Anyone Who Says the iPhone is Killing Blackberry is an Incompetent Fool - its Android that is Killing RIM

Is it September already? Gosh, time flies in the Bloodbath. And the first Q3 results came out already, from RIM the maker of the Blackberry. And Blackberry is indeed failing miserably now in the global race for smartphone leadership. Failing miserably is putting it kindly.

The numbers. RIM reports that Blackberry sales were 10.6 Million for Q3 of 2011. How bad is that? Their sales are down 20% from Q2. This in an industry that is growing 59% in just one year. This is the time of hypergrowth. You can do hideously badly in this industry this year, and still grow sales. And yet, Blackberry sales fell by 20% from Q2. And they fell 8% from Q1 to Q2 - so the decline of Blackberry is increasing. They are going from bad to worse.

How's that in the Bloodbath? My preliminary market share estimate for RIM, at 10.6 Million units is 9% market share for Q3. How bad is that? Just 15 months ago, Blackberry's market share in smartphones was 18%. So literally in just over a year, they have lost half of their market! This is not bad. This is not hideously bad. This is catastrophic. This is so bad, it would be a world record for a handset brand loss in smartphone market share, were it not for Nokia's even bigger crash this year (see Elop Effect). Yes, Blackberry is now in the running for who crashes worst this year, and that race is between only two brands in smartphones - Nokia and RIM. That is truly a definition of horrid business performance.

Now, to the headline of this blog. This is a great test you, the reader, can have of ANY so-called 'expert' in mobile, or any article written about mobile and smartphones. Anyone who says or writes 'Blackberry is losing because of the iPhone' is full of bullshit. Note, it is fair to say, the RIM/Blackberry tablet, the Playbook, is losing to the Apple iPad. That is fair. But anyone who claims Blackberry the smartphone is failing 'because of the iPhone' is an incompetent fool. Immediately lose all trust in that person or organization (or media source). They are parroting a wive's tale, a myth. Here are the facts.

When the iPhone was introduced from June 2007 to September of 2009, Apple grew iPhone market share from zero to 17%. During that time, Palm and Windows Mobile suffered severely, so it is fair to say, the iPhone was killing Palm and Windows Mobile. What happened at RIM over this period? Blackberry grew from 12% to 21% market share in the same period. So, when the iPhone grew massively, so did RIM. There was no cannibalization of the Blackberry by the iPhone when we witnessed the strong growth of the iPhone.

What happened since Q3 of 2009? Blackberry fell from 21% to 9% today. So, how did Apple do? The iPhone has managed a growth of... two points of market share, from 17% back then to 19% in Q2 (the latest quarter for which we have data). Meanwhile Android was at 2% in Q3 of 2009 and was up to 45% by Q2 of this year. So who ate Blackberry's cake? Not the iPhone, it was Android.

If your 'expert' says that RIM is losing to Apple because the iPad is killing the Playbook. That is fair. If your 'expert' claims that Blackberry is losing to Android, that is true. But anyone who claims that the fall of the Blackberry is in any way due to the iPhone, has not even looked at the data. When the iPhone grew, so did Blackberry. When the Blackberry fell, Apple was almost flat. When there was no Android, Blackberry grew, but when Android came to the scene, that is when Blackberry started to free-fall. It is not the iPhone that is killing the Blackberry. It is Android.

Just a little tip here from your faithful Bloodbath-reporter. Just watch how many journalists, analysts, tech-bloggers, pundits and other so-called 'experts' parrot the myth about Blackberry death being due to the iPhone, and make your own judgements about their trustworthiness. This is a complex, difficult and fast-moving area of smartphones. We need facts, we do not need nonsense and myths.

I will be monitoring the Q3 results in the smartphones bloodbath, as usual. Next up should be HTC now in September. Most of the big smartphone brands will then be reporting in October. Stay tuned..

Comments

[Vikram]

Yup, totally agree Tomi, Android is killing RIM especially among the consumer side. I would argue that iPhone has started eroding RIM on the enterprise side - but only very marginally - but I expect that to accelerate over time.

I keep arguing this point with Tomi, but RIM's drop is due to the same reason as with Nokia and with Window's Mobile - an inferior OS. BB OS, Symbian and Windows Mobile were very inferior experiences vs. iOS which "inspired" Android and that is what killed them. Android spread like wildfire because it was superior and was free for the other 3rd party manufacturers who couldn't build an OS in the same class as iOS, which Android is, and was the closest thing to the iPhone that was accessible and affordable to the masses.

