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Bubye, RIMM. And not soon enough.

RIM should rename the BlackBerry to iBerry, because as Apple would say, the iPhone is going to iBerry you.

Apr 09, 08 - 10:18 am Comment from: Jubei

Now thats scary. Usually the guys are always rootin tootin for RIM. Guess its going to change big time with iPhone/Touch 2.0!!

Apr 09, 08 - 10:31 am Comment from: Cubert

From kings of the hill to scrambling plebeians.

Apr 09, 08 - 10:35 am Comment from: Ade Clarke

Research In Motion - and that motion would be... out of the window!

Apr 09, 08 - 10:49 am Comment from: Crazylegs

Myopic analyst. The market is too big for iPhone to "iBerry" RIM. Pay attention to the facts and don't get wrapped up in emotion. I've never understood Mac fans vitriolic reaction to other products. Even if you believe iPhone is the best thing since sliced bread, it doesn't mean everyone on earth will have one - consumers love choice. After all for how many years has the Mac platform offered a superior experience to windows but maintained an extremely low market share? And this is only now just starting to change. Ride the wave of the smartphone adoption curve and own both stocks. The next 5 years will be a wild ride for both BB and iPhone.

Apr 09, 08 - 10:55 am Comment from: Crazylegs

Also, where was MDN after RIM reported their last quarter? I was expecting a headline:

"Beleaguered RIM posts anemic growth of 100% earnings and revenues in FY 2008."

It never came, and it won't for some time to come. Look at the facts. Study the facts. Divorce yourself from your emotions. If you can do that (and I doubt many readers here are capable of this) you would see how RIMM has vastly outperformed AAPL over the last few years. This will continue...ride the wave.

Apr 09, 08 - 10:56 am Comment from: MacMan

@Crazylegs:

".. it doesn't mean everyone on earth will have one."

Actually, it does. There can be no real competition because Apple has patented the hell out of the iPhone- so they can't really copy.

The analogy to Mac/PC is enlightening- only your analysis is wrong: Apple screwed up on major 2 counts with the Mac:

- they priced it way out reach (the iPhone is actually cheaper than many Blackberrys) and

- they licensed away key elements of the Mac OS to Microsoft allowing them to make a poor (but much cheaper) substitute.

Seems to me that Apple has learned these lessons VERY well and are on the road to World Domination. The only people not enamoured with the iPhone are women with long fingernails. Eventually they'll be about the last people on the planet not using an iPhone.

Crazylegs,

I don't agree.

Of course RIM won't disappear overnight, but from June onwards I predict that their sales will slow down considerably.
When the Blackberry loses the one advantage it has over the iPhone, all the many advantages the iPhone has will put it in a class of its own, and will become almost everybody's first choice.

Time, of course, will tell; but I believe the iPhone is going to be a much bigger hit in the future than the iPod has been up till now.

Apr 09, 08 - 11:15 am Comment from: Think

@Crazylegs

Yep choice. The PC nerds need something with lots of buttons.

Actually RIM can stay around and share the phone market with Apple. Both at 50% would still be huge for Apple for many years. Plus good competition hopefully.

@Crazylegs
"After all for how many years has the Mac platform offered a superior experience to windows but maintained an extremely low market share?"
I believe there are different factors playing in the cell phone market vs the PC Market, mainly t who makes the decision to buy a cellphone are not a small group (IT) but mostly the decision is made by the consumers (the same reason why the Berry became popular in the first place)

So IMHO things could turnout to be different

Apr 09, 08 - 11:28 am Comment from: Buster

Yes Apple will gain ground on RIM but I think only so much. Apple's gains will be coming mainly from those other. lost in space, losers, Palm, Nokia, etc

"from June onwards I predict that their sales will slow down considerably."

Exactly. They're not going to vanish, they're just going to stop growing. A company with a customer base of that size will last for another decade or more before it fades away.

-jcr

Last Chart SJ showed was 28% iPhone, 43% BB, this Qtr. one hopes news is coming Apr 23 which might reveal updated %s, sort of like a horse race. The BB already can be considered as a dumbed down iPhone for people who like buttons and function with two thumbs. If Apple can come up with a gadget that does all that BBs do, and more, at comparable prices, RIM will be in problems, particularly if Apple can get coverage in backwaters like Canada. No sign of that, so RIM has the field to itself, with addicted users yet.

