appropriate BES) but now showing up with a new BB 10 (we allows BBs as part of BYOD - just BBs and iPhones for now) and there is no way to connect it via a BES. You will have ActiveSync, but no BES until/if BES 10 is installed.

I know that on day one - unless something dramatic changes - my company will not be offering BB 10 devices to employees.

Of course we had a gigantic list of iPhone 5 pre-orders.

I actually heard mention of the Citibank analyst on Thursday I think on Bloomberg, we have it running in the background in our office. Suva doesn't really say anything we didn't already know, but I think the most important point he makes is in trying to fix a value on RIM. I have read many folks say this or that about RIM's current valuation at or below the current value of the stock. Even Chris U here has tried to fix that value. Suva is making the well considered point that you should not assume that RIM is going to hit all their marks and that affects the value of the stock over all.

His warning that the company could run out of money in 2 years is also an interesting one when one considers that even board member Prim Watsa states the timeline for a RIM turn around could be 3-5 years. While both can be true (RIM does have the capacity to borrow money to make up the difference) it means that RIM will be a much different looking company with the ability to take far fewer chances, never mind compete with the likes of money printing companies like Samsung and Apple.

While I understand questioning the value of the RIM patent book as time goes on, apparently at least IBM thought there was still value there so I disagree with the assertion of the patents being of limited value as time and market moves on.

I would not even consider the OP's premise here it makes no sense at all. Apple has a huge bank account, and I read yesterday the new phone will add 6 billion dollar profit to that cache. Even if they had to start all over from scratch (a premise I do not accept) there is no chance of them running out of funds as discussed above with RIM. The assumption running through all of this is that Apple has no clue about the future of iPhone and doesn't have any concurrent plans for the next platform. I don't remember Tim Cook saying theirs was an unmatched platform that didn't have to consider the competition and hey have you ever tried to type on a physical keyboard?"

Originally Posted by randall2580

His warning that the company could run out of money in 2 years is also an interesting one when one considers that even board member Prim Watsa states the timeline for a RIM turn around could be 3-5 years. While both can be true (RIM does have the capacity to borrow money to make up the difference) it means that RIM will be a much different looking company with the ability to take far fewer chances, never mind compete with the likes of money printing companies like Samsung and Apple.

"

This is why QNX as a platform should currently be seen as part marketing speak and part aspiration and part sensible long-term plan, that only really makes sense and becomes possible if BB10 handsets (and value added services) provide sufficient revenues for the company to last the distance.

In a situation* where BB10 devices do not sell high volumes at decent in the first year, the response is going to have to increased marketing, aggressive carrier promotions and reduced ASP etc - all of which will increase cash-burn. Furthermore as you note, they will be increasing constrained in terms of R&D and their leverage in the supply chain.


* before the usual crowd leap all over me, I'm saying that is what is likely to happen in that situation, not that I think or what that scenario to come true. Obviously if the opposite happens, you can get a virtuous rather than vicious circle.

I think the BES area is the most important, that's where they are entrenched and have a value proposition the competition can't match. For the consumer they should go into partnerships to provide content and the value add services.

Apple will eventually plateau, as will all successful companies in any sector. Microsoft plateaued some time ago, with the recent exception of the Xbox 360+Kinect. Still, does Microsoft represent a company that is financially struggling? No.

Apple has a $100 billion war chest which continues to grow. Currently, they spend less on R&D as a proportion of revenue than comparable tech companies. If they see other products posing a competitive threat (it's really just Samsung now), they will certainly raise R&D to compete more effectively. Plateauing does not necessarily mean the same thing as allowing competitors to leapfrog them.

Case in point: Microsoft got leapfrogged by Firefox and Chrome in the browser market because IE6 was so horrible to use. Nothing even remotely similar has happened in the case of competitors for Microsoft Office; it's an established product with far too much functionality for customers to go elsewhere.

iOS for better or worse will maintain their market share for the foreseeable future because Apple commits a ton of resources to making it better in each iteration, even if it's not in the scale that people would like.

Originally Posted by aniym

Apple will eventually plateau, as will all successful companies in any sector. Microsoft plateaued some time ago, with the recent exception of the Xbox 360+Kinect. Still, does Microsoft represent a company that is financially struggling? No.

Apple has a $100 billion war chest which continues to grow. Currently, they spend less on R&D as a proportion of revenue than comparable tech companies. If they see other products posing a competitive threat (it's really just Samsung now), they will certainly raise R&D to compete more effectively. Plateauing does not necessarily mean the same thing as allowing competitors to leapfrog them.

Case in point: Microsoft got leapfrogged by Firefox and Chrome in the browser market because IE6 was so horrible to use. Nothing even remotely similar has happened in the case of competitors for Microsoft Office; it's an established product with far too much functionality for customers to go elsewhere.

iOS for better or worse will maintain their market share for the foreseeable future because Apple commits a ton of resources to making it better in each iteration, even if it's not in the scale that people would like.

I would say Apple is more like Sony than Microsoft. Microsoft is first and foremost firmly entrenched in business which doesn't adopt trends as quickly as consumers. Apple could find itself in a similar position to Sony due to changing taste and commoditisation of smartphone offerings