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Can the BlackBerry recover?

The August comScore mobile survey (MobiLens) is out. It measures the penetration or consumption of various mobile products and services in the US over a three month period.

I track the change in this data over time. Here are some highlights:

In August about 520,000 users switched to using smartphones (from non-smart phones) as their primary phone. This is a bit down sequentially from July but about average for the period starting January 2010.

Penetration increased by about 1 % to 36%.

Extrapolating this growth implies 50% penetration by September 2012. However growth is accelerating slightly so that tipping point may come sooner. Separately, T-Mobile reported that 75% of its device sales during this year have been smartphones, so if this is indicative of overall US market, then by next year it may in fact be quite difficult to find any non-smart phones to buy.

Among the smartphones, the different OSs have the following installed bases:

The growth in both Android and iOS has been fairly constant for the last 18 months.

Microsoft seems to be stabilizing at around 6%

But RIM shows an alarming deterioration. The company has lost 4.3 million users in the last year and is now at about the same number of users it had in late 2009. This is in a market that has more than doubled.

With only about 16.5 million US users and an average loss of half a million users per month, unless something drastic happens, RIM could lose its entire US user base by the end of next year.

During the last month alone RIM lost 1.2 million users. Management insists that new devices will boost sales but here we’re measuring the erosion in core users, not upgrades. It’s much more likely that those 4.3 million who left BlackBerry went to other smartphones. To move from a BlackBerry to a feature phone seems very improbable to me.

That means that BlackBerry’s pain is probably iPhone or Android’s gain. This sort of switch is often painful and I can only imagine that it’s done with some reluctance. All the more remarkable then that RIM could not offer incentives to stay. The BlackBerry brand is fading rapidly and brand value is very hard to re-build.

There’s one more thing.

We can see platform rivalry in the installed base chart but the bigger battle is the competition with non-consumption. The following chart shows how overall platforms are faring as they carve up the feature phone market.

There are still 150 million Americans whose primary phone is not a smartphone. The conversion of those users is happening at a consistent pace but there are many years of growth remaining. I’ve often wondered if and when this pace would moderate. I suggested perhaps at 50% there would be an inflection point as the “easy money” would already have been made.

Much of that will depend on how the product (device + service) will be priced. It’s hard to get data on overall pricing. We can get some subsidized phone prices (for example now ranging from $0 to $400 for iPhone and probably similar for Android). What we don’t have is an average device+service price point for the industry. That’s what I would like to keep an eye on.

  • Ryan

    Insightful as always.

    Typo: “That means that Blackberry’s LOSS is probably iPhone or Android’s gain.”

    • Ryan

      Oh, sneaky. You just changed the first ‘gain’ to ‘pain’

      • Anonymous

        NOt that sneaky. It’s a pun on “no pain, no gain” I guess

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  • Ph3238

    Horace,
    Could you explain the math behind your statement:
    “With only about 16.5 million US users and an average loss of half a million users per month, unless something drastic happens, RIM could lose its entire US user base by the end of next year.”
    0.5 M losses per month multiplied by ~= 16 months = ~16.5 M losses?

    • Canucker

      If you build in a lost customer acceleration factor of just 5% per month, by the end of 2012 the residual RIM US customer base would be less than 5 million. The tipping point is close.

    • Anonymous

      The real killer for RIM is the loss of sales,

      Down from 11% in May

      http://blog.nielsen.com/nielsenwire/online_mobile/in-us-smartphones-now-majority-of-new-cellphone-purchases/

      To 9% in August
      http://blog.nielsen.com/nielsenwire/online_mobile/in-u-s-market-new-smartphone-buyers-increasingly-embracing-android/

      If they continued to lose 2% every 3 months, they will indeed have lost their US market by the end of 2012.

    • http://www.asymco.com Horace Dediu

      There is an acceleration in losses which I did not make clear. In the last quarter 1.2 million were lost. If I use that figure then it’s about 13 months. I picked a mid-point between assuming some moderation of loss rate.

      Note that due to errors in measurement, unforeseen events, new products, etc. it’s a matter of judgement and one guess is as good as another. I would also add that I don’t think they will go to zero. More likely there will be some leveling off. You can see that with Microsoft and Other.

      • Ph3238

        Thanks; I knew there was something I was not understanding.

  • Canucker

    RIM has lost its mojo. The public failure of the PlayBook has hurt the brand (it’s interesting that the repeated Android tablet disappointments have not dented the Android smartphone – users clearly see a difference). Moreover, RIM’s lowered trajectory is consistent so it’s easy for people to project where its going and buyers do not invest in a downward trending company – a vicious death spiral. RIM is selling well in developing countries in particular but this must impact their bottom line. RIM has also lost its strangle hold on business (I think mainly to Apple) and is treading water with BBOS7 and the small recent upgrades (which make the spec changes to the iPhone 4S look revolutionary). RIM is pinning its hopes on QNX but its hard to see how that is going to make a big difference when the PlayBook is so flaccid.

