RIM Unlikely To Recover From Decline

Late last week RIM announced that it saw huge losses last quarter and its next generation BlackBerry 10 won’t ship until 2013.

RIM’s outlook doesn’t look that great, and Asymco has some numbers and charts to back it up. Back in 2007 RIM was in a comfortable second place in overall smartphone shipments, with Nokia riding high at the top and Apple just starting out. Since then Apple’s numbers have skyrocketing while RIM and Nokia saw little growth before a dramatic decline.

The peak for RIM was two years ago in mid-2010, just before Samsung’s Android smartphones took off. Since then RIM dropped from shipping close to 15 million units a quarter to 7.7 million last quarter. In the same time Apple went from shipping 20 million iPhones to about 35 million iPhones per quarter, while Samsung jumped from around 10 million smartphones to more than 40 million this quarter.

Adding to RIM’s woes is the company’s average revenue per smartphone shipped. The company currently makes about $309 per BlackBerry shipped, which is much less than Apple’s close to $650 per iPhone.

According to Asymco there are three conditions smartphone companies need to meet to have success, and RIM meets none of them. Those conditions are:

  • consumers trust the platform’s promise
  • operators see the product as creating value to their core business
  • developers offer investment to innovate on top of the platform

By letting the BlackBerry platform stagnate while iOS and Android ran away with the market RIM lost consumer’s trust in the platform and the developers’ desire to innovate on the platform. When’s the last time anybody was really excited about BlackBerry before BlackBerry 10?

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RIM tried to make the BlackBerry platform interesting with devices like the Storm and Torch, but neither phone was very good. Now the company is in a tailspin that no other company has ever gotten out of. The Waterloo-based company has negative operating margins, and when that happens the options are usually to sell the company or to flail around enough is hopes the company dies faster.

  

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