RIM Surrenders Consumer Market to iPhone

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Image: mychinaconnection.com
Image: mychinaconnection.com

RIM never did shake its button-down image in attempts to expand into the consumer market dominated by Apple. Realizing its failure, the handset maker is ready to surrender to Apple in the consumer ring, and focus on its business roots… an arena which iPhone is also increasingly dominating.


“We no longer anticipate Research in Motion recovering to participate in the mainstream of smartphone industry growth,” Wunderlich Securities analyst Matthew Robison said. Instead, the company will have a role in “supplying business-oriented devices, both mid-range and high end, as well as cloud-based services via the BlackBerry Network,” the analyst adds.

What consumer customers RIM gained during the past two years will be lost, followed by an earning drop that eventually will recover on the wings of business users. Still, Robison cut his RIM target price to $46, down from $76.

Like the BlackBerry, RIM likely will see its PlayBook tablet sales mostly go to the business handset fans. “There is little indication that the PlayBook has registered with consumers outside the loyal BlackBerry installed base,” the analyst concludes.

We are seeing non-consumer handset makers realize competing in the consumer market is not so easy. Unlike businesses, which are fine with drab, unchanging hardware and services, consumers can be a fickle bunch – attracted by the sizzle, as well as the steak. RIM’s apparent concession of this market shows Apple’s strength in aiming product after product at the consumer sweet spot, hitting the bulls-eye time and time.

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