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Shocker: RIM Has More Problems

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Research In Motion (NASDAQ: BBRY  ) just can't catch a break.

A recent mobile workforce survey found that only 5% of respondents are expecting to stay loyal to the BlackBerry maker. Call me crazy, but 5% doesn't sound like enough interest for the King of Berries to stage one of the greatest comebacks in today's tech world. Bear in mind, this is only the end-user side of the equation.

In August, IDC found similar findings with developers -- the ones who drive innovation for the platform. Over 5,500 developers were questioned, and a mere 9% said they were "very interested" in BlackBerry apps. That number has fallen 31% since the last time developers were questioned.

Unless you've lived under a rock for the last two years, you wouldn't need a survey to know that RIM has been losing market share in a mass exodus kind of way. According to Gartner, RIM has lost over 68% of its market share since 2010. Being that RIM has only 5.3% left of market share to spare, this situation has grown more serious, but it could be a whole lot worse.

Despite the decline, the subscriber base has actually increased in size -- by 2 million last quarter. Subscribers have become a lifeline for RIM because they mean recurring revenue from carriers to help support the BlackBerry network. Last quarter, subscribers accounted for 35% of total revenue, essentially buying RIM enough time to release its next operating system, BlackBerry 10, due out early next year.

It's tough out there
RIM's late-in-the-game turnaround comes at an inopportune time. Microsoft (NASDAQ: MSFT  ) and Nokia (NYSE: NOK  ) have joined forces to take third place away from RIM. Together they have deeper pockets and enough determination to make Windows Phone 8 a threat to be reckoned with. RIM used to rest easy in knowing that its enterprise business was well insulated from the Apple (NASDAQ: AAPL  ) iCraze, but evidence is mounting we've reached the iTipping point.

According to IDC , enterprises are ditching their CrackBerrys for more iCool "in droves." The report predicts by 2016 Apple will dominate the space with 68.9 million shipments. It went on to say that Google's (NASDAQ: GOOGL  ) Android will not establish a sizable enterprise market share because its ecosystem is fragmented, leaving "more gaps in security than many organizations are comfortable with." Unfortunately, IDC shares the collective opinion that the Blackberry ecosystem lacks consumer and developer appeal, which "hinders its viability going forward."

Better late than never?
The smartphone market isn't the Wild West anymore. I'm not saying RIM stands zero chance of success, but what makes it any different from becoming another Palm, Symbian or MeeGoo? For all those history believers out there, RIM's trajectory is strikingly similar to when Palm reached its eleventh hour and bet the house its WebOS platform. We all know how well that went.

Research In Slow Motion
Make no mistake: RIM faces an uphill battle in the coming year. Its long-term viability hinges on the successful release of one piece of software, BlackBerry 10. For the time being, subscribers will keep the ship afloat, but if upgrades fail to retain them (as the surveys suggest), things will get ugly fast. The competition has intensified, the majority of consumers have moved elsewhere, and RIM is running out of time to reclaim its seat at the table. When the music stops, will there be any RIM left for discussion?

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Read/Post Comments (8) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 14, 2012, at 5:34 PM, digitally404 wrote:

    Ok so... 5% are expecting to stay loyal to blackberry. How many are expecting to stay loyal to iPhone? Samsung? We need more numbers to compare.

    A 31% decrease of 9% of "very interested" really means that the "very interested" group dropped only from 13% to 9%. And what about the "somewhat interested" ? Shouldn't that matter too?

    Anyone can prove anything with statistics. And questionable surveys.

    Oh, and with the rate at which the smartphone market changes, any market share forecasts into 2016 are essentially useless.

    What an embellished article. Full of logical fallacies. Thanks for the laugh.

  • Report this Comment On December 14, 2012, at 8:20 PM, BB10WCE wrote:

    Yah, Motley, please site your sources. Thanks.

  • Report this Comment On December 14, 2012, at 8:29 PM, BB10WCE wrote:

    Hey info that help, I am a BB user and plan on upgrading to BB10. Its hard to find other BB users these days its true, but in North America most of us BB users will upgrade to BB10. We had numerous chances all year to get free Galaxy III and 99 dollar Iphone and have been waiting for BB10. Its more of a tool for the elite so I do not expect it to get above 10% marketshare for awhile.

  • Report this Comment On December 14, 2012, at 8:39 PM, Backdooruser wrote:

    Apple's Iphone 5 is an obsolete kid's toy with very little security. I spenrt 15 years of my life as a Warez hacker, testing websites and mobile devices for security flaws. The only smartphone I would use for buying and banking anywhere is the Blackberry. Research In Motion's Blackberry is the only Smartphone for those in business and Government who care about a high level of security.

    Think twice before you put a credit card number on an Android or Iphone.

  • Report this Comment On December 14, 2012, at 8:56 PM, ronbeasley wrote:

    Idiotic, out of touch and out of date.

  • Report this Comment On December 14, 2012, at 10:53 PM, GAdams13 wrote:

    Buy Nokia before it's too late!

  • Report this Comment On December 14, 2012, at 11:30 PM, mirra88888 wrote:

    Predicting market dominance in 2016 is the most ridiculous thing. In 2007, most people would have predicted that Blackberry would be the dominant phone in 2012. Doesn't this feel ridiculous today?

    I am an iphone user and I will wait to switch to BB10. From what I can see BB10 would be much more functional for me and my business. Any app I use is business related. I am sure BB10 would have anything I need.

    I was a blackberry user and switched to iphone because I got fed-up wiIl blackberry's contentment with themselves. They lost me and most of their customers for lack of innovation in the last couple of years, however, I think BB10 is a game changer for them. Specially for business people like myself. I like my iphone but I find it not as reliable and business friendly as blackberry. I lost my contact twice on my iphone, saving anything on icloud is a very false security.

    When I switched from my blackberry, I got galaxy first and did not like it at all. I bought iphone and was happy with it's uniqueness. BB10 has improved in many ways. It is even more unique than iphone in my opinion and has better functionality for my business. The security and reliability is also great.

    Motley's Fool, Forbes , Cramer and most analysts are like viruses of the mind. You keep repeating and forcing your own one-sided agendas. People want information, they want both side of the story to make their own decision. Bringing all the facts to the table is important.

  • Report this Comment On December 15, 2012, at 2:47 AM, silverthenewgold wrote:

    RIM poll from TheStreetcom "RIM Poll: Will You Buy a BlackBerry 10 Device?"


    108,765 = Yes – I can’t wait to get my hands on one. (99%)

    417 votes = Maybe – but I want more technical details and pricing information. (<.05%)

    472 votes = No. (<.05%)

    RIM has more mobile network operator relationships than Apple does. RIM has relationships with ~565 carriers to Apple's ~227 out of a possible ~800 carriers.

    The Author and MotleyFool are all for Apple so it's no wonder why there is so much RIM bashing. Note also that Apple looks like it will fall below $500 next week.

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