    • http://twitter.com/GreenMtGuy Scott

      I would disagree that the tablets have hurt RIM or Android. I think that to the vast majority of people they’re not even aware of those tablets. It’s certainly much harder to get your hands on one to test it out than it is the iPad. My guess, and I have no data to back this up, is that the reason why RIM is failing while Adroid continues to grow, is because of the quality of the phones and as Horace would say “the jobs they are hired to do”. Blackberry’s don’t do a very good job at most anything compared to iOS and Andriod devices. Andriod, does a good enough job for many people switching to smartphones from “dumb” phones, and is also subsidized accordingly. In this way Andriod and iOS have taken away incentives for new people to adopt Blackberrys on one end, while convincing current users to switch as their contracts end/phones break down.

      • deV

        You want to test any Android or RIM tablet? You walk into Staples or Best Buy and pick up one of the many demo tablets found throughout the store. I guess if you spend 100% of your time glued to the Apple store it’s hard…

        RIM is failing because their ecosystem is a joke. Too much risk to put money down on an ecosystem that may be gone tomorrow. I’m sure that is part of the decision-making process for many of RIM’s lost customers.

        “Andriod, does a good enough job for many people switching to smartphones from “dumb” phones, and is also subsidized accordingly.”

        You keep saying that but the most popular Android phone is $200. Same price as the iPhone. And Android is picking up 5% per quarter from everyone except Apple, who is gaining a fraction of a percent per quarter.

      • Davel

        Android phones are so compelling that the Sprint CEO is publicly tying the fate of his company to Apple.

      • http://twitter.com/GreenMtGuy Scott

        deV, it feels like you’ve got an agenda you’re looking to push and are letting your feelings about technology platforms color how you view and respond to others. How about you stop evangalizing for Andriod/Google, stop with the snarky comments, and start getting to the point.

        I made the comment about testing tablets out on my own experiences, which does not include hanging out in Apple Stores 100% of the time. Specifically I was thinking of being in BJ wholesale where they have the tickets to pick up the item, but none to test. Also, when the Glaxay Tab came out I went to a Verizon Wireless Store in the Mall to try and test one out and they didn’t have any. Of course my experiences are only my own, but I still maintain that iPads have a much higher visibility. I’ll acknowledge the Andriod tablets are easier to find in stores, but the Playbook not so much. And seeing them “in the wild” it’s no contest. I see iPads being used by people on the train, airports, at work, coffee shops etc. I have yet to see a Playbook or any Andriod tablet being used outside of a store.

        As for the most popular Andriod Phones, saying that the most popular model costs $200 dollars doesn’t mean anything. Each individual model sells just a fraction of the numbers that the singular iPhone does. In fact the 3GS iPhone sells more than any single model of any Andriod phone in the United States. Andriod has such masive market share in large part because it comes in so many shapes and sizes. Also, you have to look at the prices of these phones hold up over time. The Driod 2 is being offered today by Verizon Wireless for $79 with a new 2 year contract. So yes, they’re being subsidized at different rates. Some are also given away free with a contract, or end up as buy 1 get 1 free etc.

        As for the gains that Andriod is making, just look at Horace’s prior posts. From the data it seems pretty clear that Andriod’s real competition is with the dumb phone market, and that it’s winning that handily. While there are definitely people who love Android phones and are very knowledgable about all things technology and love the “openess” of it and the ability to tinker with it, that is a small but vocal minority of the people owning the phones. They are good enough for the job they do. Look at how they’re used, much less data usage, much less app usage as compared to iOS users.

        Finally consider that Andriod’s gains in the US have been in the carriers that do not have access to the iPhone. As the iPhone spread to Verizon we’ve seen it’s Andriod adoption rates slow down. Now Sprint, a huge Andriod proponent, bet the farm on the iPhone and T-Mobile practically begging for the iPhone. To this point the largest limit on iPhone expansion has been the production limitations. Apple can sell every single iPhone (and iPad) that it makes, which is why the iPhone 4 sold more units in the previous quarter than ever before because they didn’t have to ramp down and ramp back up for the iPhone 4S like they had in previous summers.

        My original point still stands. Andriod is preventing Blackberry from picking up dumbphone converts pretty successfully, and iPhone and Andriod are leaching away the Blackberry users that remain as they both continue to expand. I do not think that the tablet segment is what is hurting RIM.

      • deV

        “How about you stop evangalizing for Andriod/Google, stop with the snarky comments, and start getting to the point.”

        I’ll readily admit I prefer Android. But my comments are at least concise and as accurate as I can make them. I agree there are more iPads “in the wild.”

        “As for the most popular Andriod Phones, saying that the most popular model costs $200 dollars doesn’t mean anything.”

        You have to start somewhere. That’s the figure I know. As far as I know, Android’s top 2 selling phones are the Samsung Galaxy S II and the HTC EVO 4G. Both are in that range. Unless you have better figures on average costs, subsidies, anything?

        “Each individual model sells just a fraction of the numbers that the singular iPhone does. In fact the 3GS iPhone sells more than any single model of any Andriod phone in the United States. Andriod has such masive market share in large part because it comes in so many shapes and sizes.”

        You seemed so close to understanding there… Android phone manufacturers sell different models to appeal to different types of people. If you look at Samsung’s lineup, for example, many of the phones are slight variations. Many use Super AMOLED Plus screens. Many use Samsung’s Exynos chip. They have dozens of phones in the Galaxy lineup. Galaxy and related carrier-branded phones is your equivalent to the iPhone series. Samsung’s lineup sells roughly the same number of smartphones as Apple’s lineup.

        “The Driod 2 is being offered today by Verizon Wireless for $79 with a new 2 year contract. So yes, they’re being subsidized at different rates. Some are also given away free with a contract, or end up as buy 1 get 1 free etc.”

        The Droid 2 is over a year old! 13 months! I’m somewhat surprised they’re still selling it. It wouldn’t really hold up that well against dozens upon dozens of current generation phones. No hardware that old does. Not even Apple’s. Price for that is actually quite similar to the really old iPhone 4 hardware.

        “From the data it seems pretty clear that Andriod’s real competition is with the dumb phone market, and that it’s winning that handily.”

        From the (comScore) data it seems pretty clear that Android is gaining 5.6% per quarter while Apple is gaining 0.6%. If you notice, both are gaining. So neither one is taking the other’s market share, at least on the surface. You can pretend that all of Apple’s share is from smarter phones/people/elite and all the Android’s share is just those “dumb” phones/people/peons. If that makes you feel better about your self/possessions/status.

        “They are good enough for the job they do.”

        They do all the same core tasks that iPhone’s do. Google’s services, which many people use, are certainly more integrated, which adds a lot of features. Many “average” people might prefer the way things are done on Android. Personally, I think they’d find Android phones do more of what they want. In addition to the options for people who do wish to customize their phone. They’re not mutually exclusive. Unless you have some weird design mantra that your benevolent leader will make all design choices for you and remove all other options. *cringes*

        “Look at how they’re used, much less data usage, much less app usage as compared to iOS users.”

        All of which is baeed on combined iPad + iPhone figures, not the smartphone usage patterns. The weight of the huge tablet market skews any combined figures.

        “Andriod is preventing Blackberry from picking up dumbphone converts pretty successfully, and iPhone and Andriod are leaching away the Blackberry users that remain as they both continue to expand.”

        It’s really much simpler to say that Android is preventing anyone else from gaining market share except for Apple, which is gaining a small fraction of what Android is gaining. If you have any survey data which shows any specifics about which former users are going to which other platform, please do share. The rest is just conjecture.

        “Finally consider that Andriod’s gains in the US have been in the carriers that do not have access to the iPhone. As the iPhone spread to Verizon we’ve seen it’s Andriod adoption rates slow down.”

        Where is this data?

      • Kizedek

        Dev,
        “You seemed so close to understanding there…”

        Indeed, Samsung, HTC, etc. are huge. Their model is indeed to have a portfolio of phone models and variations to appeal to as many different people as possible. About all they can do is give it a lick of paint, or add a new component here and there, in an effort to generate interest in new sales as time goes on.

        Apple has had the same case for 18 months for the iPhone 4. It is the best selling phone. Period. The second best selling phone is the iPhone 3GS. Period.

        This makes Apple hugely profitable at what it does. Now it is supplying a completely new phone with completely new parts and components inside the same case for a further cycle. Profitability.

        Obviously, what the phone looks like matters less to most people than what it can do. Apple can differentiate and add value through software. Samsung and HTC, etc., cannot do that to anywhere near the same degree. The iPhone 3GS will get iOS 5, adding value and making it even more usable for yet another year.

        Arguably, the iPhone 3GS is more usable than a brand new Samsung and will remain so for a futher year, despite the AMOLED screens and numbers on a spec sheet that you love to trot out in every post. The last few posts about surveys have shown that iPhone users do more with their phones. And they have wider appeal.

        All your *facts* about Android and hardware running Android still do not appreciate the fact that ONE company is competing pretty evenly with BOTH the world’s top innovative web-based software company (Google) AND the top world-class hardware device makers that have been in the device business for years.

      • Anonymous

        “About all they can do is give it a lick of paint, or add a new component here and there, in an effort to generate interest in new sales as time goes on.”

        Great for customers. And it obviously works. Verizon sells several different high-end Android phones for $300 a pop. They add new hardware as it becomes available. They do not leave ancient hardware sitting around like the iPhone 4 did for almost a year and a half, then recycle most of it in the new model.

        “Apple has had the same case for 18 months for the iPhone 4. It is the best selling phone. Period. The second best selling phone is the iPhone 3GS. Period.”

        I’ve already shown how that is flawed. So now you’re going to ignore everything I said and end everything with “Period” because you think it will make it more profound?

        “Obviously, what the phone looks like matters less to most people than what it can do.”

        Bigger screen size means:
        - Better web browsing experience
        - Better media viewing experience
        - Less crowded keyboard
        - More room for touchscreen gestures and interaction
        - More room for gaming controls
        - Better gaming interaction

        I’m sure there are more advantages. Call it “what it looks like” is just an attempt to minimize the damage and downplay its weaknesses. It’s not working.

        “Apple can differentiate and add value through software. Samsung and HTC, etc., cannot do that to anywhere near the same degree.”

        Samsung adds their own complete user interface. Are you not aware of that? They also add support for many additional media formats in the media player. They also add some graphical acceleration to their version of the Android web browser. All of which are rather big, differentiating features.

        “Arguably, the iPhone 3GS is more usable than a brand new Samsung and will remain so for a futher year, despite the AMOLED screens and numbers on a spec sheet that you love to trot out in every post.”

