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How Badly Is Android Rattling RIM?

How Badly Is Android Rattling RIM?

Android continues to shake up the smartphone world, raising the question of what toll its rise may be taking on Research In Motion's BlackBerry platform. Some analysts suggest that sales data spells trouble for BlackBerry and RIM in the future, though with RIM's enterprise sales roots, retail data might not paint a complete picture.

By Richard Adhikari
12/14/10 10:39 AM PT

A flap has arisen between ITG Investment Research and market intelligence blog Asymco over data regarding Verizon, Android and Research In Motion sales figures.

Android's strong showing is killing off the RIM BlackBerry, according to an Asymco analysis, based on a report from ITG Investment Research.

However, Verizon has "three strikes" against it, Asymco said, seeming to take issue with ITG's figures. One bone of contention centers on ITG's reference to a "monthly sales record," which Asymco misinterpreted, according to ITG.

ITG was referring to "unit sales, i.e. a monthly record OF sales -- we're not forecasting RECORD sales, i.e. record-breaking," J.T. Farley, vice president of investor relations and corporate communications at ITG, told LinuxInsider.

Another problem arose over Asymco's initial implication that ITG might have been wading into troubled legal waters by compiling a forecast based on insider information. However, ITG said its forecast was based on point-of-sale data at independent wireless retailers across the United States -- not information leaked from Verizon.

"To be clear, we do not misappropriate or improperly obtain nonpublic information," Farley said.

Asymco has updated its blog with a clarification on this point.

Death Cab for RIM?

Verizon sold a total of 3.3 million smartphones in Q3, up from 2.7 million in Q2, Asymco stated. However, AT&T sold 5.7 million iPhones in Q3, up from 2.7 million in Q2.

RIM -- and, to an extent, Verizon -- may be in trouble, said Asymco, because the BlackBerry platform doesn't offer an ecosystem like Android does.

"The sheer number of Android devices out there is impressive," Will Stofega, a program director at IDC, told LinuxInsider. "They've got all the big vendors supporting them. Especially Samsung, which can do soup to nuts -- it has semiconductor fabs, screens, everything."

That puts RIM at a disadvantage, but RIM is looking to QNX, the Unix-like real time operating system RIM acquired when it purchased QNX Software earlier this year, Stofega pointed out.

However, ITG's figures -- as translated by Asymco -- may not reveal the full picture.

"Is ITG telling us it has an electronic tie-in to every Verizon retailer? That would be a bit of a problem for the retailers," Stofega asked. "Even the big investment banks don't have a hook-in into all the POS systems at wireless retailers. They have channel checks and have to go to the stores."

Taking Care of the Business

Further, RIM's traditional stronghold has been in the enterprise and government markets, where the iPhone and Android phones haven't got much penetration.

That changes the picture when it comes to claims that Android sales are crushing RIM. Stofega said RIM continues to remain strong in the enterprise market.

Further, he said, corporate purchases are made direct from the carrier, not from retail outlets, which means ITG's figures are suspect.

"Why would an enterprise buy anything from a retailer?" Stofega asked.

In addition, RIM's seeing demand for its consumer devices such as the BlackBerry Torch, and is doing quite well with consumers overseas, especially in developing markets, Stofega pointed out.

"I was talking to someone in Indonesia, which is seeing a huge influx of people buying the lower-end RIM devices," Stofega elaborated. "They love the BlackBerry Messenger as a means of communication."

RIM's seeing "very good takeup" in developing markets, Stofega said. "Remember, in these countries, not everyone can afford to go out and buy a high-end smartphone," he added.

RIM and Verizon Wireless did not respond to requests for comment by press time.


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