updated 02:35 pm EDT, Fri August 1, 2008
BBerry Squeezed Out at ATT
Research in Motion and its BlackBerry smartphones on the verge of falling out of favor at AT&T in exchange for the iPhone, says an investment note from Credit Suisse's Kulbinder Garcha. The analyst notes that RIM's share of smartphone sales at AT&T, which have crested at 70 percent in June, are unlikely to remain at such high levels and instead are more likely to drop as AT&T shifts the brunt of its promotion to the iPhone 3G. The touchscreen phone remains a strong seller three weeks after launch and has already seen AT&T agree to heavy subsidies to help push its sales where BlackBerry devices are strictly in line prices at other competitors.
While not committing to a definitive estimate for the scale of the decline, Garcha believes the loss of marketing effort will be tangible enough to ultimately cost RIM its overall influence and hardware sales, even with the expected high-profile launch of the touchscreen BlackBerry Thunder in the fall and a sales boost forecast to give RIM 55 percent of smartphone sales at Verizon.
About 25 to 30 percent of RIM's phone sales hinge on AT&T, the analyst says.
RIM's BlackBerry Bold smartphone has already been touted as a carrier exclusive in the US but caters more to the Canadian firm's traditional office worker audience than the Thunder, which lacks the BlackBerry's signature QWERTY keyboard.
The company is also thought to be a victim both of a limited market and of itself. While growing rapidly, the smartphone industry is said to be growing relatively slowly, expanding by a relatively modest 64 percent in 2009, and will face shrinking profit margins on its devices as it faces price cuts or else rising product costs in order to stay competitive.