BlackBerry U.S. Market Shares Drop; RIMM Plummets

It’s no news that Research in Motion [RIMM] and its BlackBerry platform has been struggling to compete against Apple’s iPhones and Google’s Androids.

But according to a new report released by Kantar Worldpanel ComTech on Tuesday, BlackBerry has hit a new low. Its market shares have shrunk to 1.6 percent in the U.S., ultimately sending its stocks to drop more than 10 percent at the close in New York.

This was a substantial backwards step for the Canadian company who saw recent gains in equity markets in the last three weeks – which had increased more than 35 percent this November.

RIMM shares’ recent increase was largely due to the company announcing that it would launch its highly anticipated BlackBerry 10 on January 30th 2013 – after a year long delay.

But the optimism that had spread in recent weeks quickly turned after investors saw the long hiatus as a sign of irreversible doom.

The new market data shows that the company’s market shares have dropped 6.9 points over the last 12-week period ending on October 28th, while Apple’s shares have more than doubled to 48 percent. Android market shares have increased to more than 46 percent.

But that wasn’t the only note that helped weigh down the stock.

Morgan Stanley analyst Ehud Gelblum released a note on Tuesday stating that the BB10 might be doomed for failure. “We continue to believe BB10 has a low chance of success,” quoted him saying in a research note.[1] “While some of the new features on BlackBerry 10 seems innovative, we have a similar reaction to Palm’s WebOS when we saw it at CES in 2009.” Deeming the stock “un-investable in the near-term,” Gelblum maintains his underweight rating and $7 price target.

RIMM’s competitive advantages such as push email, BBM and battery life are slowly being eroded away. And BlackBerrys’ unsuccessful attempts to make its devices more stylish and more user friendly (like iPhones and Androids) has analysts urging investors to sell.

Even its grip on the corporate market –where BlackBerrys were known for their security and reliability as email devices—is crumbling. The company took a big blow when Yahoo and Homeland Security announced they were switching to iPhones this year.

Another report released Tuesday by research firm IDC confirms this shift. It expects Androids and Apples to take over the enterprise market this year.

RIMM’s future prospects face overwhelming odds in the United States.

But that doesn’t necessarily mean it is doomed for overall failure.

The cellphone maker surprised investors in its last earnings report released in September, stating that its Blackberry subscriber base had risen to 80 million, up from 78 million the previous quarter. More surprisingly, this increase came from developing markets such as South Africa, Indonesia and Central America. These overseas sales, which account for more than 58 percent of RIMM’s total revenue, could be the beginning of a shift in strategy for the former smartphone pioneer.

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