It has been no secret that BlackBerry (RIMM +2.58%) is essentially facing a do-or-die situation with the release of the BlackBerry 10 OS and the Z10 smartphone. Having fallen from a position of complete dominance in the smartphone space, the stock has imploded, and sales have dried up. The new iteration of BlackBerries must bring the company back to a level of even fringe relevance, or it's not likely to survive.
While the greatest focus of BlackBerry's struggles to remain afloat are primarily focused on the competition for third place with Nokia (NOK 0.19%), it's worth considering whether the demise of BlackBerry would be of any meaning to Apple (AAPL 0.17%) or even Google (GOOG +3.57%). In the long run, unless BlackBerry explodes back into the limelight, I do not see its existence having much impact on the big two; in the immediate-term, however, the interplay between BlackBerry and Nokia has some significance.
Might BlackBerry fail?
Initial reviews of the new BlackBerry line have been mixed, but they have not been disastrous. As with any new product release, there are highs and lows; the general consensus seems to be that BlackBerry may yet have a chance. The biggest negative from the release was the fact that the new devices will not hit U.S. shelves until March .
Why Apple & Google might care
Given the relative market shares of the various smartphone makers, it would be easy to dismiss the roles of either BlackBerry or Nokia as essentially meaningless for either of the big two. According to research firm IDC, Android commands 68.3% of the global market, followed by iOS at 18.8% and BlackBerry at 4.7%. A different source has BlackBerry down to 3.4% in the fourth quarter, and under 2% in North America . After Apple, the other two make barely a ripple in the overall market mix.
The reason that the big two might care if BlackBerry is driven out of the market is that as long as BlackBerry and Nokia are fighting each other, that's where the conversation remains focused. Once the battle for third has been cleared away, it will be far easier to see real comparisons being made between the number three and the other two. Also, as soon as either Nokia or BlackBerry takes aim at Apple and Google, the push for features and functionality being developed by all three are more likely to see enhanced competition.
Another area of impact is with the wireless carriers. Under the duopoly model, subsidies have remained high, and control has rested largely with the manufactures . If the market is opened up into a three-way battle, the interplay with the carriers has the potential to change significantly .
Lastly, pertaining more specifically to Google is the fact that if Nokia becomes the definitive third player in the market, it may be better positioned to take on the cheap end of the smartphone market that Android thoroughly controls. While rumors continue to swirl about a cheap iPhone , Google owns this market segment for now. If Nokia, for example, can gain enough credibility to focus on competing up, the entire market dynamic may change.
Why Apple and Google ultimately won't care
Over the longer term, it should make very little difference to either Apple or Google who they have to compete with in the number three spot. There was little chance that the smartphone market was going to remain a duopoly forever. The fact is, by Apple's own admission, that China is becoming an increasingly significant driver of growth, and new players are entering the market from that part of the world means that things are in a state of significant fluctuation.
If either Apple or Google care about BlackBerry's demise -- which is far from being a forgone conclusion at this point -- it will be as an object lesson. BlackBerry once owned the market and fell out of favor for failing to keep up with developments in technology. The company is a cautionary tale of how to kill the golden goose.
The investment framework
The market was clearly displeased with the latest delays from BlackBerry in releasing the new Z10 in the U.S., and they showed that displeasure by driving down the stock on the announcement. I see little impact to either Apple or Google from the BlackBerry news, but Nokia definitely stands to benefit. If you're looking for a catalyst from the news, Nokia continues to look like the best bet at current levels.
