John Paczkowski

Recent Posts by John Paczkowski

Continental Shift: RIM Rapidly Losing Ground in North America

As an indicator of the headwinds facing Research In Motion, few are more worrisome than the precipitous decline in the company’s North American market share.

In the first quarter of 2009, RIM shipped 54 percent of the smartphones sold in North America. Now, just a few years later, it’s shipping less than a quarter of that — an estimated 13 percent in the second calendar quarter of 2011.

That does not bode well for the BlackBerry maker, says Bernstein analyst Pierre Ferragu, who views the company’s “progressive effacement” from the North American handset market as a foreshadowing of things to come abroad.

“We see the beginning of a weakness in the U.K. market, and BlackBerry might soon be in decline in other European countries as well,” Ferragu writes in a research note today, adding that his discussions with European operators suggest the BlackBerry is no longer considered a preferred mid-range smartphone.

Ugly news for RIM, because the BlackBerry isn’t exactly killing it at the high end, either. As Ferragu notes, “RIM has been completely routed in high-end smartphones.” The 18 percent share of that market segment it held in the first calendar quarter of 2010 slipped to just 8 percent in the first quarter of 2011.

And at this point, RIM can ill afford to lose on one front, let alone two. Yet that appears to be what’s happening as rivals like Apple, Samsung and HTC extend the reach of their handset portfolios to lower price points.

“We believe that the sub-$300 smartphone market will soon display an evolution similar to that of the high-end market as Apple, Samsung and HTC, which have formed an oligopoly in the high end, expand into the mid- and low end,” Ferragu concludes. “RIM’s market share has already declined 3 points from the first quarter of 2010 to the first quarter of 2011. We expect RIM to lose a further 5 points of market share by 2012 as the oligopolistic players extend their domain.”

RIM reports results for its second quarter Thursday afternoon after the bell.


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik