I suppose it was inevitable. As Android and iOS devoured RIM’s marketshare in the US, Canadians maintained their patriotic loyalty to the Waterloo-based Research In Motion. On home soil, RIM’s BlackBerry smartphones held their ground—yes, marketshare was dwindling, but RIM always retained its top spot.
However, times have changed. New data reveals that RIM, a pioneer of smartphones in the early 2000s, no longer holds the crown in Canada.
According to research jointly conducted by IDC and Bloomberg, RIM shipped just over two millionBlackberrys in 2011. Apple, meanwhile, shipped nearly three million. This is a stark contrast to just one year prior: in 2010, BlackBerry outsold Apple’s smartphone by half a million units.
And at one point, it wasn’t even a contest. In 2008, RIM outsold Apple five to one. The tables, obviously, have turned.
Retaining the number one ranking in its home country is—or was, rather—significant for RIM on multiple levels. BMO Harris Private Banking fund manager Paul Taylor called the reverse milestone “strategically important,” noting that consumers abandoning a home-grown product paints a very clear picture.
But it’s not just about perception, or patriotism, or emotional appeal. The numbers are just as, if not more, vital. Canada counts for roughly 7% of RIM’s revenue—certainly not an insubstantial amount. The problem with that? Those sales dropped 23% year-over-year.
It’s not as bleak as in the US, where sales tumbled 45%. But it’s concerningly higher than the worldwide average of 5.9%. Can RIM get away with growing emerging-market sales while losing everything its built in North America?
RIM, one of Canada’s biggest companies ever (particularly when its stock was $140, not $14), was a true innovator—years ago. Now, with that reputation stained by numerous follies, its brand is falling apart.
BlackBerry slipped two spots backward to 54th in Interbrand’s 2011 ranking of the world’s top 100 brands. Apple, on the other hand, jumped nine spots to crack the top 10.
It’s plain to see that in order to reverse its fortunes, the Waterloo tech titan must eradicate the negative sentiment developing around it. But, as BMO’s Paul Taylor notes, this is a definite “challenge.”
RIM’s share price is down 90% from its 2008 high, and 75% from last year’s high. And even at this seemingly rock-bottom low, with a price-to-earnings ratio of just three, the stock is being shorted like crazy. The pessimism appears dauntingly infinite.
With zero debt and billions of cash in the bank, RIM is far from down and out. But the negative momentum has become a tremendously large obstacle. With baited breath, the world awaits BlackBerry 10—it’s apt to make or break this fragile Canadian legend.
Photo: Financial Post