Research In Motion's 3G Counteroffensive: The Smartphone Arms Race Escalates

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 |  Includes: AAPL, BBRY, GOOG, PALM
by: ChangeWave Research

By Paul Carton

Two weeks before the new Apple 3G iPhone was released, a ChangeWave consumer survey showed it was likely to have a tsunami-like impact on the smart phone market. We all know what happened next – an extraordinarily successful 1 million units sold in the first weekend.

But what does that mean for current market share leader Research In Motion [RIM] (RIMM)?

First, our survey showed the 3G iPhone had catapulted Apple (NASDAQ:AAPL) into the lead in terms of planned consumer smart phone purchases for the next 90 days. But remember that RIM and its BlackBerry have a gigantic lead in the corporate smart phone market. Plus, RIM (42%; unchanged) is also the leader among current owners in the consumer market.

Yet despite its current lead in both markets, RIM isn't taking the Apple 3G challenge lying down. The Canadian manufacturer has multiple plans in motion to counter Apple's momentum among consumers, including an already announced new product release (the Bold) and two likely additional product releases (the Thunder and Kickstart).

To get a sense of the market potential for RIM's new smart phone arsenal, we surveyed 3,567 consumers on their reaction to the new RIM counteroffensive. The survey was conducted in the aftermath of the Apple 3G announcement (June 17-23), but before the new iPhone model was released.

Preparing For Multiple Battles

Consumer respondents were presented a brief description containing key features of RIM's new smart phone models, along with a follow-up question asking them how likely they were to buy each model if and when it becomes available.

As the following chart shows, the new RIM releases each show considerable potential among consumers once they actually get into the marketplace.

 

  • A total of 4% of respondents report they're Very Likely to buy the new RIM/BlackBerry Bold when it becomes available. Another 13% are Somewhat Likely.
  • Slightly less positive but nonetheless significant, 2% of respondents say they're Very Likely to buy a RIM/BlackBerry Thunder when available. A total of 13% are Somewhat Likely.
  • Another 2% say they're Very Likely to buy a RIM/BlackBerry Kickstart when it becomes available, and 11% are Somewhat Likely.

 

The Victors and The Vanquished

Our recent surveys show Apple and RIM on a clear collision course in the consumer smart phone market, as the three new RIM phones get set to counterattack the market assault from the Apple 3G iPhone.

And while the current survey shows the new RIM releases have considerable potential, the real test is how satisfied consumers will be with their new BlackBerries once they hit the market.

We will, of course, closely measure the initial reaction once consumers have their new BlackBerries – and if it turns out that the initial reviews on RIM's new releases aren't great and consumer satisfaction goes down, then RIM will almost certainly receive rough treatment from the Street.

But to date, the strength of our early survey results on the demand for RIM's new products points to a powerful counteroffensive in the making by the Canadian manufacturer.

The real losers here will most likely be the second-tier players, who could find themselves increasingly pushed to the sidelines as the two Goliaths battle for market dominance.

To find out which manufacturers are most at risk because of the RIM counteroffensive, we took a close look at the impact of the new RIM releases on the rest of the industry.

Not surprisingly, current RIM customers are two-to-three times more likely to buy the new RIM models than the customers of other manufacturers. But we found the new releases also have significant potential to lure away customers from other manufacturers – with Palm (PALM), Motorola (MOT) and Samsung coming in as the top victims.

Apple customers, on the other hand, appear least likely to buy any of the new RIM phones.

As the old adage goes, to the victor goes the spoils – and by the looks of things, Apple and RIM are both victors. The Apple iPhone has captured the hearts and minds of its user base, and so has the RIM BlackBerry. Fortunately for both, the global consumer and enterprise smart phone markets are big enough to support both Apple and RIM – it's the other cell phone manufacturers that look like the real losers.

Jim Woods co-wrote this article.

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This article summarizes the results of a recent ChangeWave Alliance survey. The Alliance is a research network of 15,000 business, technology and medical professionals who spend their everyday lives working on the front line of technological change. For more info on ChangeWave, or to sign up for real-time alerts email on the hottest technologies and companies, click here.