Shocker: RIM Has More Problems

Research In Motion just can't catch a break.

A recent mobile workforce survey found that only 5% of respondents are expecting to stay loyal to the BlackBerry maker. Call me crazy, but 5% doesn't sound like enough interest for the King of Berries to stage one of the greatest comebacks in today's tech world. Bear in mind, this is only the end-user side of the equation.

In August, IDC found similar findings with developers -- the ones who drive innovation for the platform. Over 5,500 developers were questioned, and a mere 9% said they were "very interested" in BlackBerry apps. That number has fallen 31% since the last time developers were questioned.


Unless you've lived under a rock for the last two years, you wouldn't need a survey to know that RIM has been losing market share in a mass exodus kind of way. According to Gartner, RIM has lost over 68% of its market share since 2010. Being that RIM has only 5.3% left of market share to spare, this situation has grown more serious, but it could be a whole lot worse.

Despite the decline, the subscriber base has actually increased in size -- by 2 million last quarter. Subscribers have become a lifeline for RIM because they mean recurring revenue from carriers to help support the BlackBerry network. Last quarter, subscribers accounted for 35% of total revenue, essentially buying RIM enough time to release its next operating system, BlackBerry 10, due out early next year.

It's tough out there
RIM's late-in-the-game turnaround comes at an inopportune time. Microsoft and Nokia have joined forces to take third place away from RIM. Together they have deeper pockets and enough determination to make Windows Phone 8 a threat to be reckoned with. RIM used to rest easy in knowing that its enterprise business was well insulated from the Apple iCraze, but evidence is mounting we've reached the iTipping point.

According to IDC , enterprises are ditching their CrackBerrys for more iCool "in droves." The report predicts by 2016 Apple will dominate the space with 68.9 million shipments. It went on to say that Google's Android will not establish a sizable enterprise market share because its ecosystem is fragmented, leaving "more gaps in security than many organizations are comfortable with." Unfortunately, IDC shares the collective opinion that the Blackberry ecosystem lacks consumer and developer appeal, which "hinders its viability going forward."

Better late than never?
The smartphone market isn't the Wild West anymore. I'm not saying RIM stands zero chance of success, but what makes it any different from becoming another Palm, Symbian or MeeGoo? For all those history believers out there, RIM's trajectory is strikingly similar to when Palm reached its eleventh hour and bet the house its WebOS platform. We all know how well that went.

Research In Slow Motion
Make no mistake: RIM faces an uphill battle in the coming year. Its long-term viability hinges on the successful release of one piece of software, BlackBerry 10. For the time being, subscribers will keep the ship afloat, but if upgrades fail to retain them (as the surveys suggest), things will get ugly fast. The competition has intensified, the majority of consumers have moved elsewhere, and RIM is running out of time to reclaim its seat at the table. When the music stops, will there be any RIM left for discussion?

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The article Shocker: RIM Has More Problems originally appeared on Fool.com.

Fool contributor Steve Heller owns shares of Google and Apple. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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