The iPhone-BlackBerry Showdown Continues

The battle between Research In Motion Ltd. (RIMM) and Apple Inc. (AAPL) in their key smart phone markets – business customers and consumers, respectively – continues to heat up. RIM recently unveiled the BlackBerry Bold (9000), which runs on high-speed 3G networks and can better synchronize with Apple’s iTunes music software. It may also launch a touchscreen device – codenamed “Thunder” – later in 2008.

Apple, meanwhile, is expected to a show off a 3G iPhone at its World Wide Developer Conference [WWDC] in San Francisco that begins on June 9, 2008. While Apple may indicate that as many as 250 large enterprise customers are interested in the iPhone, RIM has more than 50,000 very large enterprise customers on its platform, according to Peter Misek at Canaccord Adams.

Apple will also showcase the iPhone’s interoperability with Microsoft Exchange and claim it offers “push” technology, the analyst said. But he insists that it really isn’t “push” since exchange wireless synching “initiates a data call from the device and checks the server within a defined frequency (typically 1 to 30 seconds).” Mr. Misek also told clients that this “pinging” creates a security hole for hackers, consumes a significant amount of bandwidth and depletes battery life.

In a report he said:

We would argue that these attributes of Microsoft Exchange are the reasons why Microsoft has been unable to make a dent in RIM’s market share in the enterprise. With iPhone relying on the same technology, we do not see any reason to expect more from Apple in the enterprise.

So while Apple may make a lot of noise about opportunities in the enterprise segment, Mr. Misek does not expect its WWCM announcements will impact RIM. Nonetheless, he highlighted several likely iPhone announcements and features investors should be aware of. These include: 3G access to iTunes, audio and video streaming via Apple TV, a revamp of Google Maps (GOOG) to take advantage of the GPS function, and a camera upgrade to include video. And while it is not expected at this event, Mr. Misek said carrier checks suggest a third iPhone may be slated for 2009.

He also said all of Apple’s Web applications for the iPhone are either available now or will be eventually on the BlackBerry, and it is by far the most profitable device for carriers, which means they will allot it more marketing money and shelf space.

Mr. Misek expects Apple will sell 10 million iPhones this year and 20 million in 2009, while RIM could sell as many as 50 million units next year. He said:

While Apple may not see it this way, we believe that both RIM and Apple will take significant market share in the 50%+ growing smartphone market. We see these market share gains at the expense of Nokia (NOK), Motorola (MOT) and most especially, Palm (PALM).

Comments

[wallawallabingbang]

Wait until Apple reveals 2-way videoconferencing.

60 P/E?

Not for long.

[wallawallabingbang]

RIMM wouldn't have pre-announced products a year or so ahead of time if they weren't very apprehensive about what Apple is going to do in June at the Developers conference.

Think about it.

No other possible explanation for the urgency on their part.

[Azazello]

Peter Misek (Canaccord Adams) - an unbiased Canadian analyst - opines of the thundering success of RIM and warns of the _security hole_ of pinging on the iPhone. RIM will surely triple its sales in 2009, while APPL may double... an unbiased Canadian analyst.
poor AAPL

[wallawallabingbang]

Unbiased Canadian Analyst - what a hoot!

They've been pumping for months now.

[digivision]

I am just curious to know what this security hole is, what are the consequences because talking about security holes about a device not even announced seems a bit paranoid to me

[tom1234]

Again ---the part is not greater than the whole---as an invester i like rim even though it is a one trick pony but aapl is so multifaceted with depth and broad based product appeal i have to lean more towards aapl --so phone vs phone is good coffee conversation with aapl pushing the envelope the farthest --by the by are there numbers out as to the income per square foot earnings in the aapl stores and how they compare with others

[rd4sndk]

Unless RIM's new thunder phone comes with more NVM (nand) it will not compete with the new or the present Iphone as a mobile computer. The RIM BOLD missed the point and I suspect limited success of that phone given its under minded NVM capacity. RIM's at a advantage but old habbits are hard to break. Equipping the BOLD with only 1GB of embedded memory was a calloso mistake and the poultry 8GM max SD slot wont cut it. Surfacing the web requires storage. People will want to store video, music, photos, data, video clips, SW apps, gaming etc. 8GB is a joke.

RIMM's reliance on email will be their down fall. Email is not as compelling for a smart phone as the media makes out. If that were so, palm and others will be viable and RIMM wouldn't be afraid of lossing market share to Apple.

