Looks Like We're Still a BlackBerry Nation 42 comments
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This week I had a two-day trip to the Michigan State telecommunications center to deliver a talk (more later). Due to the difficulties of getting to Lansing from San Jose (or SFO), that meant six flights through five airports in a 42-hour period, including a circuitous routing LAN-ORD-LAX-SJC.
At O’Hare airport, I was among the last to board the flight to L.A. Walking through first class, of the eight people in first class, three were intently reading on their cellphones — all BlackBerries (RIMM). When I squeezed into my middle seat, the two guys on either side were reading on their BlackBerries. On the final leg to San Jose in a CRJ-70 with 2+2 seating, my only seatmate was reading something on a BlackBerry.
All of these BlackBerries had thumb keyboards — no Storm in sight. In fact, these were all standard width phones — no Pearls either. On Friday, there was a remarkable overlap between BlackBerry owners and airline travelers.
When I hang out with tech types here in the Valley, the iPhone (AAPL) is it, and the BlackBerry is passé. This includes not just those in the industry, but also housewives and students who have the bucks to buy the pricey phone and its pricier data plan. That also applies among tech-savvy college professors or grad students that I meet in my travels.
But when you look at the market share numbers, the BlackBerry is still killing the iPhone. Here is the IDC smartphone marketshare for the US, as released in dribs and drabs of press releases over the last 15 months.
| 2007 | 2008 | ||||
| Company | Q4 | Q1 | Q2 | Q3 | Q4 |
| RIM | 35.1% | 44.5% | 53.6% | 40.4% | 47.5% |
| Apple | 26.7% | 19.2% | 7.4% | 30.1% | 22.3% |
The story, of course, is pretty simple. Apple has only one model, and so gets a huge boost when it comes out (and had a 2nd boost in Xmas 2007) but otherwise tapers off the rest of the year.
The other reason is that to launch the iPhone in the US, Apple gave one company an exclusive, thus limiting its sales. Clever distribution ploys aren’t going to get around the fact that Research in Motion sells through almost everyone (even MetroPCS) while Apple is only selling to the 28% of the market that is on or willing to be on AT&T (T).
This exclusive is of course a legacy of its 2007 revenue sharing model. In 2008 (when Apple added the majority of its countries), the norm appears to be multiple carriers. In a quick spot check, that’s two carriers in Chile (unlike Claro and Movistar), India (Airtel and Vodafone), Italy (TIM and Vodafone) and Sweden (Telia and Telenor), three in Australia (Optus, Telstra, Vodafone) but only one in Canada (Rogers and its Fido subsidiary), Japan (Softbank) and Mexico (Telcel).
This leaves out the differences in the devices and usage. Both devices seem popular for Internet use (as opposed to Palms (PALM) which are often used as just organizers). However, the BlackBerries seem to be about reading text while the iPhone seems more about surfing the web. (Both are obviously used for e-mail).
Apple has some hope. The 20ish young man next to me en route to LAX put his BlackBerry away when the plane took off, and spent the whole flight with his iPod Touch. He said he would have bought an iPhone but still had a contract on his BlackBerry.
In 2008, Apple added most of the interesting countries, so in 2009 it won’t be able to add countries (except China) that will significantly grow its global market share. This leaves two options for growing share in the rapidly growing smartphone segment that was up 22.7% last year. However, I have major doubts whether Apple will pursue either one.
One is to release a broader product line in 2009 — not just one model but many, as it did with the iPod. However, Apple seems loath to cannibalize its premium product, nor (I suspect) is it willing to tinker with the original vision (e.g. by adding a keyboard).
It may be that Apple will add other types of mobile devices to increase unit sales without regards to cellphone market share bragging rights. After all, Apple sells 3 iPod Touch units for every 4 iPhones worldwide, and all of these models are driving revenue to the App Store. The rumored Apple netbook might similarly be an iPhone OS device that doesn’t count towards cellphone market share.
The other is to add additional carriers in those countries where it originally granted an exclusive. One problem is that it appears the exclusive doesn’t expire until 2010. The other is that Apple COO Tim Cook explicitly said last week that Apple has no interest in CDMA, which rules out the majority of the US cellular market (Verizon-Alltel (VZ), Sprint (S), US Cellular (USM), MetroPCS (PCS), Cricket). T-Mobile (DT) is less than half the size of either AT&T or Verizon.
