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iPhone Competitors: RIM

Posted on Tuesday, Aug 7th 2007

Starting with this post on RIM, I will look at some major players that the iPhone will be competing with. An earlier post on RIM can provide good background for this post. In it, I have suggested that RIM does not directly compete with the iPhone, because of its prosumer focus, whereas the iPhone is a consumer media phone.

RIM(Nasdaq: RIMM) is a leading designer and manufacturer in mobile communications industry with revenue of $3.04 billion and 6,250 employees in fiscal 2007. RIM is the king of the converged mobile devices market for the enterprise or prosumers with over 9 million subscriber accounts. As per IDC, RIM is second behind Nokia in the converged mobile devices market for Q4 2006.

Based in Waterloo, Ontario, its main products and services include the BlackBerry® wireless platform, the RIM Wireless Handheld™ product line, software development tools, and radio-modems. The Blackberry wireless solution with the push email feature is the breadwinner for the company and is popular among prosumers. RIM is also gaining ground with the launch of consumer-oriented BlackBerrys. Interestingly, at the end of fiscal 2007, over 27% of the BlackBerry subscribers were non-enterprise users. In fact, in certain segments of the market, the RIM has successfully positioned itself as a laptop replacement device. Example: Wall Street.

On the financial front, revenue for first quarter of fiscal 2008 was $1.082 billion, a 16.3% increase from $930.4 million in the prior quarter and a 76.5% increase from $613.1 million in Q1 last year. 2.4 million devices were shipped in the quarter and accounted for 76% of the revenue. The total number of BlackBerry subscriber accounts in the quarter increased by approximately 1.2 million.

RIM, as I expected, doesn’t seem to be hurting due to the launch of iPhone and it expects revenue in the range of $1.3-$1.365 billion and subscriber account additions in the range of 1.325-1.375 million for Q2 fiscal 2008.

The advantages the iPhone has over BlackBerry are many, the most important of them being the user friendly touch screen and Wi-Fi. The touch screen has been found to be surprisingly easy to use even with one hand. Internet browsing is also much better in the iPhone (except for the speed). And of course its sleek looks and multimedia features make it attractive for consumers.

RIM is trying to maintain its lead in the enterprise market by adding media player and Wi-Fi functions in its latest products, Pearl and Curve. This, they hope, would prevent prosumers from being tempted to move away to the iPhone. Its efforts are paying off and its stock is soaring with its current share price fluctuating close to $220, broader market weakness notwithstanding.

For a while yet, I think RIM has an excellent positioning, and the overall convergence device movement should give them plenty of tailwind.

Research In Motion Ltd. (RIMM)

This segment is a part in the series : iPhone Competitors

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RIM’s current major competitor is unquestionably Microsoft with its range of Windows Mobile devices.

RIM has long been the undisputed champion of the wireless enterprise with its Blackberry range, but with each new software spin Microsoft is catching up.

Microsoft of course builds Exchange, which currently has around 30% of the enterprise email market, plus Hotmail. It’s device range is therefore tailored to work exceptionally well with its servers and this poses a longer-term threat to RIM.

RIM strategy to counter this appears to be by extending its target market to include prosumers also. This is effectively a new market for RIM which it is attacking top-down, hence the option of new growth.

Matt Rogers Tuesday, August 7, 2007 at 8:13 AM PT

Yes, I agree that Microsoft’s Windows Mobile devices are a top competitor for RIM. In Prosumers, they will also encounter Palm as a competitor. We will talk about palm this week again, but you may have read some of my earlier coverage on Palm.

Sramana Mitra Tuesday, August 7, 2007 at 2:21 PM PT

[…] Sarmana Mitra takes an interesting look at each of the iPhone competitors. Yesterday they ran an article on how RIM is being affected by the iPhone. I found this to be a interesting read considering the fact that RIM CEO’s stated that the iPhone is helping rathing than hurting RIM. I found that Sarmana Mitra agrees with this assessment as you can see in the excerpt below: “RIM, as I expected, doesn’t seem to be hurting due to the launch of iPhone and it expects revenue in the range of $1.3-$1.365 billion and subscriber account additions in the range of 1.325-1.375 million for Q2 fiscal 2008. RIM is trying to maintain its lead in the enterprise market by adding media player and Wi-Fi functions in its latest products, Pearl and Curve. This, they hope, would prevent prosumers from being tempted to move away to the iPhone.” […]

A Look What RIM Is Doing About The iPhone | BerryReview Wednesday, August 8, 2007 at 9:54 AM PT

When I think of RIMM I think of an old movie title, “Dead Man Walking.”

The question is not whether Apple is going to steamroller them, the question is: How soon or how much time does RIMM have left? They are now on the clock.

The stock is over the top now but I think still has some room to run. However, the longer term looks pretty grim for RIMM. It’s not a question of whether to short RIMM. It’s only a question of when.

The technological hurdles RIMM would have to overcome to compete with iPhone are really major and may not be achievable.

In 3, 4, 5, or maybe 6 years they might be able to produce a phone with features comparable to the current iPhone. But then, Apple won’t be sitting still, so catching up is just not in the cards.

On the other hand, Apple just has some minor tweaking to do to make iPhone work with Microsoft Exchange. It is then sure to become a corporate darling.

RIMM is faced with nearly insurmountable engineering obstacles. Apple, on the other hand, needs to do some minor tweaking.

RIMM’s best, and perhaps only, hope is that Apple may consider the corporate market to be relatively insignificant and might not go after it aggressively.

Dave Small Wednesday, August 8, 2007 at 4:19 PM PT

Dave,

You speak like a die-hard Apple fan boy. I actually don’t think RIMM will have that much competition from Apple in the near-term. They are focused on different segments.

In the longer term, RIM’s weakness is its OS, which may not scale to support a full-fledged laptop replacement device.

Meanwhile, as I said above, for many, it is already functioning as one.

Sramana

Sramana Mitra Wednesday, August 8, 2007 at 6:46 PM PT

[…] iPhone and the Future of RIM and iPhone’s Competitors: RIM […]

iPhone’s Competitors : Synthesis - Sramana Mitra on Strategy Friday, August 17, 2007 at 7:57 AM PT

[…] up: Research in Motion: “RIM is the king of the converged mobile devices market for the enterprise or prosumers with […]

The Law of Mobility » Blog Archive » Sramana Mitra on iPhone/AT&T competitors Monday, September 3, 2007 at 10:06 AM PT

[…] with its popular Blackberry line, is the king of the enterprise or the prosumer smartphone market. With the help of its Pearl and Curve products in which it has tried to improve user experience by […]

RIM is already replacing Laptops - Sramana Mitra on Strategy Thursday, January 3, 2008 at 12:45 PM PT

I am attracted to these products. I particular, I want to be able to access and send email seemlessly while in various overseas countries. Secondarily, to receive and make phone calls from various countries to USA.

There may be other things I want that I don’t even know I want yet. As someone not familiar with these products, I would like to see an article that says what Blackberry can do that Iphone can not, and what Iphone can do that Blackberry can not.

If anybody has a link to such an article, please email it to me. Thanks.

tooclassy@aol.com

JSF Saturday, January 5, 2008 at 1:16 PM PT

great read , but i love the blackberry 8820

web design , almog Wednesday, February 20, 2008 at 4:54 PM PT

Turns out that Dave wasn't so much a fanboy as a truth teller. I loved reading this article 5 years later and comparing what was predicted to what actually happened….

Admrl Friday, March 30, 2012 at 2:54 PM PT