Even as smartphone sales surge around the world, Research In Motion continues to founder. The one-time kind of the mobile enterprise posted its third consecutive quarterly loss in September, and its share of the U.S. market has winnowed to a paltry 1.6 percent, according to new data from Kantar Worldpanel ComTech. Analysts have piled on this week, with CNBC’s Jim Cramer reiterating his sell rating and Morgan Stanley’s Ehud Gelblum dismissing the upcoming BlackBerry 10 platform as “too late.”
I think it’s too early write RIM off, however. In fact, as the company gears up for January’s unveiling of its new platform there are a few important factors in RIM’s favor:
- Carriers still matter. RIM has shipped BlackBerry 10 devices to roughly 50 operators, and as All Things D’s John Paczkowski wrote last week some of those operators seem to be impressed with the new platform. As I’ve written before, carriers still hold the key to selling smartphones because of their marketing muscle and vast distribution chains. (RIM knows this very well from its experience with the BlackBerry Curve, which Verizon Wireless helped to become the top-selling handset of early 2009.) So if some major carriers make it a priority to push RIM handsets, those devices will sell.
- The mobile enterprise is still largely untapped. I know that the BYOD (bring your own device) revolution has led to an influx of Android and iOS devices in the enterprise, and it’s virtually impossible to find an executive who doesn’t carry some type of smartphone. But a new forecast from IDC predicts business spending on mobile devices will pick up in a big way over the next few years as those organizations struggle to manage a wide variety of gadgets. IDC believes Apple will be the big winner here, but RIM’s expertise in messaging and security could help it regain a foothold fairly quickly – especially if Microsoft fails to reach that market with Windows Phone 8.
- BlackBerry has a presence in emerging markets. RIM has increased its focus on emerging markets as its dominance here in the West has eroded, and that strategy is paying dividends: The company surprised Wall Street analysts in the third quarter by adding 2 million new subscribers, largely in regions such as Africa, the Middle East and Southeast Asia. RIM has a chance to grow its user base in those markets with more affordable devices as it targets users in Europe and North America with high-end gadgets running BlackBerry 10. That’s a strategy that Nokia is using effectively with its line of $99 Asha handsets even as it struggles to sell Windows 8 devices in the West.
- RIM has money in the bank. Recent losses notwithstanding, RIM was able to bolster its cash position slightly in the latest quarter, giving it $2.3 billion in reserves. That bankroll not only ensures RIM can stay afloat for a while, it can buy the kind of big-budget marketing campaign that will be necessary to push BlackBerry 10 into the mainstream.
It’s clear that the odds are still stacked firmly against RIM turning things around: Apple and Google come to dominate the market of smartphone platforms, and Microsoft’s mobile operating system is getting yet another push with the release of Windows Phone 8. And RIM will continue to lose more ground in the coming weeks as the holiday shopping frenzy reaches its peak. But BlackBerry 10 is only two months from hitting the market, and there are a few big reasons to be optimistic. If I’m a shareholder – or a mobile app developer – I’m not giving up on RIM just yet.