RIM Closes 2007 With 10% Of Worldwide Smartphone Market - InformationWeek

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12/20/2007
02:23 PM
Eric Ogren
Eric Ogren
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RIM Closes 2007 With 10% Of Worldwide Smartphone Market

RIM saw yet another year of strong growth in 2007. It will finish the year as the world's No. 2 supplier of smartphones, behind only behemoth Nokia. RIM is going to have to do better outside of North America if it wants to keep it up.

RIM saw yet another year of strong growth in 2007. It will finish the year as the world's No. 2 supplier of smartphones, behind only behemoth Nokia. RIM is going to have to do better outside of North America if it wants to keep it up.The numbers, courtesy of ABI Research, say it all. RIM's share in the smartphone market has steadily increased in the last five quarters -- from 7.2% in 3Q 2006 to 9.5% in 3Q 2007. They say slow and steady wins the race. I don't know if RIM can ever make a real dent in Nokia's or Symbian's strangleholds on the worldwide smartphone market, but it can sure try.

There's no doubt that RIM's strategy of making consumer-friendly devices has had an impact on the company's reach. I see nonbusiness types using the Pearl and Curve, both more prosumer than enterprise devices, everywhere I go. Why? They're solid phones. And for highly connected people, they provide fantastic access to personal e-mail via RIM's BlackBerry Internet Services.

These models aside, RIM also has revamped its entire enterprise lineup. It now offers smartphones with better music players, on-board GPS, and Wi-Fi. These are appealing features for any phone shopper. It's also able to keep average sale prices higher than its competitors. ABI Research estimates $345 as the ASP of RIM handsets in 2007, which is substantially higher than the overall industry average of $248 for smartphones. The growing popularity of RIM's devices indicate that consumers and carriers are willing to support higher priced handsets, if the feature set is right and the device is executed well. So far RIM has done well. Really well. But it has to do better.

RIM's success story is concentrated in North America. Users in faraway lands continue to choose Symbian-based devices instead. ABI Research industry analyst Shailendra Pandey said, "In addition to operator partnerships, RIM needs to grow both its R&D and manufacturing capabilities to expand and increase its presence in markets beyond North America and Europe. Considering the growing opportunities in the Asia Pacific region, a manufacturing and R&D presence in India or China can help RIM in shipping more devices and reducing overall costs."

RIM needs to keep the pace of innovation moving forward briskly. It also wouldn't hurt if it updated its user interface (which has remained largely unchanged over the last several years) in the near future. If RIM can continue to provide good features on phones that are more intuitive to us, then there's no limit to where it can go.

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