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« Whose On First? Its Three-Way Race with Apple, Nokia and Samsung vying for Title World's Biggest Smartphone Maker Q2 | Main | Will the Real Stephen Elop, Please Stand Up? »

June 20, 2011

Comments

simpleblob

In my opinion, there are two likely scenarios

1. The demand for QWERTY phones declined

and/or

2. Customers (especially the youth section) switched to android and iPhone, seeing those as more fashionable or capable.


Optional 3., the effect of Whatsapp / iMessage app combo supplanting the current king -- BB messenger.

Vikram

"What Happened to Blackberry? RIM reports 10% decline in smartphone unit sales for Q2? Decline? This year?"

Answer: The same thing that happened to Nokia - a bad OS.

Blackberry OS, like Symbian OS (or MeeGo) is not competitive vs. iOS or Android.

Blackberry and Nokia OS's both have the bullet-point checklist features but the overall usability and organization is poor and lacking compared to iOS and Android. You can say Nokia has this and that feature before Apple or anyone till you are blue in the face else but Symbian was good in 2005, now it is awful and MeeGo couldn't deliver. Same with Blackberry - their 6.0 and 6.1 (or 7) OS is still behind iOS and Android regardless of all the specs that they list on paper.

Software drives the smartphone and you don't have to look very far as to why Blackberry and Nokia are both slumping to various or lesser degrees: It is the same reason for both - bad software.

pk de cville

You mention business and youth as being the ones abandoning BB in great numbers...

It seems to me many 1st adopters are going to the multitouch platforms found in Android and iOs.

I think the Android and iOs numbers this qtr will be unprecedented (due to RIM and Nokia collapsing with Msft/Skype being blackballed). The continued advance of the iPad which must be cannibalizing new BB purchases with some users holding on to their old BBs for another year).

cycnus

The market have switch to android with QWERTY such as Sony Erricson Xperia Pro.

I also would add something that BB OS is really outdated as of now, and that's why they try to switch to QNX ASAP. It's too bad they didn't see this coming earlier... just like nokia.

But... as of now... I believe it's already too late for BB to try QNX. WHY???
Because RIM solution of instant messaging (IM) is only closed for RIM.
When the market just started with no competition, this is a STRONG point to buy RIM product.
But, as of now, it's not a strong point anymore.

I can buy Symbian/WP7/Android/iOS and can chat inter-platform with other phone user with YM/Google/MSN/Skype/What's app.

It's a pitty a couple year back when nokia want to join BB in their IM, they refuse. Nokia would give RIM a great $$$ for selling their E-series devices with BB IM. Now, i don't think any company would care about BB PIN anymore.

I think if BB still want to exist, maybe they should be better using android (or WP7) or even SYMBIAN, rather than going from scratch with QNX.

don_afrim@twitter

Tomi you're making a big mistake here. I have always had Nokia, and for a long time a Nokia Qwerty phone until I recently switched to an iPhone 4. At first I also thought that because I was an Qwerty addict that I wouldn't like a touch screen. I swore on the Qwerty and never even considered a phone without Qwerty but you know what not only did I really enjoy the touch screen, I would even go as far as to say that I wouldn't go back to a Qwerty phone. Thinking back it's really a waste of space to me now. I write just as fast as before on landscape mode. I saved a lot of money too since iPhones have WhatsApp Messenger, its like BBM but also available on cross platforms.

So to your theory that ex-Nokia Qwerty clients would automatically switch to BB is in my eyes not valid anymore. It used to be like that but no longer since touch screens have become so accurate to touch input. It's not a Nokia style touch screen where you had to press multiple times for it to recognize your touch input.

