A Blackberry off the RIM

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When we think of the smartphone market the first two companies that come to mind would be Apple and then Samsung, and rightfully so, since this is where the major competition is. The third is usually Research In Motion (RIM), known for the creation of the Blackberry, and they are about to release another one. According to the Wall Street Journal, the good news is that there will be “mostly positive reviews, increased investor confidence, and RIM’s biggest marketing budget ever for a product rollout.” But the bad news is that it will face a “much more competitive market where Apple and Samsung have rocketed ahead in market share and sales. The two also have much more cash than RIM to maintain their leads, meaning RIM may no longer be fighting to be a smartphone leader, but rather to simply keep a place at the table.” The launch will begin when AT&T starts to sell the Z10, one of the two Blackberrys running on RIM’s new Blackberry 10 operating system, according to the Wall Street Journal. They have also said that this will be at about the same price as the competition, which will create a head-to-head environment. One executive from RIM, their chief marketing officer Frank Boulben, has expressed optimism for the launch. “Our objective and that of our carrier partners is that very quickly we emerge as a strong number three. I expect to see a lot of excitement in the coming days in the U.S. market”. Indeed, their power has diminished more than significantly. The Wall Street Journal reports that their share of the U.S. smartphone market has fallen from close to half in 2009 to only 5.9% (they may not even reach 5% worldwide by the end of 2016). RIM has used lavish spending in an attempt to counter this with a lot of promotional materials for their most recent product, again according to the Wall Street Journal. An analyst from Gartner Van Baker has had something to say about RIM as well. “They’ve got an attractive device and a good operating system, but ultimately for them to succeed they’ve got to get some excitement and buzz in the consumer segment again, and it’s an open question whether they can do that. I don’t think they have any chance of getting back to where they were, but if they can get 5-6% market share, ultimately that’s a successful business model for them”. RIM is not expected to match Apple or Samsung for market heft or sales, even with all its lavish promotional spending. Even if they could match the competition their “window for grabbing attention may be closing. Last week Samsung unveiled its latest Galaxy smartphone, the S4, at a lavish event in New York”. According to Macquarie Securities analyst Kevin Smithen, many people, who were considering the Z10 were impressed with the S4. So now they may delay their Z10 decision until they can evaluate the S4. RIM may be facing an all-ornothing situation sooner than they would like.

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