How much additional functionality will the next quarter bring to the iPhone and what will the market implications be? And what new markets?

Apr 09, 08 - 12:06 pm Comment from: Big Al

RIM is not Microsoft, it's a real competitor with a good product and millions of fans. Yes crackberry addicts are fans too.

Apple's iPhone does not yet do e-mail as well as RIM's Blackberry does. There is room, in a billion plus handsets per year universe, for both companies to be successful and grow.

The Apple - RIM phone competition will be good for both companies and phone users everywhere will benefit from it.

As for the others, Nokia, Sony/Ericsson, Palm, a few Asian manufacturers and Microsoft will find themselves in a world of hurt in a year or two.

there is a problem with crazylegs post. You mentioned that the mac has maintained a low market share. Not to nit pick, but maintain implies they are stagnant. They are growing at twice that of the industry. Mac isn't really competing against windows. They are competing against dell, hp, Sony, and toshba.

And when a growth stock like RIMM stops growing (or grows slower than previously expected), then its stock is going to take a major hit before settling in at a lower price. Same is true if Apple were to stop or slow down its pace of growth; this is reflected in the hit Apple stock takes from fair-weather shareholders when the iPod or iPhone is projected to show growth below prior expectations.

The difference is that most people have little confidence that RIMM will innovate its way to new growth, whereas knowledgeable Apple shareholders have growing confidence that Apple will not only innovate in the cell phone space, but that it has many more avenues for innovation and growth (i.e., new industries/markets to enter).

The truth is that iPhone and the Blackberry are going to make Ballmer laugh on the other side of his face as they wipe out Windows mobile....

We need to support RIM.

Either buy an iPhone or a Crackberry.

ANYTHING but Windoze 'Mobile'.

Apr 09, 08 - 01:00 pm Comment from: Crazylegs

Wow, lots of good responses, I'll address them one at time:

Macman - again, everyone on earth will not have an iPhone, no matter how much you love it. choice, choice, choice. also, how is iphone cheaper than most blackberries? i can get a curve or pearl for free on amazon. i can get a $10 BIS plan on tmobile. consumers look primarily at upfront device cost anyway instead of doing a TCO calculation.

Gavron - study the market. you'll see how much both can grow over the next 5 years. we'll have to wait and see but growth isn't slowing down anytime soon for either.

Xavier - missed the point, i wasn't comparing the two markets - point is that regardless of superiority of one's product, there are many other factors that affect ultimate sales. i firmly believe iPhone will be larger than anyone understands, but users will choose what works for them. and to think that what works awesome for you has to work perfectly for everyone else is silly.

MacVernon - historically look at mkt share and tell me if it's low or not. looking forward, no doubt the Mac platform will grow mkt share, but it took the unix core and intel chips along with continued crappiness from windows to get here.

mark - how do you know there is little confidence that RIM can't innovate? you think the 9000 device is the reason? too myopic. what is truly misunderstood about RIM is the value they have in controlling the network presence of the device. the only manifestation of this is the email service. in time other applications will emerge and the true value will be understood.

hey, i know this an uphill battle in this forum, but you would be well advised to add RIMM to your AAPL holdings and come along for the next few years when the adoption of smartphones explodes. good luck watching RIMM fall apart over the next year, if you guys are so sure why not short the heck out of it and put your money on the line. i'm long RIMM and AAPL and despite my happiness with AAPL's performance over the past three years, I'm ecstatic about RIMM's significant outperformance.

Right on.

RIMM is not about to fall apart because Apple has a good competing product.

We WANT competition, it spurs innovation and mitigates stagnation.

This IS a Mac fan site, I understand that, but we need to guard against treating every Apple competitor as an enemy.

Except Micros**t that is.

@crazylegs: good responses. i'm with you that RIM will be around for a long time but i think Apple and Nokia will capture most of the smartphone handset sales growth.