indy

the decline is about to accelerate because
as you always said, Tommy
The one big selling factor BB had in emerging markets/texting teenagers was the BBM messaging (No SMS costs)
Apps like Whatsapp are spreading like fire and their user base grows exponentially (Its also cross-platform)
in Q3 iMessage will be launched combining the Apple marketing machine and loyal i-fans. this could finish BB altogether in less than a year.(or existing in a Vertu type niche market, hand made for rich male executives)

gzost

The collapse of Blackberries is not really all that mysterious. They are really strong in messaging, but other things have come into focus for a lot of customers. Smartphones today are expected to be multi-talents, and for that large touch-screens are best suited. With onscreen keyboards now at a point for most people where their use does not cause pain anymore, the hardware QWERTY argument becomes increasingly weaker. No, you can't really type blind on a touch screen, or with the phone held in your sleeve, but you have more space to play, surf, watch video, and operate custom touch interfaces for apps. It's a trade-off that more and more people are willing to make. In addition to Blackberry hardware increasingly going from a reason to buy to a reason not to buy, the platform has fallen into the apps hole even worse than Nokia. There are few apps, and new things never debut for Blackberry, and hardly ever make it there in the end. While I agree that apps are not (yet) a viable market for most developers, they are increasingly a draw for the young early adopters that were loyal Blackberry customers in many markets.

cycnus

in addition to my comment above...

SMS is now dirt cheap, and this make BB IM strong point weaken.

For example.
to have BB service here in indonesia cost between US$ 8 - US$ 15 / month.
but to have unlimited SMS cost less than US$ 3 /month.
...not to mention semi-unlimited internet starting from US$ 3* /month for NON-BB user such as symbian, android, iOS, WP7 user.
(*for US$ 3, got a 500MB internet, and speed will be lowered once hit 500MB).

BB is not majority, so the BB user would be use SMS too, to reply to non-BB user.
So, it's better to go full SMS, rather the combination of BB/SMS.

Mikko Martikainen

Other's have made really good points already, and I too believe that the market is changing fast and a physical qwerty keyboard is a necessity to less and less people today. It's just my gut feeling, though, we'd really need up to date research to see if the trend is indeed going down. I think you posted before that about 35% would not consider non-qwerty phones, do I have that right? But if qwerty is going down, that could explain at least part.

Another thing also mentioned is that the BB OS is really unsexy right now. However, QNX has the chrome, so to speak, so perhaps some people have decided to put their BB purchase on hold to see if they come up with a decent QNX phone (unlikely, given their public statements, but not everybody knows it.)

Yet one additional explanation to account for a small portion of the "hole" you calculated might be that some people forgo a smartphone purchase altogether and get a tablet instead. That's not going to be a big number, I agree, but if it were the case for 10% of tablet buyers that could explain around a million missing smartphones.

But, overall and once again, it's the software that makes or breaks a platform. There is a big shift underway, and regular people have a lot more power now than just a few years ago. That means that people buy what they want, not what's forced on them. You talk about the power that the carriers have over the market, and it is undoubtedly great, but the balance of power is shifting. It's no longer enough to be the sweetheart of the carriers, you have to win over the end users as well. And the converse is also more and more true: people are willing to go to great lengths to get the handset they desire, regardless of what the carriers offer. It seems that RIM is losing or already has lost both. It doesn't look good for them. I'm sure you've read this many times before, but it's still very relevant: http://mobileopportunity.blogspot.com/2010/10/whats-really-wrong-with-blackberry-and.html

Will Finley

Although you alluded to it, the channel has the power to sway market share from one brand to another. Heretofore, Apple and Blackberry where the only brands that could more or less control the channel. Apple continues to hold this power, but BB power over the channel has eroded due to the lack of pull from the market. Youths are abandoning BB because of limited functionality beyond messaging and the higher cost. Small and Medium Business will be the next to go (if they already have not) as BB contracts expire and users convert to more open systems. I would suggest that large corporations will be the only hold-out for the BB.

Pablo

RIM is on its way to being a software unit within another company.

They could probably pull off independence if they moved quickly to market BES to large email providers (Yahoo!, Google) and carriers. But management ego won't allow this, so the software side will be sold and the rest will go away.

Beware of CEO's, even very successful ones, who start trying to buy sports teams.

