Motley Fool Money is a one-hour weekly business-radio show syndicated to radio stations across America. The latest show features an interview with CNBC host Carl Quintanilla and our analysts discussing how Research In Motion's BlackBerry stacks up against the iPhone and Google's
Chris Hill: Don't bury Research In Motion
James Early: Chris, let me tell you how it is. In their recent quarter, RIMM looked good in every way, except actually adding BlackBerry subscribers. That's like saying everything was good about the restaurant except the food. It's slightly less dead than analysts thought, but less dead is not good.
Hill: But it does still lead the U.S. smartphone market. I mean, for someone like me who doesn't actually have a smartphone, just looking at the landscape, it's a little bit of a disconnect to see the market leader basically being dismissed by everyone.
Tim Hanson: Yeah, RIMM's CEO went on a bit of a rant on the call after these earnings …
Hill: He did …
Hanson: People are very skeptical of RIMM, for a lot of good reasons. The technology is clearly inferior to what's being offered by Apple -- the iPhone -- and the Android operating system. But he had at least one quote in that rant that was worth listening to, and it was "Because if you make these things so high end" -- talking about smartphones -- "that they're not addressable to the market, or that they're so consumptive of the networks" -- which, as we all know, are pretty strained that they can't scale -- "well, that's not what we originally designed our business for."
Translation: BlackBerry is a basic product helping people do basic things. It's not trying to be a smartphone.
And there was a fascinating article this week in Ad Age about some myths of the mobile business. And one that they pointed out was that smartphones may not end up dominating the mobile market. [Ad Age] compared them to DVRs, you know, the TiVos, those digital video recorders, which were rapidly adopted early on by people, and they got up to 30% market share really, really quickly, but then it stalled, because 70% of the people out there weren't willing to buy them, pay the subscription fee, and also just didn't really care to have that much technology in their house.
So there is an idea out there that as you go downmarket, people won't need iPhones, and that gives BlackBerry a place so they can hold on.
Early: Isn't the BlackBerry still a smartphone? I mean, doesn't that actually hurt RIMM more if the smartphone market doesn't grow quite as much?
Hanson: Well, I think it's just the price point and the service contracts. Obviously, the network point is a really interesting one I think one we've talked about in the past in this forum, which is that these networks are strained, and as people download more and more data, right now you get to pay a flat rate. You know, I pay $20 a month for my Android, all-I-can-eat data. Well, what if everybody does that, and the network can't handle it?
So what I think the phone operators are going to have to do at some point is start charging people per the amount of data downloaded, and when that happens, all of sudden listening to Pandora on your iPhone 24 hours a day stops being so economically attractive.
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Tim Hanson, James Early, Rich Greifner, and Chris Hill may own stocks discussed during the course of the weekly radio show, which airs on radio stations across America and on iTunes. To see the stocks they own, follow the links above to view their profiles.
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