        Umm…no. The 3GS was pre-Retina display. The type of spec that you “love to trot out in every post.” The resolution on those old iPhone’s was grotesque. You can get pre-paid no-contract Android phones that are much better… cheaper too…

        “The last few posts about surveys have shown that iPhone users do more with their phones. And they have wider appeal.”

        The surveys show iPhone users are more likely to need WiFi because they don’t have 4G. That’s why they hop on the airport WiFi. Why would an Android user bother if their 4G LTE connection is faster than that airport WiFi and there’s no login page?

        Apprently if Android phones are outselling iPhones over 2-to-1, the Android phones have considerably more appeal.

        “All your *facts* about Android and hardware running Android still do not appreciate the fact that ONE company is competing pretty evenly with BOTH the world’s top innovative web-based software company (Google) AND the top world-class hardware device makers that have been in the device business for years.”

        Apple is slowly losing the smartphone market. They gained 0.7% last quarter in the US. How long do you think they can keep that up?

      • jawbroken

        “Many “average” people might prefer the way things are done on Android. Personally, I think they’d find Android phones do more of what they want.”

        How would you explain the large gap in consumer satisfaction and desire to switch to a different phone/OS between the two?

      • Anonymous

        Apple fans are more fanatical. I think you could easily come up with a study in any of their markets to prove that. I don’t really think that Samsung, for example, will ever develop that kind of cultural phenomenon.

        I think you’d also find a tendency for them to be self-restrictive in their product decisions. They are less likely to consider any sort of alternatives. Many groups of people who do not consider alternatives in many contexts in life are happier with what they have. Don’t really wan’t to bring politics into this, but it’s the perfect example.

        I also haven’t seen a well-designed survey that showed that Android customers wanted to switch to iPhone. If you asked me right now “Do you want an iPhone?” I would say yes. Would give me a nice device for app testing and comparison, though I would expect to be very disappointed with the screen. I would also tell you that I would love a beautiful house on the beach. Doesn’t mean I’m going to “switch” to one.

      • Anonymous

        From the (comScore) data it seems pretty clear that Android is gaining 5.6% per quarter while Apple is gaining 0.6%.

        There’s a second data set that comscore provides – which is by OEM rather than platform. When we view that we see that Android as a platform is gaining share, but Android OEMs as a class aren’t gaining share. Android is allowing them to retain their feature-phone customers, and to stop the bleeding – but the largest gainer every quarter is Apple.

        What we don’t get from comscore, or any other free source, is any rigorous idea of smartphone share across price segments. But we can establish some rough ideas.

        If we pick an arbitrary price point to split the market, say $300, we know that Apple doesn’t compete at all in the sub $300 market (unsubsidized prices here). Android, Bada, WP7, RIM and Symbian all do. It is an absolute undeniable fact at this point that Android is dominating this segment, with Bada the only other entry level participant that is growing.

        In the >$300 market we have very little hard data for Android, we’re forced to scrabble around with limited ASP figures, and the occasional model specific number such as for the SGS-2.

        The big question at this point is whether Apple’s share of the high end is growing, stable or dropping – but we can’t answer that question without knowing how the two segments of the market are growing. It seems plausible that Android’s rapid growth is predominantly at the low end, because it seems plausible that most wealthier consumers have already switched. But it’s only plausible, it’s not a fact, and there’s no hard data either way right now.

      • Anonymous

        “There’s a second data set that comscore provides – which is by OEM rather than platform. When we view that we see that Android as a platform is gaining share, but Android OEMs as a class aren’t gaining share. Android is allowing them to retain their feature-phone customers, and to stop the bleeding – but the largest gainer every quarter is Apple.”

        That’s not quite right. The figure you mention is for feature phones combined with smart phones. Apple gained 1.1% while Samsung gained 0.5%. But look at the current figures:

        25.3% Samsung
        09.8% Apple

        We really can’t tell anything about the smartphone market without looking at data that is specific to that market. The data you mentioned above isn’t. The data in the post you replied to is.

      • Anonymous

        Both sets of data have value, and both have weaknesses.

        Focusing too much on the smartphone market has problems because the line between smartphone and featurephone is somewhat arbitrary, and at the low end many users with smartphones may not be using the smart part, just as many low end users of feature phones are not using the features.

      • chandra2

        deV, you put up a good fight for Android which is good but please drop the snarky comments. Also, do not drop out of a line of discussion. You have not responded to a few rebuttals. I was curious what your counter-points are goingt to be.

  • Anonymous

    ‘What we don’t have is an average device+service price point for the industry. That’s what I would like to keep an eye on.’

    I would have thought what really matters is the lowest point rather than the mid-point. In the UK for example, android phones are now down to around the £90 mark on pre-pay. These are the unbranded phones from ZTE et al. Samsung is just about hitting the £100 mark with the Galaxy mini.

    • Anonymous

      EduardoPelligrino,

      How do the iPhone(s) compare, given the new pricing of the 4 and 3GS?

      I’m totally oblivious to buying a phone off contract.

      Thanks

      • Anonymous

        I don’t know the new pricing, but the current pricing from Orange:

        iPhone 3GS is £300
        iPhone-4 is £510.

        http://shop.orange.co.uk/iphone/choose-your-4g-plan

        We should see the new pricing once the 4S launches here.

