RIM chief competing for "Most out of touch CEO" award

RIM’s co-chief Mike Lazaridis downplayed many of Apple’s efforts today in a keynote at the TD Newcrest technology conference in Toronto. The executive was concerned that there wasn’t necessarily a market for tablets like the iPad and that any devices would have to be put in the context of computers and smartphones. Many companies ask new hires to choose either a new smartphone or a new notebook, and if the tablet is simply a substitute for a notebook it may not have an easy answer, Lazaridis said.

He added that smartphones are getting more powerful and more computer like, and by extension would reduce the need for a tablet.

The company leader also dismissed the importance of touchscreen phones. While it’s important to give customers what they want, touch-only phones like the iPhone aren’t that popular, Lazaridis argued. He claimed that most of the people buying touchscreen phones are going back to phones with hardware QWERTY keyboards, like those that made RIM “famous.”

He pointed out that it was the experience and not the features that determined a phone’s success, and that the most popular BlackBerry was actually the starter Curve 8520. It not only lacks touch but 3G and a high-resolution screen.

via RIM chief: no market for tablets, touch-only phones | Electronista.

Jobs must be thinking: with enemies like these, who needs friends.

Sony Ericsson and RIM reach market share parity

[Sony Ericsson] said it shipped 10.5 million units in the quarter, a 28 percent decrease compared with the same three months in 2009. It was down from the 14.6 million units shipped in the fourth quarter.

via Mobile phone maker Sony Ericsson posts Q1 profit – Yahoo! News.

A few weeks ago RIM said it shipped 10.5 million devices.

With Apple claiming 85 million installed base of iPhones and iPod touches vs. 75 million last quarter, it’s safe to assume at least 10 million Apple smart devices shipped in Q1.

By units at least, SEMC, RIM and Apple are neck and neck.

Google and Microsoft swap mobile share

according to a report published Monday. ComScore reported that Google’s share of smartphone subscribers rose to 9%, compared to 3.8% at the end of November. Meanwhile Apple’s share fell 0.1 points to 25.4%, while Microsoft’s share fell 4 points to 15.1%.

via Google’s share of mobile market grows: report – MarketWatch.

Seems Google’s gain is Microsoft’s loss.

BlackBerry, saw its share rise 1.3 points to 42.1%, according to the data. The number of owners of smartphones rose 21% in the U.S. in the three months ended in February compared to the prior period.

Apple surpasses RIM in total smartphone revenues

What RIMM doesn’t say (and, as far as I can tell, no one else has noted) is that Apple has surpassed them in total smartphone revenues. This quarter RIMM reported sales of $4.1 billion in revenue for their whole company. Apple surpassed them, selling $4.6 billion worth of iPhones in Q4 2009 and, more recently, $5.6 billion in Q1 2010. Remember, the iPhone didn’t exist until mid 2007.i Phone sales have gone from zero to $5.6 billion in about 900 days. It’s very hard to compete against that explosive growth.


RIM Reactions: Goldman Downgrades to 'Sell'

Goldman Sachs: “Evidence that the structural competitive issues are starting to weigh on its growth prospects. We estimate that RIM’s U.S. business declined 15% [quarter-on-quarter]—the second q-o-q decline in a row, and the first [year-over-year] decline. While RIM attributed that to an inventory reduction at a North America customer, we think the magnitude of the decline points more to lower demand at Verizon as a result of its endorsement of Android; our checks showed a dramatic reduction in the number of RIM [models] at Verizon last quarter and better sales for Motorola’s DROID than for RIM at many Verizon stores.”

via RIM Reactions: Goldman Downgrades to ‘Sell’ – MarketBeat – WSJ.

RIM remains the best feature phone company out there.  Too bad that feature phones are not going to survive against mobile computers.

Blackberry Loves U2

BlackBerry – BlackBerry Loves U2

Last year U2 chose Research in Motion as the main sponsor for its tour.

Read More: Wired.com

Blackberry might love U2 but does Bono still like Palm?

You might know Elevation for its most famous partner, U2’s Bono. In the summer of 2007, the firm committed $325 million to Palm in exchange for a 25% stake in the ailing handheld computing pioneer. By the following winter, the partners would up their investment by another $100 million.

Elevation has since sold some of its preferred stock, but according to Palm’s SEC filings, it still holds enough common and preferred shares to account for roughly 30% of the business.

Others who bought around the same time as Elevation are struggling with a 33% loss, and that’s after accounting for a $9-per-share dividend.