RIM did innovate with the early Blackberrys in terms of functionality and UI but i really haven't seen anything in awhile. the smaller handsets are nice but lack innovation. (when Apple simply changes the form factor of an iPod, i don't see that as major innovation either). maybe you've seen something that i haven't?

as for the network service (push email and blackberry servers), again, there was innovation in the beginning but i haven't seen any innovative functionality added. they've been small improvements on the margins but haven't branched out into additional business services (or consumer-oriented services). yes, i agree that this service is RIM's real jewel, but how big is the moat around it? to date, it hasn't been breached but will most people settle for good enough on push email, thus, relegating RIM to a business niche? (and if this is the real jewel, should RIM exit the handset business and sell their service on handsets made by others?)

i don't have any comprehensive survey about people having low confidence in RIM. Needham revealed its low confidence. for the reasons above, i have low confidence. and in my work area, almost all (20-30 people) use blackberrys today but only 2 show any brand loyalty to RIM (i.e. someone who says "my blackberry is so good, i'd choose it over an iPhone with push email"). btw, 1 of the 2 is an Apple hater (never says anything good about any Apple product). when they're questioned, they just don't expect RIM to come out with something better anytime soon; that to me is lack of confidence. maybe it's Apple marketing and hype that accounts for this, but maybe not.

finally, RIM sold over 4 million units last quarter, but only signed up 2.18 million new subscribers, which means about 2 million units were replacements for previous units. since they're selling in many more countries than Apple, relatively speaking, that's not very impressive.

RIM needs to get out the door something revolutionary and radical, or they will begin the spiral. I hope they survive and compete well, as that will make the next iPhone even better. Competition is a good thing as long as it is the two best modern and quality products.

Apr 09, 08 - 04:16 pm Comment from: Predrag

I have to agree with Mark, as well as the original article. The point of the opinion is that RIMM's growth cannot be sustained, and it is a consequence of the iPhone. It's growth so far has been extremely rapid, but it has been unimpeded. Remember, iPhone has been on the market for only 9 months. It has been designed and sold for consumers, NOT for enterprise (despite some valiant efforts of shoehorning it into the enterprise). Beginning this summer, it will be targeted to the enterprise as well (RIMM's private playground). The unprecedented launch of iPhone, as well as the significant and constant addition of features to it, clearly indicates that the growth curve can only rise. BB is present in a large global market; iPhone in a few countries.

I would say, it is time to begin trimming RIMM positions and perhaps acquire some AAPL LEAPS (perhaps Jan 10 calls). As the author said, it will be very difficult to sustain RIMM's growth in the coming months (not to mention years).

Apr 09, 08 - 05:22 pm Comment from: Crazylegs

myopia is a bitch. i find it funny that everyone sees the 3G iPhone as a panacea. it isn't. it will be a cool, if not the coolest device ever, BUT Apple has to be very careful about how they approach this as there's this thing called physics that limits what one can do. to balance a huge screen, a fast processor, and a 3G radio, all of which are power hogs, could limit the near term potential if battery life suffers to the point of disappointment. I hope they figure this out, but how long has Apple been in the wireless business?

RIM has been in it for 20 years, so they bring tremendous experience to the table. Do not underestimate their focus and ability to deliver a good end user experience. in fact, doesn't anyone wonder why RIM hasn't really jumped into 3G yet. They don't do something unless it's ready for prime time. hmmm, designing market ready products with the end user in mind sounds like another great company i know of...

if you look under the hood on RIM's technology you see a few things that give them tremendous advantages. first, they use significant compression techniques which reduces bits delivered. second, their system does not require an "active"sync but a simple push of the bits required to get the data on the device. this reduces time that the radio is transmitting which increases battery life significantly. i notice a huge power drain on my iPhone when i set it to check my exchange server every fifteen minutes. all that time that you see "connecting" then "checking mail" really burns battery. third, active sync requires an incoming ping from the device, so enterprises will just love opening up their firewalls to these pings. no need for this using RIM's system.

RIM is not standing still waiting to get knocked off by iPhone. Interesting enough, no one mentioned the iPhone on the last earnings call. i found this fascinating as nokia and motorola sure heard iPhone over and over on their calls.

Now, to really drive you guys nuts I'll make this bet:
RIM's growth will actually accelerate slightly over the next year. study the mobile market closely and you will find the reasons. they'll run like they've got crazylegs! iCal it, put it on the board!

the good news is that iPhone will accelerate as well. i've said my piece, now we'll watch how it unfolds.

