iPhone Competitors: Research in Motion

Starting with this post on RIM, I will look at some major players that the iPhone will be competing with. An earlier post on RIM can provide good background for this post. In it, I have suggested that RIM does not directly compete with the iPhone, because of its prosumer focus, whereas the iPhone is a consumer media phone.

Research in Motion (Nasdaq: RIMM) is a leading designer and manufacturer in mobile communications industry with revenue of $3.04 billion and 6,250 employees in fiscal 2007. RIM is the king of the converged mobile devices market for the enterprise or prosumers with over 9 million subscriber accounts. As per IDC, RIM is second behind Nokia in the converged mobile devices market for Q4 2006.

Based in Waterloo, Ontario, its main products and services include the BlackBerry® wireless platform, the RIM Wireless Handheld™ product line, software development tools, and radio-modems. The Blackberry wireless solution with the push email feature is the breadwinner for the company and is popular among prosumers. RIM is also gaining ground with the launch of consumer-oriented BlackBerrys. Interestingly, at the end of fiscal 2007, over 27% of the BlackBerry subscribers were non-enterprise users. In fact, in certain segments of the market, the RIM has successfully positioned itself as a laptop replacement device. Example: Wall Street.

On the financial front, revenue for first quarter of fiscal 2008 was $1.082 billion, a 16.3% increase from $930.4 million in the prior quarter and a 76.5% increase from $613.1 million in Q1 last year. 2.4 million devices were shipped in the quarter and accounted for 76% of the revenue. The total number of BlackBerry subscriber accounts in the quarter increased by approximately 1.2 million.

RIM, as I expected, doesn't seem to be hurting due to the launch of iPhone and it expects revenue in the range of $1.3-$1.365 billion and subscriber account additions in the range of 1.325-1.375 million for Q2 fiscal 2008.

The advantages the iPhone has over BlackBerry are many, the most important of them being the user friendly touch screen and Wi-Fi. The touch screen has been found to be surprisingly easy to use even with one hand. Internet browsing is also much better in the iPhone (except for the speed). And of course its sleek looks and multimedia features make it attractive for consumers.

RIM is trying to maintain its lead in the enterprise market by adding media player and Wi-Fi functions in its latest products, Pearl and Curve. This, they hope, would prevent prosumers from being tempted to move away to the iPhone. Its efforts are paying off and its stock is soaring with its current share price fluctuating close to $220, broader market weakness notwithstanding.

For a while yet, I think RIM has an excellent positioning, and the overall convergence device movement should give them plenty of tailwind.

Disclosure: none

Comments

[Tom B:]

The RIMM has a couple more years of existence, but to claim that the RIM is more "Prosumer" than the iPhone clearly indicates that you are working from some seriously flawed premises. Can you click on an Email address on a web page in the RIMM and generate an Email message? Can you effortlessly set up a conference call? Can you hobble together some multimedia capability the RIMM that won't constantly remind you how inferior to the iPod the experience it is? Didn't think so.

2007 Aug 08 08:47 AM

[ryanje:]

You heard about the battery issue...hard coded to device....good for about 300 charges b4 you must mail unit to Apple for fix.

2007 Aug 08 10:48 AM

[Tom B:]

I hadn't, but one imagines that the version 1.1 hardware will address this. The original iPod had battery issues, as well. Power Management, in general, and batteries, in particular, are very tricky from an engineering POV.

2007 Aug 08 11:12 AM

[Bahi:]

After 400 charge/discharge cycles, the battery holds 80% of its original charge. If it's half-discharged every time you need to charge it, that's 800 times you get to charge it - after which it holds STILL 80% of its original charge. This is very different from "good for about 300 charges b4 you must mail unit to Apple". And a third party is now offering a $45 battery guaranteed for ten years.

2007 Aug 08 09:40 PM

[Dan Poarch:]

There is more than enough room for both RIM and Apple in the smartphone market. Thus, I don't necessarily see them as direct competitors. I have no interest in a Blackberry but would love an iPhone, based solely on features, I'm not 'choosing' between the two. One does what I want, the other doesn't.

2007 Aug 08 12:49 PM