      • http://www.asymco.com Horace Dediu

        I’m writing a post now about the “price spectrum” of the iPhone.

      • http://twitter.com/gerrymcgarry Gerry McGarry

        New Pricing from Apple
        iPhone 3GS £329
        IPhone 4 £399
        iPhone 4S 16Gb £499
        iPhone 4S 32Gb £599
        iPhone 4S 64Gb £699

  • http://twitter.com/Halfdozenmonkey Half-a-dozen Monkeys

    For me, where the inflection point is going to be regarding smart phone penetration is less about consumers choosing smart phones over dumb phones, but rather carriers and retailers stocking an reduced percentage of the latter.

    In many industries, products often take the well-trod Boston Matrix high-road from Star, to Cash Cow, to Dog. There is always however, a rump of customers that will demand and buy the Dog no matter what – you only stop this when you actively kill off the old products, and give this rump of customers something to ‘upgrade’ to (or sacrifice those customers as they are often loss making).

    The carriers get more revenue form smart phones so will gradually reduce the proportion of dumb phones they support on their networks and sell in their stores – and this will counter the anticipated penetration slow-down. Apple’s decision to drop the 3GS to ‘free’ is a great help to the carriers by giving the rump something to upgrade to. I would suggest then, that gradual increase in smart phone penetration will continue upwards unabated, stopping only at the point where those remaining ‘cannot’ move to smart phone, rather than with those who ‘choose’ not to move.

    Rich

    • Anonymous

      True enough, indeed feature-phones themselves came about this way, as the carriers killed off the old pure voice handsets. Remember when handsets were sold primarily on how long the battery was?

  • Ryan

    Right, but I meant he changed the typo that was there before, right as I was making my comment. (And I confirmed this because I had copied the text to paste it into my first comment, and it did say “gain” twice…) Anywho, it’s refreshing to see that someone proofreads his posts immediately after posting them. Sadly, that’s more than I can say for most things on the internet nowadays.

  • http://pulse.yahoo.com/_MZL5GPZPFTC3GZ2KMBA6YDGT4E Valery

    stupid calculations, nothing going linearly. That is the August data, which was the worst mons for RIM in US w/o new OS7 BBs. I think September data will be better.

    • http://www.asymco.com Horace Dediu

      But these are not sales figures. These are user numbers, installed base. The problem for RIM is that they are losing existing users to other platforms without enticing non-users to the Blackberry. Notice in the last graph how the blue area is shrinking and where it’s going.

      • Valery

        What I mean, that looks like more people moving to new BBs or upgrading to them since they introduced in US only in September, later then in Europe & Canada. BB Bold 9900/30 has sold out many times in US carers & Europe. If you go to Vodafone UK you will see still supply problem.
        BTW, according the same ComScore for July sales in E5 countries (about the same population as US) RIM actually gaining ground:

        http://www.comscore.com/Press_Events/Press_Releases/2011/9/Android_Captures_number_2_Ranking_Among_Smartphone_Platforms_in_EU5

        Top Smartphone Platforms in EU5 by Share of Smartphone Users*
        3 Month Average Ending July 2011 vs. July 2010
        Total EU5 (DE, FR, IT, ES and UK) Mobile Subscribers, Age 13+
        Source: comScore MobiLens

        Smartphone Platform Share (%) of EU5 Smartphone Users
        Jul-10 Jul-11 Point Change
        Total Smartphone Users 100.00% 100.0% 0.0
        Symbian 53.9% 37.8% -16.1
        Google 6.0% 22.3% 16.2
        Apple 19.0% 20.3% 1.2
        RIM 8.0% 9.4% 1.5
        Microsoft 11.5% 6.7% -4.8

        It is about 18% in growing market before new BB7 phones. I expect stronger August (with new BB7 phones) and especially September. If you extrapolate this date like you did for US sales we will come to over 40% of the market by end of 2112, which also will not happened.
        So, in my opinion RIM is not dead…

      • Anonymous

        We’re looking at US sales here, which is what makes the most sense for RIM because it’s their most mature market. If RIM can’t hold onto their US market then ultimately they won’t be able to hold onto their other markets.

        In the EU their position is boosted by the ongoing collapse of Nokia and Windows Mobile, and the relative immaturity of Android in that market. Neither of which will keep flattering their numbers forever.

        Here’s a riddle for you, if September was such a stellar month for RIM, why is it that no management bought stock on the good news?

        http://www.bloomberg.com/news/2011-10-05/rim-executives-resisting-buying-stock-make-investors-fret-tech.html

        They reported results in mid september, so they’re not under a normal embargo. If Lazaridis doesn’t believe that the stock is undervalued, why should we?

      • http://www.asymco.com Horace Dediu

        RIM is certainly not dead. I chronicle their fantastic growth in Latin America and India and tweet about it as news comes in. This post, however, is about the US (mentioned in the first paragraph).

        RIM disappearing completely from the US would not be a tragedy. Symbian has never sold anything in the US and it was the world’s largest smartphone platform for nearly a decade.

        However it would be symbolic and possibly devastating from an investor’s perspective.

