This page has been archived and commenting is disabled.
Blackberries Lost More Market Share Than We Bearishly Anticipated While RIMM's Share Price Spikes: Is It Time To Revisit the Bear Thesis?
We have updated our mobile OS and handset manufacturer market share
model and will make it available to subscribers as an online app by next
week. In the meantime, let’s review some of the findings – vendor by
vendor. First up is Research in Motion. This was a profitable short in
2010, with the share price hitting our targets within 100 pennies. Since
then, the stock has risen appreciably. Let’s take a look to see if the
rise was justified.
Page 5 of our Research in Motion forensic analysis (released in the summer of 2010 - 
RIMM Forensic Analysis and Valuation – Professional & Institutional or RIMM Forensic Analysis and Valuation – Retail)
clearly stated that while we expected RIMM’s handset shipments to rise
as a result of a rapidly expanding smartphone market, it will lose
considerable market share. For the sake of those who do not subscribe, I
will excerpt that page here:
As it turns out, it appears that we were erred slightly to the
optimistic side with an 18% market share estimate for 2010. By the end
of the 3rd quarter, RIM has fallen to 15.3% according to information
calculated from IDC, and its decent has accelerated far faster than even
we (the bears) have anticipated – a full 350 basis points for the
quarter. This is 6x the decent of last quarter and 7x the decent of the
quarter before that. It is quite safe to assume that they will be
materially below this point at year end (the data that we crunch is
lagged by a quarter). This market share loss is most assuredly caused by
the outsized growth of Android, which I will demonstrate in a minute.
Below are charts generated from an updated version of the subscriber
document 
Smartphone Market Model – Blog Download Version:
As you can see above, for the full year of 2010 RIM has trailed
smartphone market penetration growth and that trail has increased each
and every quarter with the rate of decent rapidly increasing.
RIM’s share price has benefited from an increasing equity market as
well as the announcement of new products. The Torch, although possessive
of redeeming new qualities, is essentially still a generation behind
Apple and 1.5 generations behind Android. See RIM Smart Phone Market Share, RIP?…
As you can see, from a relative perspective, the Torch is:
-
- relatively underpowered with an anemic processor
- relatively sparse in the RAM department
- less resolute in its display WITH a smaller screen
- compromised in its video capabilities
- less endowed with i/o and radio functions
- equipped with a small battery
Of course, one cannot adequately judge a
phone from a spreadsheet. You really have to use it for some time to
get a real feel for what it can do. Even so, the “Crackberry” addicts
even take issue with it. If your own fan base can’t support you, you
have a problem. Here is a review from the Boy Genius website. Go to the site and peruse the comments to get a feel of the Blackberry owners perspective.
The Blackberry tablet is, at this time, still vaporware. Although it
does appear to have some strong technical advantages, RIM management has
shown that they have yet to grasp the inner workings of the current
mobile computing paradigm shift, and they are losing massive amounts of
market share as they attempt to learn. I am not optimistic on their
being able to right the RIM ship before either Android or iOS become a
de facto standard. Again, let’s reference output from the
professional/institutional subscriber Smartphone Market Model:
More Reggie Middleton on Research in Motion
- There Is Another Paradigm Shift Coming in Technology and Media: Apple, Microsoft and Google Know its Winner Takes All
- After Getting a Glimpse of the New Windows Phone 7 Functionality, RIMM is Looking More Like a Short Play
- RIM Smart Phone Market Share, RIP?
- Android is gaining preference as the long-term choice of application developers
- RIM Smart Phone Market Share, RIP?
- Many More Black Eyes for the Blackberry? A Complete Forensic Analysis of Research in Motion
- The BoomBustBlog Multivariate Research in Motion Valuation Model: Ready for Download
- advertisements -
It will be *years*, if at all, before the security framework on the Android and Apple devices is anything near what RIM offers on the BlackBerry. Not to mention that increasingly price-conscious consumers and businesses are rapidly awakening to the reality of extremely high bandwidth charges associated with the Android, Windows7, and iOS-based devices.
Its not hard to appreciate, however, that the author of this report, dissing the BlackBerry, often based on irrelevant technical factors (see circled things above), isn't on the front lines either as a user or an administrator of these devices, and hence, isn't exposed to the reality-based decisions of [i]why[/i] people have BlackBerries. Applying the same logic as he applies, Honda and Toyota are also in grave trouble because Mercedes has improved their market share over the past number of years, even though, we know this isn't the case.
So, are you disputing that Blackberries are losing marketshare and underperforming the overall marjet's growth dramatically? At the end of the day, you have to sell the devices to monetize them. If competitors sell more than you do, and the market matures what does tha entail?
Reggie, the thing which is missing from this analysis and to be honest all your apple-bashing analysis is the cool factor.
On a Scale of cool - apple>android>blackberry
or in other words cool>nerds> suits
Until apple stops impressing the cool kids Apple will reign supreme, Android will ALWAYS be playing catchup and RIM will continue to lose market share until its only users are in the corporate area. Why is Nokia on a downward spiral? it stopped being cool when apple released the first iphone.
Like you in your analysis Android users go on and on about what the iphone can't do. None of that matters to iphone users, now or for as long as Apple is the coolest brand. Because at the end of day the majority of people want to be with the cool kids.
Regardless of the insider selling, Steve Jobs health Apple will continue as the market leader and for that reason imho a strong Buy because of one word. Cool.
Don't confuse "cool" with MSM perception of hip. Think of the group U2. Once a new alternative group appealing to a small group of truly "cool" kids. Then the mass marketing gang came in and made every regular Joe and Jane thing they were "cool" because they too listened to U2. When in reality the truly "cool" kids were long gone onto something else.
Once it becomes mainstream, it's not "cool". Actually, just the opposite happens and before you know it, everyone is laughing at your perceived "coolness" while you flaunt your iGadgetry.
I guess if you are short RIMM again we will have to endure months of nauseating threads again.Go back to fitting Ball thru circle.
With apologies, I could not resist posting this. It has too much in common with "type ahead" GDP, fiscal and earnings forecasts we are seeing everywhere. Maybe this is the "new normal" random words that result in humour and we all know what we mean really, most of the time.
heh!
Mom again?
ugh a whole bunch of embarassing type ahead pics of i-phones didn't appear..sorry guys!
I was on the other side of your berish outlook on RIMM all summer.
Until Barack Obama and the majority of the top CEO's of the world trade in their Blackberries, the Blackberry name will stand.
Tech companies (IBM and Apple) in the long run, always seem to pull a rabbit out of the hat just when you think they are done.
Your fundamental expertise is better spent on banks and all things macro IMO.
So you were the one I made my profits from. Thanks!