So if 2007 was the initial foothold, and 2008 was global proliferation based on 3G support, I suspect the 2009 story will be about proliferating new devices that are not necessarily phones. That will leave US a BlackBerry nation for at least a few more years.
Disclosure: None
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This article has 42 comments:
- A lot of companies haven't authorized iPhone use yet. They will.
- Many companies are heavily invested in BB infrastructure. A change will take time. But it will come.
- Apple is positioning itself to undercut Microsoft with Apple Server products. Apple doesn't charge for client access licenses, MS does for server access, Exchange, etc. iPhone will help these conversions happen, starting with smaller organizations.
Like you said, plenty of people entered new contracts with non-iPhones around the time the iPhone came out. Now the iPhone has proven itself and those contracts will lead to another surge for AT&T beginning in July and padding iPhone sales for the rest of the year.
Take a look at this powerful article posted yesterday, "Snow Leopard Server to offer low cost, secure mobile access to iPhone", here:
www.appleinsider.com/a...
When iPhone battery life is 21 days standby there will hardly be a person who wouldn't be a iPhone user.
When native iPhone applications using Chinese virtual keyboard there would be 1.3 billion App Store downloads per minute in China alone. Hindi apps? Another 1.2 billion App Store downloads per minute in India.
Where would that leave the Rim QWERTY?
An interesting way to assess which firm is beating the competiton, one an segment the markets along an axis of product attributes that consumers base their purchase decisions. Possibilities are price, function, carrier (AT&T and willing to switch, non-ATT & unwilling), Only in segments where RIM and iPhone are among the models considered for purchase would give the best representation of which models are the winners.
Consumers who won't pay more that $99, or won't switch to AT&T, who choose RIM would be excluded from the market share, the theory being, is that Apple could introduce a 99 model at another carrier one day.
I think what is important when thinking about RIM, is the growth of the enterprise segment RIM has that market locked up, so mostly increased sales there will come from growth enterprise users, meaning new users, not competitors users. Certainly that market growth has slowed. The consumer market is the area up for grabs, and the primary source of growth for both firms.
Almost all the accesses are downloadable for services such as Amazon, UPS, banks, eBay, and thousands others for iPhone, why would corporations and consumers use the rigid, limited, insecure and expensive Rim infrastructure? Rim Rip.
As I posted on Naveen's blog yesterday, if you consider Apple vs RIM from a platform perspective, you need to count the iPod Touch in with the iPhone as both run the iPhone OS and both run Apps.
From that perspective Apple has been beating RIM for the previous 2 quarters and is neck and neck this last quarter. It's not all about phones anymore but mobile OS platform.
-Mart
On Apr 25 04:29 PM Option Maestro wrote:
> What do you think if anything will happen to AAPL and Rimm's market
> share, when the Palm Pre is released?
Amen!
I was about to post the same -- but scrolling down I ended up seconding you.
BlackBerrys have been around for years in the corporate world. No way people are just going to give them up overnight especially if they don't need an alternative device. BlackBerrys are great for email and texting and maybe that's all a lot of people actually need. Maybe a lot of adults don't want to be playing games or watching videos.
Apple loyalists have been saying the BlackBerry will eventually be killed by the iPhone when in fact the iPhone has been helping RIM sell more BlackBerrys. The smartphone market will continue to grow and RIM is flexible enough to provide consumers various models to suit various lifestyles (keyboards, clamshells, touch, large and small displays, etc.)
With Apple you get what they decide is best for you and that's it. You either like the one model they offer or you don't buy it. Maybe that will change in time, but that will be sometime in the future. Apple can't touch RIM in the corporate world right now but maybe it is building tools that will make the iPhone unbeatable when the Apple desktop and mobile platform merge into one. Anyone that expected the iPhone to take the corporate world from RIM in a couple of years is just dreaming.
On Apr 25 09:04 PM iphonerulez wrote:
> With Apple you get what they decide is best for you and that's it.
> You either like the one model they offer or you don't buy it...