Apr 09, 08 - 08:16 pm Comment from: Anonymous©

@crazy, The posts before yours hardly seemed "vitriolic". More like a little happy gloating for the long underdog, Apple. Of course, I see Blackberry doing fine in the long-term. Lots of room for Blackberry to grow. However, their share price has probably gotten past where it belongs. Their PE and PEG don't seem to justify its valuation.

Apr 09, 08 - 09:09 pm Comment from: MobileAdmin

Some great posts and the usually Iphone will conquer the world drivel.

Users fail to see the huge side to the RIMM solution being the server that controls everything related to the device, from an enterprise this is a vital part. The devices are just half of the solution. Mobility is exploding, it has a business AND a personal lifestyle side to it. The merging of this is going to take awhile. If you think diffrenlty try bringing your home pc into work and expect it to function the same.

Working through the OS 2.0 beta I will say the nightmare reminder of setting up and deploying devices through a desktop. The forcing activation through itunes is smart on Apples part but ridculously long and cumbersome. Our firewall was 1st blocking the Itunes Store (needed for activation) and the actually OS loading is simply sporadic. I've averaged 3 loads before the OS installs properly. This solution is simply not going to work in the corporate world it will likely be the #1 thing they will hear about from other companies. With Blackberry there is zero footprint on a user pc and all activation is fully wireless, from out of the box to activated and working is less then 30 minutes. But hey maybe companies will just let users brick their iphones and their own their own right?

And if CrazyLegs brings up very good points about RIMM's core value to mobility - battery life. Everytimes they change and add a feature they see how it impacts battery life. ActiveSync is a PIG .. I've never had a Windows Mobile device last a full day and imagine the iphone will need some tweaking to get some power back, dim the screen etc. Battery life matters, no one enjoys a cool gadget that needs to be plugged in all the time.

And the cost part is 100% not accurate at least on the corporate pricing.

Iphone 8gb - 399
Corp voice / data - 79

Blackberry 8800 - $49 - free depending on carrier
Corp voice / data - pooled bucket - 69

Multiply that out for scale

RIMM's PR event of the year is 4 weeks away and I'm willing to wager they start laying some smack down, their last earning report doesn't make them look weak.

I think the big thing everyone is watching is when people start rolling off their current 2 year plans .. do they go with an iphone for $200-300 or the $50 pearl. Apple needs a low end device as that is where this battle is won. People want cheap technology.

Apr 09, 08 - 09:35 pm Comment from: Crazylegs

@anon - I view a <.5 PEG, 30x forward PE as reasonably priced, not ahead of itself. I believe RIMM will put up $4 this year compared to $2.25 or 77% growth FY2008 to FY2009. the street is around $3.75, so this would represent 66% growth. the valuation appears justified if they hit even the street numbers. if you look backwards it's easy to make the case it is overvalued trading at 52x LTM earnings, but as stocks are forward looking, I tend to do the same. no doubt if they come in at $3.50 or lower, the valuation will look very full. i just believe that with their global footprint and position within the industry combined with where we are in the smartphone adoption curve, RIM will produce excellent results for the next few years...

Apr 09, 08 - 09:40 pm Comment from: Crazylegs

and ditto what mobileadmin said. he gets it.

"I hope they figure this out, but how long has Apple been in the wireless business?"

This reminds me of what a certain now-former CEO of a former U.S. handset mfr powerhouse said a year before the iPhone launched. That said, Apple could screw it up the second time around and just not be good enough.

btw, I never said the iphone will conquer the world. it won't unless Apple sells a much cheaper version, and there's no guarantee that Apple will do that in the foreseeable future. All I've said is that RIM's current growth rate will slow in terms of handset sales. RIM is up against the power of the Internet on a mobile device, and the power of having a computer in a mobile device, both of which will be more evident in iPhone 2.0 and the 3G iPhone. An innovative RIM definitely could counteract that but I'm not confident enough of that to buy RIMM today. They'll have another really good quarter or even two, but after that, the market may notice, then all bets are off.

Yes, we'll see how it all unfolds.