It’s on, y’all. The battle for smartphone dominance is poised to go from sideshow to the main event. And one of the warriors, BlackBerry maker Research in Motion Ltd., issued a softer-than-expected quarterly forecast on Friday that rocked the market and showed up the continuing shift in the competitive landscape.
RIM’s stock, listed on the Toronto Stock Exchange, dropped 24.6 percent on Friday, making up a full quarter of a 400-point overall plunge in the index. Investors issued a flurry of downgrades.
Delays in product launches and higher-than-expected costs were the culprits, but there was something else too: The competitive landscape is changing.
Smartphones still account for only a fraction of overall handsets in the market, but while traditional handset sales remain flat (a product of saturation), the smartphone segment is actually growing at a pretty good clip. The reasons for this include more broadband networks available to support the data-rich applications these handsets are made for, and the success of the Apple iPhone within the mass market, not just with business users. It has all caused a push by the other smartphone makers to tap the consumer opportunity, with market leader RIM releasing a flip phone earlier in September and also launching a full-scale television ad campaign focused on using BlackBerries “for life.” Even so, Apple continues to gain market share, a fact not lost on investors.
The growth of the segment, the iPhone and the buzz generated by the just-announced, consumer-targeted G1 Google Android-based device from T-Mobile USA, has thrust the smartphone conversation into the limelight. Judging from RIM’s performance on Friday, there’s not a whole lot of room in the battle for missteps.
