RIM Has Lost The War For Consumers

Analyst says Research In Motion has fumbled its smartphone strategy so badly that it no longer has a chance of competing in the consumer market.

Eric Zeman, Contributor

May 27, 2011

3 Min Read

That's it. It's over. RIM's perpetually stale lineup of BlackBerry smartphones has cost it the consumer market, Wunderlich Securities analyst Matthew Robison said. He thinks RIM's inability to respond effectively to Apple's iPhone and Google's Android smartphones has negated all the growth it experienced between 2005 and 2008.

"We no longer anticipate Research In Motion recovering to participate in the mainstream of smartphone industry growth," he said. "Our long-term forecast anticipates a role supplying business-oriented devices, both midrange and high end, as well as cloud-based services via the BlackBerry Network. We expect the consumer mix gained over the past two years to churn off, and that earnings will decline after 2013 and eventually grow again on demand that is largely associated with business users."

Ouch. In other words, RIM did a great job pushing into the consumer market for a few years with its low-cost Pearl and Curve smartphones, but its insistence on bringing incremental updates to its smartphones isn't enough to keep that momentum going.

Robison believes that most consumers who have adopted BlackBerrys in recent years will switch to the platforms offered by Apple and Google, which have richer hardware and a wider selection of applications available for them.

Interestingly, Robison thinks RIM still has a future as an enterprise device supplier. While it is true that RIM's enterprise systems are top notch and its handhelds do a good job at providing secure access to email and other corporate data, that hasn't stopped businesses and governments from dropping BlackBerrys for iPhones and Androids.

Even more interesting, Robison said he thinks RIM has a shot at being successful in the tablet space with its PlayBook. "On the positive side, we believe the PlayBook continues to sell well relative to tablets other than the iPad, with minimal returns," he said.

"However, shipment rates have waned since initial volume from those that had been waiting for it. There is little indication that the PlayBook has registered with consumers outside the loyal BlackBerry installed base."

There's no question that RIM is stumbling about. It has barely introduced any new models during 2011, focusing instead on the PlayBook. Personally speaking, I can count a dozen people from my social circle who have switched from BlackBerrys to Android devices in the last year. The number of business associates I know who've done the same is much larger.

It's hard to find fault with Robison's assertions. Can RIM turn things around before it's too late?

Recommended Reading: RIM PlayBook Sales Forecast Sliced 23% RIM Rebuts Bad PlayBook Sales Report RIM Sells 250,000 PlayBooks In First Month RIM Recalls 1,000 PlayBook Tablets RIM Working On Bigger BlackBerry PlayBook RIM Adds iPhone, Android Support See more by Eric Zeman

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About the Author(s)

Eric Zeman


Eric is a freelance writer for InformationWeek specializing in mobile technologies.

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