The evidence is so overwhelming from the Apples first launch of iphone that they had to discontinue the 4GB model an standardize on the 8GB as a minimum. Iphone currently has two models 8 and 16GB and I suspect they will add an additional 24GB or 32GB models this year if not in June. And don't forget the ipod-touch which already has a 32GB model and is selling in the top 10 best selling ipods on Amazon.

From this canadian analysis own admission, Apple is expected to double iphone sales in 2009 to a tune of 20 million and I've heard estimates upwards of 43 million. If the latter turn out to be the case, RIMM is in deep trouble. But they have until next year to release a phone with adequate NVM and a compelling user experience. Relying on the QWERTY keypad and email is a mistake of huge proportions. Consumers will abandon RIMM in droves if they fail to heed what the masses desire--more NVM. Its the memory stupid.

[Jon T]

RIM has sat on it's arse with little or no innovation and enjoying the $$$ rolling in - and now they deserve a major kicking. And boy, is the iPhone going to give it to them.

P/E of 60 - ditto above.

[Daves Here62]

Hey! I am both an AAPL and a RIMM investor - heavily into both. There is room for both in the market. The smartphone market is growing 50%+ per year and is not coming off of either of these two companies' plates for lunches nor dinners. It's at the expense of others and at the luxury of growth of the segement of the market. To those of you who think AAPL will 'have RIMM for lunch or dinner,'
remember RIMM has been basing their client base off secure email messaging enterprises and are just now levereaging off their huge inroads in these ESTABLISHED channels to hit the B2C segment - still enough room for both players, after all AAPL is going after the trendy consumer who wants to have the best toy while RIMM is (in the consumer market) going after the business man who still needs email and work to get done who wants the best looking toy.

AND to those who mock RIMM's PE of 60, as long as they keep giving stellar quarters with growth like they have, investors will keep paying. All they have to do, is keep doing what they have been doing FOR THE LAST 20 QUARTERS. Seems pretty simple to them, and easy for me as an investor.

I always enjoy what we all post in these comment sections - to all of us, let's keep having fun expressing our viewpoints!

[Tech guru]

Seriously ..
Who wants to buy RIMM devices given new AAPL iPhones and pricing ? I am waiting to toss my blackberry as soon as the iPhone 3G is out ..
Wrt polling, this is incorrect .. RIMM is pull too (all push is poll with intervals) and RIMM has security issues too (one being that you either have a provider host the mail system which is a major security issue or you install your own internally but you end up paying a lot of money and it is difficult to manage). AAPL has superior technology (years ahead of RIMM) and consumers will dictate new devices/platforms for the enterprises (it is already happening).
Imo RIMM is in trouble .. ( it will soon follow PALM path).

[PK deC'ville]

Comparing: RIMM is a one trick pony and they have about 3 years to develop another trick(s). Apple is a beast that knows multiple tricks and is known to be developing others.

The problem for RIMM (and MSFT) is Apple's tricks are incredibly dollar and time costly to match. For openers, think Std and mobile OS & apps, music, movies, TV shows, user interface, global marketing, and ongoing innovation.

I'm sorry. It's nothing personal guys, but the game's over. Apple has been quietly at work for years, developing and perfecting their tricks; Apple dominates for the next 5 years, at least.

It ain't even close. Michael Jordan against some wanna bes.

[PK deC'ville]

@tom1234

The old data on sales per sq ft ws $4600/ft, in a class by it's own compared to something like $800/ft (???) at Best Buy.

Given the last qtr returns on the retail division (up 50%), I guess the $4600 est will be revised to $6000+/ft, which comes from another universe.

[Brewer]

Mr. Misek is delusional. Apple's 'Outlook/Exchange' integration is now FAR better than RIMMs, and requires no additional servers on your end (as RIMMS does), and also doesn't require ROUTING ALL YOUR EMAIL THOUGH MR MISEKs BACKYARD IN CANADA.

Talk about a security risk! However, anything Microsoft, most especially 'OutBREAK' (as it is known in the industry) should not be in the same sentence with 'security'. None of the major virus outbreaks that Windows users have experienced (Melissa, ILOVEYOU, etc...) would have even HAPPENED without being completely facilitated by stupid decisions made in the development of Outlook and MS EXchange servers! However, it's what the people want (or more appropriately, what they've been told they want).

[tom1234]

thank you PK de C'ville--- wow wow money does not talk never did ---it screams in ones face---look at those numbers ---in this economy ---this puts all the rest of retailers in a corner --and aapl is opening many more stores around the world (china included lol) ---did apple hit $300.00 per share yet