You miss the point. If the phone is a computer, then it is the software that differentiates the individual user's handset. You can phone out/in, you can type, and it can display. These are the essentials. A 3" screen is a 3" screen. When you have a full computer, then having 40 different models is superfluous.
So, do they have this share because it is easier to browse, and so everyone who owns one browses more? Or is it that users who want to browse are attracted to the iPhone? Perhaps some of both.
This is important because THIS is where the market is going.
Personally, I believe that Apple will dominate the "new smartphone" or "compu-phone" market. All the other players will be competing amongst themselves for the rest of the market. At a certain point, when the market for these devices stops growing, RIMM will be left with nothing left to do.
Personally, if I were a dominant player in a given, technology market, and a new player stepped in and immediately grabbed 22% share, I would be pretty concerned!
As long as apple retains it's premium luster and margins they will do fine. They need to fork a lot more in R&D to stay ahead of the consumer cell phone market. If it finds itself fighting in the mid market phones a decade later it's business model will clearly be in trouble.
I also agree with the author that the AT&T alliance is not beneficial to the long term marketshare for Apple, although I understand Apple's perspective. Its quaint revenue sharing model is quite profitable. AT&T need Apple more than Apple needs them, so naturally AT&T had to pony up ridiculous revenue for the deal which no other sane carrier would dream of giving. Still locking yourself in with a carrier naturally limits and detracts those who could and probably would have bought your product otherwise.
The mobile phone market is always a fun market to watch. Apple's entry was a game changer. Let's see if they can keep the momentum. I am also eager to see the effects Google will have on this market. This market is still evolving at an incredible pace. Even with a recession, I don't see evolution slowing in this segment.
We have a good friend who is an attorney. She carries both a Blackberry and an iPhone in her purse. The Blackberry was given to her by her employer for business use. The iPhone is her personal phone.
She loves her iPhone and tolerates her Blackberry. That says it all.
The Snowleopard Server is going to elegantly kill the windows exchange server need to provide SSL proxy security on every level from e-mail, to iCal, address book server, wiki and secure online payment processing at a pricepoint of $3800 for unlimited users while the corporate world is paying Microsoft some $30,000 per 100 users.
Now think twice before making statements like: iPhone may only serve a certain segment of the market. Once the dust settles with the introduction of the snowleopard server software, the corporate approval of iPhone will skyrocket signing the death warrant on RIMM, PRE and other unwieldly "smartphone" providers.
Oh did I mention that the coupe d'etat will be when the iPhone goes multi-lingual? Like in... you talk to the chinese in english and they hear your voice in Mandarin and talk to you back in Mandarin and you hear their voice in english?
Think that is far off? Think again and if you need confirmation look at the Apple job opening list if you get a chance!
Perhaps so - "same league" is a subjective term - but the products are in the same market, and analogies related to their shared market are understandable.
I prefer the iPhone and agree with you that it'll take the lead, for reasons including those you mention. But making comparisons between it and competitors is valid (and will remain valid even when the iPhone is firmly on top. : )
Apple makes progress.... very... slowly... and they don't take a lot of risks, but if you are forward looking I can't see how RIM is going to have an advantage over them.
But that's how blackberry wielding executives make their decisions, communicate, and work. blackberry is email only. Email is incomplete, incoherent, random, dysfunctional, chaotic, disjoint. Yet executives use them for mangerial functions. Small wonders the economies are ruined by these blackberry driven business culture.
People are blind to their own mistakes.
Keep on making business decisions using blackberry email culture will only bring about more chaotic and destructive results to the beaten down economies.
If this is indeed still a blackberry nation then the nation is still doomed.
The reason why a comparison of the iPhone and RIMM products is "accepted" is because people would like to put them in the same market since that is the only way they can fathom/understand the product. Even Apple is guilty of that by calling it in first instance a "smartphone".
It's like comparing a donkey and a Roll Royce. Both are transportation, but to put them in the same league because of "Shared Market" would be undermining my intelligence. A Market segment is defined by point of utilization. Collectively we have not yet defined what "point of utilization" is for the iPhone but for the same reason we could not put the faxmachine in the same league with the phone some 20 odd years ago, we cannot just for lack of better understanding of its capabilities, state it's a phone. Because if that would be true than i can imagine that the iPhone has an equal "shared market" with xBox, playstation and nintendo, yet nobody has put them into that equation.
