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RIM has "head in the sand" vs. iPhone

updated 03:20 pm EDT, Fri September 26, 2008

Needham on RIM vs Apple

Needham and Company contributed to a steep decline in Research in Motion's share price today by warning investors that the BlackBerry creator is likely going to perform below expectations in the near future. Analyst Craig Bisagna notes that while RIM is secure in its business sales, Needham sees the company's dismissive attitude towards competitors in a financial conference call Thursday as overly optimistic and unrealistic.

The iPhone 3G and the HTC-made T-Mobile G1 are likely to boost awareness of smartphones, Bisagna says, but are too directly pitted against the Curve, Pearl and other BlackBerries to avoid competition.

"We continue to believe that the company has its head in the sand," the researcher says on behalf of Needham. "It's delusional to think [Apple and HTC] won't cut into BlackBerry sales as well, especially in the consumer market."

Bisagna explains that RIM's recent success has largely relied on the limitations of its competitors rather than any particular strength. Most of the BlackBerry line's rise has been driven by home users and the Pearl in particular, but for most of this time has only had to compete against unsuccessful Windows Mobile hardware. RIM had the home-oriented smartphone market "pretty much to itself," he says.

The iPhone was only a non-threat through the absence of full-speed 3G access and a too-high pricing, according to the report. Both have since been taken care of, while the developer appeal of the T-Mobile G1 is also cited as a potential factor. The G1 is also priced inexpensively for its feature set at $179 on certain contracts.

Multiple new BlackBerries due for the fall, such as the Pearl Flip and the touchscreen Storm, are said to potentially help RIM but aren't guarantees that Apple, HTC, and others won't affect BlackBerry market share.

The conference call held by RIM followed a mixed but ultimately disappointing summer quarter report from the company, which saw earnings spike but phone shipments fall slightly short of targets set out by investment research groups. The quarter was the first in which RIM had to compete against the iPhone 3G but only saw limited competition as the Apple handset shipped midway through the three-month period.

by MacNN Staff



  1. chefpastry

    Joined: Dec 1969



    I really believe that RIMM's best days are behind them. They did great when there wasn't much competition, but things are different now...

  1. horvatic

    Joined: Dec 1969


    RIM Bad attitude

    "Analyst Craig Bisagna notes that while RIM is secure in its business sales, Needham sees the company's dismissive attitude towards competitors in a financial conference call Thursday as overly optimistic and unrealistic".

    Craig says it all.

  1. Titanium Man

    Joined: Dec 1969


    I'm not so sure

    The texting and email addicts may still prefer the Blackberry's thumb keyboard that they can type faster on than the iPhone's virtual keyboard. Not sure how much of a market they comprise, though.

  1. saudio

    Joined: Dec 1969


    I'm so sad!

    I've been a BB user for years and have been WAITING for the BOLD to be released by AT&T. My wife has had an iPhone 3G for a month and the more I play with it, the more I love it, especially being a Mac user since the mid-80s.

    RIM has got to come up with a SYNC option for the Mac, at least, as simple as what works with the PC. The marriage of iTunes and the iPhone for updates and syncing is BRILLIANT, and that's what pulls me in more than the interface.

    I'm still waiting for the BOLD, and know I'm going to have a very difficult decision once it ships. I really hope RIM can pull their heads out of wherever it is they've them them and GET MOVING! Goliath is alive and has an Apple Store bag in his hand!!!

  1. slider

    Joined: Dec 1969


    Need to Wake Up

    If this is a correct read by this analyst, it sounds like BB is making the same mistakes as Palm. They have a product that's successful, and they think they've really got the "Best" product the could product.

    Even if the BB line was the best in its class, sitting back and dismissing the competition is just like walking into your own grave and covering yourself up.

    Perhaps their management was trying to relay a certain confidence to their investors. I don't really put any faith in analysts; I suppose that b/c I'm a Apple user and have seen their predictions of Apple totally miss the mark more often than not.

    I actually want BB to get out there and innovate, keep pushing the limits.

  1. chadpengar

    Joined: Dec 1969


    Ballmer: take note

    "unsuccessful Windows Mobile hardware"

  1. bleee

    Joined: Dec 1969


    Both good products

    They are both good products designed for different markets, yet trying to enter each others market.

    Blackberry was always designed for the business market... it's gets the job done, it's highly customizable, without all the eye candy of the iPhone.
    It uses less bandwidth than the iPhone by far. Still king of email and IM

    iPhone designed for the consumer market, still in it's infancy, not as reliable as the Blackberry, not as configurable as the Blackberry, uses more bandwidth than the Blackberry. Has thousands of applications, and allot of eye candy.

    I think it's too early to say who the winner is. I see more people with Blackberry Pearls and I do iPhones. Possibly because the Pearl is cheaper.

  1. jarod

    Joined: Dec 1969


    Game Over

    The secret behind Apple's success is that it envisioned an INTEGRATION of all its products since day 1. None of these companies has any form of integration. They're all independent products. You want a new feature, you have to buy a new phone. Not with Apple, not with the iPhone. It's all software driven, and everyone knows that Apple is the king of tech. Sure, the iPhone has a few kinks, but it's under a year old and even with all it's issues (all fixable via software btw), it has given all other manufacturers a nuclear blow with a lot more on the way. So yes, I do think that RIMM and others are things of the past.

  1. Guest

    Joined: Dec 1969



    Does one product have to be the "winner"? RIM has no one near the consumer infrastructure Apple does with Itunes and media content but people like to forget iphone primarily is another edition of the ipod not really a phone. So of course all the media functionality looks better on that device. The flip side is RIM is the best at what they do. Apple has nothing to compete with the enterprise intergration / security so unsure how much footprint Apple will ever have there without that. (Sorry ActiveSync and it's limited policies is not the same).

    RIM will be fine, Apple will be fine the real loser is Windows Mobile and their awful OS which needed an major update 3 years ago.

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