[cycnus]

I think that RIM should provide their plan B & C now.

Assuming their plan A is QNX OS,
their plan B should be RIM android devices with BBM.
and their plan C should be only the BBM software for Android, WP7, iOS and quite the hardware manufacturing.

[Jeez]

See Tomi. This is exactly what would have happened to Nokia with Vanjoki.. both were incompenent with their own software and can't build a strong ecosystem around tablets/clouds/entertainment/everything.

Nokia will be in a great position with WIN8 tablets and WIN8 phones. Believe. RIM will join Nokia eventually.. they are already heavily in bed with MS.

[kevin]

It's not clear to me why your headline is what it is, because it is simplistic and misleading. As equally simplistic and misleading as if someone said the ONLY reason for BB's decline was iPhone. Clearly, obviously, today the combination of Android and iPhone is killing BB at all price points and phone types of the smartphone market. And today's RIM news could be foreseen as far back as June of 2010 in my responses to your iPhone obituary, though like you, most industry and financial analysts couldn't see it.

As Baron95 pointed out, iPhone on AT&T in 2007 started BB's decline, altho it was masked by BB’s growth on the other carriers (who stressed BB in order to compete for attention against the iPhone). But when the other carriers, especially Verizon, gave Android marketing support (support that used to be given to BB) in winter 2009, then that decline began on the other carriers. BB tried to escape by going international, but Android and iPhone, started to turn the tide on BB even in those countries by mid 2010. In the US, Verizon got the iPhone earlier this year, and in another month, Sprint will as well, so BB will take another beating.

So BB overshipped at the end of last year when it boosted shipments to 14.2m and 14.9m, in a desperate attempt to outship iPhone, having been “taunted” by Steve Jobs. The channel was stuffed, and now RIM is cutting shipments while still trying to sell lots of older inventory at reduced prices (like Nokia). Inventories have doubled to $1.37B on RIM's balance sheet.

In any case, iPhone really won’t kill any vendor simply on sales volume since it is supply-constrained as Piot notes; however, it will kill off vendors by sucking up most of the profit. By using its brand, cross-market (iTunes, iPad) expansion, and the large media interest, Apple is seducing/forcing vendors to divert R&D effort and funds to building an ecosystem, software (plus cloud) platform, and related non-smartphone devices; most of which are not core competencies for most of these vendors. RIM diverted its A-team to create the Playbook and unwisely spent additional effort on music subscriptions; talent and energy that previously would’ve been assigned to developing and releasing new updated smartphones more frequently.

Subtly, over time, the market has changed, and stuck-in-the-past pundits have obscured it and made it even harder for vendors to see it quickly. Trying to catch up from their late start, these vendors try to zig to where Apple is or was, but as they head there, Apple has already started to zag in still another direction. That's how Apple is doing the killing.

[marv08]

Oh boy. Tomi, I expect better than that.

What were people buying BBs for? Email, email, email - and some teens for BBM (free messaging).

The first iPhone did not support Exchange/ActiveSync, it did not support push and it did not support MMS. So, how likely were BB users to go for an iPhone? Right. Not at all.

Since iOS 3 and 4 Apple has the best Exchange support in the industry. Multiple Exchange accounts, hardware encryption, remote wipe, MMS, free administration/deployment tools. Everything is there for 0% of the BB Enterprise Server's cost. No Android phone comes remotely close, and not even WP7 is yet fully competitive. And iOS 5, due out within less than a month, will also bring free messaging between iOS devices (all of them) and (this is a rumor) maybe even computers.

Yes, the iPhone was not targeting BB users when it came out (and your 2007 through 2009 number correctly reflects that), but just extending that timeline and saying "it must be the same now" is not sufficient at all. Yes, Apple's market share did only grow 2% after 2009, but we do not know at all, how many customers Apple lost to Android (because of the AT&T situation in the US, limited carrier deals in major European countries, only being on an also-ran carrier in China, not offering 4G, etc.). This figure can easily be north of 10%, and it would require a lot of BB customers to fill the gap, which is now 12% in this example. I do not know the exact customer movements, but neither do you.

I am not saying that iOS is stealing more BB customers than Android - I simply do not know that. I do know, that there are people moving from BBs to iOS though. I do not really believe in anecdotal evidence, but I certainly know more than 20 former BB users that moved to an iPhone, and maybe 5 that went to Android (plus 2 that moved back to a feature phone plus iPod touch for cost reasons). All of them in the last year. Apple is stealing BB customers, and calling people idiots spreading "nonsense and myths" when your only argument is outdated data... does not really convince.

