Friday, March 23, 2012

RIM loses to iPhone in Canada; brand loyalty only goes so far

As we all know, loyalty only goes so far. In the case of RIM and its BlackBerry handsets, brand loyalty in its home country of Canada has fallen by the wayside.

Data compiled by market research firm IDC and Bloomberg show that in 2011, RIM trailed Apple and its iOS devices badly. RIM, which is based in Waterloo, Ontario, Canada, shipped 2.08 million BlackBerrys last year in Canada, while Apple shipped 2.85 million iPhones.

Although it was clear from global data that this day was coming, just a year prior, in 2010, BlackBerrys outsold the iPhone by 500,000 units, and further back still, in 2008, one year after the first iPhone was released, BlackBerrys outsold iPhones by nearly 5 to 1.

RIM was slow to react to the iPhone, so slow that not one but two competitors released iPhone rivals while RIM is still basically sitting in second gear. Both Google (Android) and Microsoft (Windows Phone) are far ahead of RIM's next generation smartphone OS, and Android has surpassed iOS globally.

Paul Taylor, a fund manager at BMO Harris Private Banking in Toronto said,

“For RIM, in its home market, to lose that No. 1 position to iPhone is strategically important. It does identify, even with a home-country bias, how consumers are responding to the greater functionality of the iPhone."

That said, BlackBerry still has fans in government entities, and in many emerging markets. For example, in 2011, in the Middle East and Africa, RIM shipped 8.3 million handsets to Apple’s 2.5 million iPhones. RIM did even better in Latin America, where it outsold Apple by an even larger margin, 10.6 million BlackBerry handsets to 2.1 million iPhones.

Cellular Country
In addition, its secure, encrypted BlackBerry Messenger feature is one of the reasons that customers in Europe still find the BlackBerry useful.

RIM's next-generation mobile OS, BlackBerry OS 10 (BB10, based on QNX) won't be out until late 2012. Odds are the company will continue to bleed, or even hemorrhage subscribers until then --- or longer.

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