      • arvleo

        Another point to consider is that although RIM is doing well in sales numbers(units) in countries like India, their average selling price( hence profit margins) are significantly lower than that in the US. This shows in their sharply declining earnings and probably a good indicator of the declining BB brand value.

    • Anonymous

      It seems to me that RIM fans are in a bit of denial. Every time bad news comes out, the answer is that things are turning around, just wait until the next report. Sure, let’s wait for September data. Then, let’s wait for QNX. This is not a matter of faith but an empirical question.

      Thus far, the data are very gloomy for RIM.

  • Jens Krueger

    I’ve been using an iPhone 1 and then 4 for my domestic use, happy as a clam. Due to the prohibitively expensive data roaming charges I’ve bought a BB Torch with an unlimited global data roaming plan a few months ago, thinking that the advertised “apps” would be comparable to iOS or at least usable and the software would be upgradeable. I’ve learned since that the BB Appworld and most of the Apps offered are unusable (After a couple of tries the only apps I keep using are Email, Whatsapp and Google Maps) and the OS is not upgradeable to BB OS7. Yes, a $550 smartphone is obsolete after about two weeks with no upgrade roadmap offered by the Manufacturer.

    Which brings me back to my initial point: Using an iPhone for a while makes you expect that

    a) Apps work
    b) Email is being updated within minutes not days
    c) The phone’s OS gets updated for an acceptable amount of time (2 years+)
    d) A phone that’s “touch optimized” must be usable using only the touch interface or only the keyboard; the Torch is neither

    Bottom line? I’ll never buy a BB again. And I’m sure BB users observing their iPhone-using friends are coming to the same conclusion.

    At this point I really don’t know how RIM is going to stem the tide short of a complete transition to QNX (Assuming QNX user experience is much close(er) to iOS or Android) with gracious trade-ins for existing customers.

    The only people I see sticking with BB’s are international travelers using (RIM subsidized!) global roaming plans. And those will switch as soon as carriers offer competitive global data roaming plans for iPhones or Android devices.

  • Jens Krueger

    I’ve been using an iPhone 1 and then 4 for my domestic use, happy as a clam. Due to the prohibitively expensive data roaming charges I’ve bought a BB Torch with an unlimited global data roaming plan a few months ago, thinking that the advertised “apps” would be comparable to iOS or at least usable and the software would be upgradeable. I’ve learned since that the BB Appworld and most of the Apps offered are unusable (After a couple of tries the only apps I keep using are Email, Whatsapp and Google Maps) and the OS is not upgradeable to BB OS7. Yes, a $550 smartphone is obsolete after about two weeks with no upgrade roadmap offered by the Manufacturer.

    Which brings me back to my initial point: Using an iPhone for a while makes you expect that

    a) Apps work
    b) Email is being updated within minutes not days
    c) The phone’s OS gets updated for an acceptable amount of time (2 years+)
    d) A phone that’s “touch optimized” must be usable using only the touch interface or only the keyboard; the Torch is neither

    Bottom line? I’ll never buy a BB again. And I’m sure BB users observing their iPhone-using friends are coming to the same conclusion.

    At this point I really don’t know how RIM is going to stem the tide short of a complete transition to QNX (Assuming QNX user experience is much close(er) to iOS or Android) with gracious trade-ins for existing customers.

    The only people I see sticking with BB’s are international travelers using (RIM subsidized!) global roaming plans. And those will switch as soon as carriers offer competitive global data roaming plans for iPhones or Android devices.

  • Anonymous

    The physical keyboard has been one of the things that kept (and still keeps) many users on blackberries. I wonder what effect iPhone’s new voice recognition software (Siri) will have on those users.

    • Tatil

      I am not sure if physical keyboards are such big draw. In the Android world, where manufacturers are free to offer them as they please, they seem to be relegated to the low end phones, mainly for messaging and posting to Facebook.

  • Greg Lomow

    The real killer for RIM is that IT Directors no longer dictate what devices employees can have and employees now have the choice of what device they can use at work, including the possibility of bringing their own device to work. For many years the only devices people could use at work were RIM devices.

    • Wesley Hsu

      Good point. The lines between work and personal are blurring in the smartphone category.

      Additionally, RIM’s former advantage was its dedicated server network and no roaming charges. When iPhone debuted here in Bangkok, BB users laughed at the painful roaming charges iPhone users paid while traveling out of Thailand. Now, with apps like What’s App and others which bypass the carriers, that difference has been marginalized.

      Horace’s other article about apps as the new media really says it all.

  • Davel

    I find it hard to believe that Android can recover because it seems as if the company has no direction.

    They release a tablet that is incomplete and has no ecosystem.

    Years after a competitor disrupts their market they have no compelling product to offer customers.

    They have not communicated who they are and what their strengths are. The company is confused and so are their customers.

    • Anonymous

      Freudian Slip? I think you meant Blackberry :)

      • Davel

        Yes. You are right. I meant RIMM.

        Android does have a direction and it seems they are focussing on social. However, it seems to me google’s weakness is each group rolls it’s own. For example android is not the same code base as chrome you would think they would be of the same lineage because it makes it easier for the company long and. Medium term.

        Google knows where their bread is buttered and all their products drive back to search and ads.

  • Davel

    Horace,

    I notice you changed your logo again.

