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Apple and RIM's smartphone arms race escalates
By Paul Carton and Jim Woods
Two weeks before the new Apple (AAPL) iPhone 3G was released, a ChangeWave consumer survey showed that it was likely to have a tsunami-like impact on the smartphone market -- and an extraordinarily successful 1 million units sold in the first weekend.
But what does that mean for current market share leader Research In Motion (RIMM)?
Our survey showed that the iPhone 3G had catapulted Apple to the lead in terms of planned consumer smartphone purchases for the next 90 days. But RIM holds a gigantic lead in the corporate smartphone market and is the leader among current owners in the consumer market.
Despite its leads, RIM isn't taking Apple's 3G introduction lying down. The Canadian manufacturer has multiple plans in the works to counter Apple's momentum among consumers, including a new product release (the Bold phone) and two likely product releases (the Thunder and KickStart phones).
To get a sense of the market potential for RIM's new smartphone arsenal, we surveyed consumers on their reaction. The survey was conducted during the aftermath of the Apple 3G announcement (June 17-23), but before the new iPhone model had been released.
Preparing For Multiple Battles
Consumer respondents were presented with a brief description containing key features of RIM's new smartphone models, along with a follow-up question asking them how likely they were to purchase each model if and when it became available.
Illustrated in the chart below, the new RIM releases show considerable potential among consumers.
• Four percent of respondents reported that they're very likely to buy the new RIM BlackBerry Bold when it becomes available. Another 13% said they are somewhat likely.
• Two percent of respondents said they're very likely to buy a RIM BlackBerry Thunder when it becomes available. A total of 13% reported they are somewhat likely.
• Two percent said they're very likely to buy a RIM BlackBerry KickStart when it becomes available and 11% said they are somewhat likely.
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The Victors and the Vanquished
Our recent surveys show Apple and RIM on a clear collision course in the consumer smartphone market as three new RIM phones are poised to counterattack the market assault from the Apple iPhone 3G.
And while the current survey shows the new RIM releases have considerable potential, the real test is how satisfied consumers will be with their new BlackBerrys once they hit the market.
We will closely measure the first reaction once consumers purchase the new BlackBerry models, and if the initial reviews on RIM's new releases are poor and consumer satisfaction levels decrease, then RIM will almost certainly receive rough treatment from the Street.
To date, the strength of our early survey results on the demand for RIM's new products points to a powerful counteroffensive in the making by the Canadian manufacturer.
The real losers here will most likely be the second-tier players, who could find themselves pushed to the sidelines as the two Goliaths battle for market dominance.
To find out which manufacturers are most at risk because of the RIM counteroffensive, we took a close look at the impact of the new RIM releases on the rest of the industry.
Not surprisingly, current RIM customers are two-to-three times more likely to buy the new RIM models than the customers of other manufacturers. However, we found that the new releases also have significant potential to lure customers from other manufacturers. Palm (PALM), Motorola (MOT) and Samsung are projected as the top victims.
Apple customers, on the other hand, appear least likely to purchase any of the new RIM phones.
As the old adage goes, to the victor goes the spoils -- and by the look of things, Apple and RIM are both victors. The Apple iPhone 3G has captured the hearts and minds of its user base, as has the RIM BlackBerry. Fortunately for both, the global consumer and enterprise smartphone markets are large enough to support both Apple and RIM -- it's the other smart/cell phone manufacturers that appear to be the losers.
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