Why RIM Could Be A Threat To Apple

| About: BlackBerry Ltd. (BB)
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In an interview with a German newspaper, Research in Motion (RIMM) CEO Thorsten Heins revealed that the Blackberry maker is keeping all strategic options open, including the sale of the hardware unit and licensing of its software. This announcement comes amid fierce competition for dominance in the smartphone market by the likes of Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT). According to IDC estimates, Blackberry OS was still the third largest smartphone platform by market share but is expected to lose that distinction by 2016.

Top Smartphone Operating Systems, Forecast Market Share and CAGR, 2012-2016, Source: IDC

Smartphone OS

2012 Market Share

2016 Market Share

CAGR 2012 - 2016 (%)









BlackBerry OS




Windows Phone
















Opening up its OS for licensing could help the firm regain market share. The success or failure of this strategy, however, would crucially depend on where the firm sets its priorities. Thus, going after the consumer market would not be fruitful and the firm could further sink into oblivion if it were to prioritise this. The consumer market, which is currently dominated by iOS and Android is becoming more and more crowded. On the one hand we have Microsoft, which is planning to make big inroads by partnering with strong vendors such as Nokia (NYSE:NOK), HTC (OTC:HTCKF) and Samsung (OTC:SSNLF). On the other hand, there is an array of new mobile platforms which are due to hit the market soon such as Tizen, Firefox OS, Ubuntu and many others. In order to gain traction in this part of the market, RIM would need offer a unique advantage for consumers, which I believe they would not have.

Focusing on the enterprise market would be more sensible for the firm as it could bring unique advantages to the table, such as high security. Hardware vendors would be more willing to adopt the platform in that case as it would allow them to gain foothold in the enterprise market. An adoption of Blackberry OS by multiple vendors with the aim of entering the enterprise could severely threaten Apple's ambitions for this part of the market. Samsung and other Android vendors who are still lagging behind iOS in enterprise would have a strong and secure platform which was tailored for enterprise and thus dampen Apple's growth in this segment. The Blackberry OS could further be adopted in tablets and thus form a unique enterprise ecosystem with multiple vendors. As Android has not gained any strong foothold in enterprise and Windows Phone has yet to establish itself as a strong contender, it would be Apple that would feel the greatest pressure from this move.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.