    I like the previous one better.

  • Nuthatch

    The charts are wonderful as always, but the random color choices are distracting. May I suggest for example Apple is red, Android green, Microsoft blue. Failing that, please assign the same colors to charts and graphs that occur together in the same article? It would help readers with color vision correlate the patterns you are trying to demonstrate.

  • Corey Peterson

    Your last chart makes it look like the total number of phone users in the US has stayed flat for two years – that seems unlikely.

    • Anonymous

      It’s as close to flat as makes no difference. At around a 95% penetration rate there’s only population growth left.

    • http://www.asymco.com Horace Dediu

      comScore has kept that total constant for the last few years. I agree it’s improbable but that’s what they report and these charts are based on their data. Generally speaking however, the overall total is unlikely to change dramatically over a year or so as the market is essentially saturated.

  • mbotta

    Horace, off topic, but you’ve been talking about Apple’s move into the cloud and its privacy implications – possibly turning users from customers into products.

    Here’s an interesting AllThingsD video clip with Walt Mossberg asking Steve Jobs about the privacy implications of technologies such as location services. I thought you might like this as a data point in your research effort.

    • http://www.asymco.com Horace Dediu

      It seems the difference is that Apple believes it should ask first.

    • deV

      Such an odd interview. Steve Jobs mentioned Google’s WiFi access point mapping without mentioning that Congress was pursuing an investigation into the details of Apple’s project to map out WiFi access points.

      http://www.pcworld.com/article/201486/apple_location_data_collection_policies_what_you_need_to_know.html?tk=rel_news

      Jobs also acted like he didn’t know how Google’s app permissions worked. The app displays that list of permissions needed as defined by its developer in the app’s manifest when it is uploaded to the market. If an app uses the location API ever in its lifetime, that permission must be there. Google verifies that the code matches the manifest, and truly does not call the location API library before approving the app. There is no way to get past the check and still call the location API.

      Steve Jobs truly must know how that works. But he sure did keep a straight face pretending he didn’t.

      Find Your Friend or whatever Apple calls it is very similar to Google Latitude and similar voluntary location services. Both have good privacy controls.

      Note that all of the above is all very different from the cloud services. Google has been the leader in cloud services, with Google Docs, Picasa, Google Music, and several other cloud services, before Apple joined the market with its failed MobileMe and now iCloud. All of Google’s services have options to sign-in and out and disable synching. This month’s Apple keynote demoed Photo Stream without showing any sort of option to turn off sending your images to all your devices, which would be a big issue, but I assume they’ve got that covered and it wasn’t shown.

      Cloud sharing privacy is definitely something to be taken seriously. I don’t foresee any big problems with the major players in that market though. Except maybe DropBox, who don’t seem that concerned about privacy at all.

      • Kizedek

        Sure, Android apps will provide some documentation, and Google will perform some check; it would be pretty foolish, and probably illegal, not too.

        But it sounds like an Android user just makes a one-time approval at the time of installation, like pressing an “I accept” button, following a load of text. A lot of people will hardly pause since they just want to install the app and start using it already. They won’t know when or how or why an app might be accessing location services, etc. Secondly, the fact that Android apps can share services and more easily pass data back and forth between themselves is a little ambiguous, and that is asking for trouble.

        On iOS, apps are intentionally sandboxes, and I get notifications all the time that a particular app wants to use location services; I can allow or deny on a case by case basis, as it becomes necessary during actual use of an app. I can see at the top of the screen whether any app (not just the one I am currently using) iis actively using location services at any given moment; and I can go into a master list and deny any individual app access to the services.

        Another question is about the vetting of Apps that get into the respective stores. Apple’s approval process is simply more thorough. Period. In fact, people complain about how thorough it is. There have been abuses on the Android stores, where much more malware of various types has been known to get into the stores.

        The other question is what Google, as opposed to Apple, will do or not do with different types
        of information. Data gathered by Google seems to pretty much be there for the asking by the highest bidder. Apple has, in my book, earned a lot more trust.

      • deV

        That on-access location permissions sounds like a good idea. You’re right that in Android you are only asked when it is installed. Thanks. I did not see what the benefit was. But I suppose if you only wanted an app to track you for a second, it might be helpful?

        Android apps are sandboxed by design. Here are the technical details: http://developer.android.com/guide/topics/security/security.html

        “Another question is about the vetting of Apps that get into the respective stores. Apple’s approval process is simply more thorough. Period. In fact, people complain about how thorough it is. There have been abuses on the Android stores, where much more malware of various types has been known to get into the stores.”

        People complain that Apple’s competitors, like Sony and Google, among others, get denied by Apple’s process. I don’t know what Google’s process is, but I do know that Android apps are Java, and Java is quite human-readable, unlike compiled Objective-C. So I’d expect that Google’s would be more likely to ensure apps follow policy. Perhaps the policy is lax.

        Seems like some malware got through to the market recently. The apps require the user to accept some really elevated permission requests, but I suppose most users would just click “Accept.” The big Android malware issue, though, seems to be in China, where the unofficial non-Google Android phones are sold without the Android Market available. Sketchy manufacturers, poor security, users doing their own app installs from random sources…recipe for disaster. But it doesn’t really affect anyone who uses the Android Market on an officially supported phone.