[karlim]

Damn, Tomi, it is sad to watch your self destruction

Anyone can be excused for mistakes about iPhone, though Leebase Kevin and Baron95 were spot on that stuff - the ones of the very few here from those days

First I thought it was some sort of Elop hate that was destroying you. But this post shows that it is much deeper then that. It seems that any real world events that are contrary to the model of the world you constructed make you lash out. And call people names like "incompetent fools full of bullshit"

Well, those incompetent fools just decimated your argument about BB and iPhone in comments, and you still did not bother to reply to a single one of them despite your twitter floods in the past 2 days. As you did not bother to reply to a single comment to your previous "Why carriers hate Skype post".

It is your blog, you are not getting directly paid for it and all, it is your hobby, so you can do whatever you want with it. But there are some people commenting here,with a hope of discussing things with you, expecting your reply, who still believe your promise that you will reply to every single comment. Nobody made you make that promise, you did it yourself, multiple times, publicly. You said that you will and are replying to every single comment on your blog.

Have you checked your comment reply ratio on your blog lately? Haven't counted exactly, but my impression is that in the last 3-4 months you have replied to no more then 20% of comments on your blog. And less then 50% of comments that came in the first 48hrs, before your published first reply. So please stop promising everyone a reply - it is a blatant lie at this point.

Getting back to your analysis quality, and the sources you use as beyond any question of credibility for your psychopath Elop rants, what do you think about the fact that even Intel is abandoning Meego? That great OS that was supposed to save Nokia, but Elop killed?

What about Microsoft over Skype boycott, when every carrier is getting ready to push and subsidize WP Mango phones, and some of them - AT&T, Orange and soon T-Mobile are already doing that. What about HTC launching two new Windows Phones for holiday season? They do not international launch events before they get string carrier support. How does that play into your Skype boycott theory?

And about that Symbian boycott. If Nokia did not have a profit warning already-what are the chances that they will do as bad as you think? And talking about Symbian boycott-I haven't seen you acknowledging Gartner numbers for Q2 that showed that Nokia smartphone sales to end users were much better then Nokia reported and the problem was inventory push in q1 to carries all along?

What if Nokia reports an OK Q3? All your anti-Elop theories seem to be collapsing already.

[Peter]

@tomi, iphone is killing BB in USA (enterprise sector), bankers/real estate agents/government officials are all switching from BB to iPhone; Android is killing BB in Europe (consumer sector).
That's fair competition.

But Nokia is different story. It is Elop who was hired by US short sellers to kill from inside. Symbian consumers are immune from US media propaganda and its agencies. Thats why they put Elop as Nokia CEO under the guise of MS Trojan Horse. Actually he is the ciminal who has to be tried and put into prison neighboring with Madolf, Key Lay.

[Peter]

@karlim, "What if Nokia reports an OK Q3? All your anti-Elop theories seem to be collapsing already."
are you dreaming ? by which criteria, you think nokia will be okay for Q3 ?

It will be much worse than Q2 if you exclude the money transfer from MS which is illegal.

[karlim]

"are you dreaming ? by which criteria, you think nokia will be okay for Q3 ?"

Oh @Peter, and all the rest Nokia/Elop conspiracy theorists, why do you make it so easy? :)

I was talking to Tomi, and asking about his Nokia Q3 projections - 12.9 Symbian smartphones shipped.If the numbers were really that bad - we would already had a profit warning.

So anything for Nokia in smartphone shipments above 13.5 million would be OK compared to Tomi's projections and your conspiracy theories

[karlim]

@Peter

And I love your disagreement with Tomi over BB. So iPhone and Android is killing BB for some reason (crap OS I guess). But Nokia's crap Symbian OS was immune to that and it is criminal Elop who is killing it.

Care to elaborate on this big difference between BB OS an Symbian?

[Jukka]

Android is doing what MeeGo was supposed to do. Linux-based, relatively open for everyone, fit for smartphones+tablets+netbooks. MeeGo arrived too late to this party. Android had already eaten MeeGo's lunch. Two years ago MeeGo/Maemo was still ahead with hte N900, but then they did not move fast enough and blew the window of opportunity.

[apollo_dev_team]

It's hard to believe that Tomi himself who wrote this blog.
I guess there must be a hacker hacked his blogs account and wrote this to sabotage his credibility and analytic quality.