Read more: fool.com

Maybe Bono should pick up his Blackberry in between gigs and work on a deal between RIM and Palm.

Blackberry Users Consume One Fifth the Data of iPhone Users

As mentioned before, Blackberries should not be thought of as smartphones.

Consumer Reports announced this week the results of a study it commissioned assessing the monthly data usage for customers of Apple’s iPhone and other smartphones. The data reveals:

On average, iPhone users consume 273 MBs of data per month. That compares with 54 MBs for consumer users of Blackberrys and 150 MBs for consumers who use other brands of smart phones, the Validas study found.

The disparity in data usage is particularly evident at low levels, where 80% of BlackBerry and 54% of “other” smartphone users consume less than 50 MB of data per month while only less than 20% of iPhone users maintain such low usage.

As I argued in the past, Blackberries should be considered feature phones. Doing so helps to understand both their limitations and their potential.

This categorization helps put into perspective the phenomenal growth RIM is able to maintain while not being at all competitive with other platforms by any measure of performance that defines the basis of competition in smartphones.

Being a feature phone means the Blackberry just needs to be better than a dumb phone, something it’s more than able to demonstrate to a prospective buyer.

Calibrating iPhone Growth

I calibrate my growth rates on the assumption that Apple will overtake the combined share of the two money-losing handset vendors.

Sony Ericsson and Motorola are the weakest competitors in terms of portfolio and competence with software. Their sales, units and profits shares for 2008/2009 are shown in the graph above (source: Morgan Stanley).

Therefore, my thesis is that Apple could beat these two weakest competitors in 3 more years.

Here is the basic top-down view:

In 2009 174 million smartphones were sold out of a total of 1.13 billion phones (IDC, Strategy Analytics). Using a 10% CAGR on this figure gives 1.65 billion phones in 2013

Apple obtained 2.1% share in 2009 and about 1.5% share in 2008. My forecast share for Apple:

2010: 3%

2011: 4.1%

2012: 5.5%

2013: 7.5%

During the last quarter, Sony Ericsson held 4.5% share and Motorola 3.7% therefore my 2013 target for Apple is a little less than the sum of what these two hold today.

This results in unit sales for Apple of 125 million units for 2013 and a compound annual growth rate of 50% a year.

Blackberries are not Smartphones

It’s time to re-evaluate the categorization of smartphones. The term has always been problematic. It loosely means a phone that runs an advanced operating system and has third party SDKs. There is no industry standard definition and some call it a converged device or a multimedia device. One analyst famously said that the iPhone did not count as a smartphone on launch because it was not open to developers.

I’d propose a different definition, not based on the attributes of the device, but the jobs that the device is hired to do. This is in a way, the same distinction between Facebook and MySpace. They are clearly hired to do different things by their users and as a result don’t directly compete. When you do this job-based segmentation, you realize that iPhones, Android devices and Windows Mobile and Palm are fairly similarly used. Blackberry, however, does not match the profile. (Neither do most recent Symbian devices, though for different reasons.)

The most common jobs I can see in use with the first cohort of devices is (Comscore data exists to back this up)

  • browsing
  • social networking
  • applications/games
  • email
  • media consumption
  • navigation

The Blackberry has relatively poor utilization of any function except for email and perhaps social networking (though the latter is not likely in company-sourced devices). The focus on a large number of jobs to be done is what distinguishes smartphones from the more limited “feature phones”. By this logic Blackberry is hired as a “feature phone”.

It’s also instructive to follow commentary among enthusiasts. It’s fairly clear that this segmentation exists implicitly: Android, iPhone, Palm and WinMo are comparable while Blackberries are for a different demographic, different user, different usage.

Finally, there is the gut check. It’s become clear to me that what users do with Blackberries is similar to what they do with voice phones: voice and messaging. Although additional functionality is available, it hardly gets used because it’s hard to use.

But you may ask: so what? The reason this is significant is that smartphones are embryonic mobile computers with a clear trajectory for improvement. Feature phones are overshot voice phones which are likely to be disrupted by data-centric entrants.

On a different level, it also means that growth stats for the two product types are not comparable. Saying that the Blackberry is outgrowing the iPhone (or vice versa) is meaningless.

It also means that Blackberries, being an evolution of voice products, still have a huge growth potential with those customers which are looking for messaging as an improvement for their good enough voice products and for whom smartphones are over-serving.