        Man, I need to watch my present/past tense when referring to Jobs. He isn’t with us any longer… I found this interview of Steve and Bill Gates interesting. Maybe you’ve seen it: http://www.youtube.com/watch?v=_5Z7eal4uXI

      • Anonymous

        Some points, first off Android apps are not exclusively Java, there is a native dev kit as well.

        http://developer.android.com/sdk/ndk/index.html

        Then on security, though Android is sandboxed, the level of security is generally lower than that offered by iOS.

        http://www.symantec.com/content/en/us/about/media/pdfs/symc_mobile_device_security_june2011.pdf

        For example Apps may read all of the data on the SD card without restriction (regardless of which app created a particular piece of data, all apps can read that data)

        Stories about Malware on the official app market have been floating about for a while.

        http://www.wired.com/threatlevel/2011/03/android-malware/

        Android’s approval process is known to be incredibly weak. For example there are a bunch of Apps masquerading as being affiliated with Instapaper by both name and icon. Marko Arment has apparently complained about them, but no dice.

        https://market.android.com/searchq=instapaper&so=1&c=apps

        Google pays very little attention to protecting Devs’ IP, which means it’s easy for malware attackers to take a real App, decompile it (readable java remember?), add a payload, then resubmit it under a name or using an icon which will make users believe it’s the real deal.

        The problem does happen on iOS too, but the take-downs are faster.

        Neither the Apple nor the Android app models are perfect, but so far the faults in Apple seem less bad for the average consumer.

      • Anonymous

        I think that the new time-limited location sharing app they demo’ed in the keynote is a really interesting example of how to compromise between privacy and utility.

  • James

    “The Blackberry brand is fading rapidly and brand value is very hard to re-build.”

    Quite true. I think it may already be too late for RIM – even if they managed to release some amazing products in the near future (which itself seems unlikely), the *perception* that they’re not competitive is already there. That’s very hard to overcome.

    They’re sort of like Apple in the mid-1990s – the products are barely competitive anymore, and it’s to the point that new users don’t even consider them in the first place.

  • Mac

    your data is wrong – RIM actually reports subscribers. The company had 70 million subs as of last quarter, up from 51 million a year ago – and that excludes “phone only” sales. The company has yet to report a net subscriber loss.

    • jawbroken

      How does their global subscriber number in any way contradict the presented data, which is clearly labelled as being US only?

      • Mac

        It contradicts it in every possible way.

      • El Aura

        Aren’t the US data the maximum potential RIM can currently achieve (since the US has been one of the markets they have targeted intensely for quite some time)? RIM growing globally means they are expanding into additional countries and carriers but their US share likely presents the glass ceiling for them that will apply to other markets as well?
        Whereas Apple might not even reached its US ceiling because it not even yet on all carriers and only rather recently got onto the CDMA carriers.

      • Mac

        That’s the ultimate question. The key to the answer is understanding the Indian and Chinese markets. Both/either could make/break any smartphone player.

      • http://www.asymco.com Horace Dediu

        The trend so far has been that emerging markets follow western markets with a delay of about 18 to 24 months. That’s not to say that it will continue to do so, but that’s been the story of mobile for 15 years. It’s also not saying the all advanced market innovations transferred to emerging markets, but most did.

        Adoption of phones in general, standards, penetration itself, “generations” of network technologies, screen technologies, input methods, use cases, platforms, etc.

        I can think of one innovation that may be going in the other direction. Mediatek chip sets might penetrate western markets, but that is still to be seen.

      • Tatil

        Payments though mobile phones is another innovation that has not migrated to the rich world. Not yet, anyways.

      • GeorgeS

        Is Japan part of the “rich world”? What about Horace’s native country, Finland?

      • http://www.asymco.com Horace Dediu

        I’m not a native of Finland, but I am a resident. Your point is valid however. I use mobile payments very frequently to pay for public transportation. I believe this is also common in Japan.

    • http://www.asymco.com Horace Dediu

      This post is based on US only data. It’s mentioned in the first paragraph and the 5th and the 10th and in the penultimate. It’s also noted in the title of every chart.

      Thanks for pointing out the global subs data. It gives a new perspective.

      • Anonymous

        There’s actually another discrepancy between the two datasets. Comscore only reports on a consumers’ primary handsets, so if RIM has a preponderance of secondary handsets, they won’t show up on the comscore data.

        However given the trend in consumerization of IT, secondary handsets aren’t a good market segment to be occupying.

      • Mac

        That’s fair, but focusing on a market that only represents 25% of RIM’s business seems misguided to me. Also, I’d suggest reducing your reliance on comScore, which is based on survey data. And the word “BlackBerry” has two capital Bs in it. If we’re going to abide by the “iPhone” capitalization scheme, we should do it for BlackBerry as well.

      • Anonymous

        The US has traditionally been a leading indicator of where the market is going. And the problem for RIM in losing in the US market is evident in their plummeting handset margins and ASPs.

      • http://www.asymco.com Horace Dediu

        This post covers the US, you can look at global sales and other data on profitability, margins, market share, etc in the Explore Vendor Data in the rightmost column on this page.

        You can also search for other perspectives on BlackBerry in other posts.

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