But if it was Tomi himself then this is no longer different than a parody of mobile industry analysts, in addition of the Elop's hates and couple of (funny) conspiracy theories.

[Petrer]

@apollo_dev_team . @Karlim,

it is not conspiracy theory. it is day-robbing from US short sellers. man, who has eyes can see it except you guys who are so blind. you 'd better donate your eyes to those who are born blind !

[Peter]

@apollo_dev_team . @Karlim,

it is not conspiracy theory. it is day-robbing from US short sellers. man, who has eyes can see it except you guys who are so blind. you 'd better donate your eyes to those who are born blind ! instead of writing crap comments to waste resources.
it would be pathetic if you are hired to spread "conspiracy theory" to cover the day-robbing.

[Peter]

@Karlim, BB is crap since day 1, Symian is number 1 since day 1 that's the difference. Wall street bankers install BB's enterprise services to boast RIM's stock day-in day-out. using its controlled media to spread BB's addiction. it is not BB addiction, it is wall-street money addiction which distorts everything till Steve Jobs's Iphone comes to the stage. WS can not cover crap BB for ever. WS reluctantly to switch to apple initially till today it accelerates the process after it boast BB's stock price to $145. then short sell it to $22.

WS has no love of Steve Jobs nor iPhone but the fiat money it creates from thin air.

It is a pity tomi knows nothing about WS financing. so his mobile analysis can not hit the point most of the time.

Symbian is different. it doesn't rely on US market so US media propaganda lost its influence on Symbian consumers. without US so called enterprise market, BB is dead. nokia can still keep it as number one mobile phone sellers.

That's why they hire Steve Elop to kill nokia from inside under the guise of MS trojan horse. He is not MS trjon horse. He is commiting crime from day 1 like he sold macromedia within 3 months after he was promoted as CEO. Steve Elop is professional destroyer of WS hired criminal.

He has no clue about software, marketing, management, execution.

He is much worse than previous management team.

Now we all know why.

Steve Elop is on US WS short sellers mission to destroy nokia from inside.

[Titanium]

maybe Peter's theory is a little bit exaggerated but points to the right direction: Elop mission is to do MS (or Wall Street if you like more) interests.

1) defence:
Kill MeeGo beacause if it eventually have succeded it would've been a very big treat to MS. And not only for mobile but for the whole OS market because after the server market already dominated by linux if also the mobile market would be dominated by linux (a true linux not that surrogate that is android) then we would've seen a contagion also to the nascent tablets market, IVI etc... till the Desktop and Enterprise (where actually MS make its moneys)

2) conquer new markets:
kill Symbian to make room for Windows Phone

People who hate Elop hate him because they understood that the new strategy wasn't necessary to save Nokia but for the long time MS interests.

Nokia could've been saved just with a better execution. Look at N9 and at the new Symbian Belle: they are very close to android and iPhone and probably definitively better in other six month. But they took too much time, a sign of not competitiveness in SW. So I agree that some big change was necessary to regain competitiveness, but losing their independence was a too high price.

Even the new strategy could have been executed in a more sane way. Why on hearth a CEO has to do that infamous Burning Platform memo? That memo haven't helped Nokia in any way. Contrary it made enormous damages to Nokia.
Could a CEO don't understand that? No, so the only explanation is that he made it intentionally to justify an otherwise unneeded and too suspicious change in strategy.

Without that memo today Nokia would have been in a better position capable to regain a good market share autonomously without becoming a MS slave.
Now the best for Nokia is a miracle on the Symbian front and a cold WP front

[TDC]

It looks like BB is pretty much going down very badly do you guys think Nokia+Microsoft will be able to capture their enterprise market. With Microsoft's already well proven enterprise products like office and exchange I think IF Nokia+Microsoft execute well they could decimate BB in this domain...

[フェラガモ 靴]

I think that RIM should provide their plan B & C now.

Assuming their plan A is QNX OS,
their plan B should be RIM android devices with BBM.
and their plan C should be only the BBM software for Android, WP7, iOS and quite the hardware manufacturing.

[alan]

while subject is provocative, too much of apple fawning in comments section ! If you are so much into it, buy it stocks and just shut up. Its irritating to see every article, comments section biased towards it. Spend some of that time in loving your family !

[LED street light]

Recently had the news, intelligent mobile phone manufacturer RIM company are going to reduce its BlackBerry Playbook its BlackBerry tablet computer costs, and the company also seems to be for the money will ever much-anticipated tablet computer products to bring some new update, for example the new Video Video stores, etc. Microsoft