On Apr 26 11:17 AM Mac'em X wrote:
> @tommylee: "...I don't understand why analysts keep on insisting
> to draw an analogy between RIMM and Apple or any other phone maker
> for that matter. They are simply not in the same league."
>
> Perhaps so - "same league" is a subjective term - but the products
> are in the same market, and analogies related to their shared market
> are understandable.
>
> I prefer the iPhone and agree with you that it'll take the lead,
> for reasons including those you mention. But making comparisons between
> it and competitors is valid (and will remain valid even when the
> iPhone is firmly on top. : )
--------------------
Anyone that studies Apple's business should know they only play in the premium marketplace – at each price level. Many people thought that when Apple had to compete with lower priced MP3 competition they would not succeed. However by always delivering the best (premium) quality player in the price category [see the Shuffle] Apple has maintained it's 70%+ market share.
I suspect that 10 years from now Apple will provide a variety of products that use the iPhone Mobile OS platform and each will provide the "premium level" of value in it's price range.
RIM will continue to do well. They are an excellent company with an excellent product portfolio. There is and will continue to be plenty of room for both companies to prosper. Nokia probably has the most to lose by the growth of the smartphone category.
----------------------...
On another subject... Will 2009 be the year Apple's marketcap surpasses that of Microsoft? It may be close.
On Apr 26 05:25 AM Moon Kil Woong wrote:
> I think the target markets are vastly different for the two phones.
> Blackberry has always been a great success targeting itself for businesses
> and business applications. iPhone is the high end consumer market.
> Extraordinarily different targets.
>
> As long as apple retains it's premium luster and margins they will
> do fine. They need to fork a lot more in R&D to stay ahead of
> the consumer cell phone market. If it finds itself fighting in the
> mid market phones a decade later it's business model will clearly
> be in trouble.
>
> I also agree with the author that the AT&T alliance is not beneficial
> to the long term marketshare for Apple, although I understand Apple's
> perspective. Its quaint revenue sharing model is quite profitable.
> AT&T need Apple more than Apple needs them, so naturally AT&T
> had to pony up ridiculous revenue for the deal which no other sane
> carrier would dream of giving. Still locking yourself in with a carrier
> naturally limits and detracts those who could and probably would
> have bought your product otherwise.
>
> The mobile phone market is always a fun market to watch. Apple's
> entry was a game changer. Let's see if they can keep the momentum.
> I am also eager to see the effects Google will have on this market.
> This market is still evolving at an incredible pace. Even with a
> recession, I don't see evolution slowing in this segment.
Rim is a terrible company to work for. The internal culture in Rim is chaotic, ruthless, dysfunctional, wasteful. Rim was lucky being the first pager company a long time ago, but Rim has neither the managerial capability nor the corporate vision or culture to survive in a global economy.
Most of the Blackberries sold in the last year do not compete in the same space as the iPhone. Not because they are business phones. Not because they are sold on competing networks to AT&T. Not because they are cheap phones. It is because they are not smartphones in the modern sense of the word. They do not work on the real Internet. They are not miniature computers.
blackberry = Bush
iPhone = Change
blackberry = Bush
iPhone = Change"
i think you shot yourself in the foot on that one. so far obama has proven to be little more than a bad joke, not that bush wasn't as well. no changes yet, hopefully a lot soon as he is keeps making the economy worse.
this shows just how stupid and ignorant this individual is. nokia by far is the cheap market leader. that should be so obvious. I also guess this ignoramus doesn't realize that the BOGO offer is subsidized by the carrier, not rim. SA should ban people like this for stupidity and adding zero to the collective conversation.
It is the right things I said that set the wrong kind of people on edge.
Uh, yeah, it can under wifi, if you buy two boxes. Not BOGO ;-) just an iPod touch and a mic headset ($29). That is easier to set up with SKYPE (and you can do it yourself) than getting a cell phone activated. I know you hate to hear this ;-) but when the next software update occurs, you will be able to recieve calls on it via notification services (so skype doesn't have to run constantly in the background, slowing down the device).
If we had wifi everywhere, you wouldn't even need cell phones at all.