PCB

Where did Nokia sales go? Where did BlackBerry sales go? Where did 2million Apple costumers go.

The answear is: They are waiting for the new Nokia WP.

Could indicate sales of 20 million WP phones for NOKIA Q4 2011

former n900 user

I must agree with what others have already pointed out here. RIM is failing because of the exact same reasons as Nokia. The software can't compete anymore with the big ecosystems of Apple and Google. In contrast to RIM, Nokia has already understood, that they have no other choice but to make a dramatic shift or become obsolete in just a few years time.

It will be interesting to see, what RIM will do. As Nokia they have very limited options. I tend to agree with Pablo. RIM probably will get sacked. But hey, maybe they will also join the WP7 ecosystem ;-)

former n900 user

One more thing. I really enjoy reading your blog, because you have a very clear opinion of things and stand up to it, which I respect a lot. However, I am often astonished, that you almost NEVER take something like "consumer satisfaction" into account of your considerations. It's all about prices, carriers, anouncments, market share etc. These are important factors, but especially in the case of Nokia you totally ignore the fact, that the consumer satisfaction of Nokia smartphones has taken huge hits in the recent years. You just have to browse Nokia-forums or blogs. They are full of "NEVER-EVER-A-NOKIA-AGAIN" statements. This is definetly an important factor for the Nokia decline and another reason why their shift to WP7 was inevitable.

Boris

Well, one thing is sure - Galaxy SII's sales are huge, and Samsung can't manufacture them enough to satisfy huge demand, and it's not even released in many markets, like American. It's not only top sold smartphone in many markets, it's top sold mobile phone!

JukkaM

Mikko has something here, namely shift from a smartphone to tablet. I have read a few blogs where people have swapped their smartphone to Nokia or other dumbphone after getting an ipad. Even I got myself the first dumbphone for years after getting myself a dumbphone.

Who will be the first to create a dumbphone, which canfunction as a wifi hotspot, has a nice niche. Such phone would make a perfect companion for ipad and if it costed less than €100, the difference of 3g and wifi ipad, it would make economical sense to the consumer too.

KPO'M

Not only is RIM hampered by a bad os, their hardware is underpowered. Witness how the Bold 9900 was delayed so that they could retrofit a faster CPU. That requires engineering effort, not least of which to keep battery life acceptable. People are demanding things from their phones that the old generation of processors just can't handle.

seo optimization

Wow, this was a really great post! I enjoyed reading it and although each point was short and to the point...

sexy bikini

I always use NOKIA celphone as it was most convenient and duarable.

kevin

Tomi,
Last year when you predicted iPhone had peaked, I disagreed and predicted here that Nokia and RIM were fading instead. Both have come true; the numbers showed it then, and neither company has released a successful smartphone (in the class of iPhone and Android). In 4Q09, RIM peaked in annual sales growth at 19.6%. Where RIM had previously been growing and taking Nokia share, it had stopped by 4Q09. (With it's latest release, it should be down around 14% when 2Q results are released.) RIM continued increasing its unit sales (but at a rate less than the market) thruout 2010 but had to lower ASPs in order to do so. In RIM's case, it went overseas to increase unit sales of cheaper phones with lower ASPs. And in 2011, that strategy has now placed it squarely in Android's target market. So Apple drove RIM out of the perceived high-end, and Android is cleaning up at the lower-end of the smartphone market.

In sum, a shift has taken place. Most people in wealthier countries fundamentally no longer think QWERTY-based phones with half-sized screens with poor UI and poor app stores are true smartphones, because one can do and consume so much more (beyond messaging/SMS/MMS) with apps. So the number of people who still want these phones is rapidly shrinking, especially in the wealthier markets.

As for Apple, I think it will again increase its annual market share this quarter. Apple grew annual market share last quarter; it's now up to 16.7% from 16.0%. (Apple has never lost annual market share from quarter to quarter.) Apple still distributes via a relatively small but growing number of carriers. Apple has yet to see shrinking ASPs. Apple has a new model coming in less than 3 months.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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