Running Out of Time
David is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Rumors of a new iPhone launching from Apple (NASDAQ: AAPL) running the newly announced iOS 6 have been swirling for months now. Whether a larger LTE equipped iPhone 5 materializes in the coming months or not Apple still captures the news cycle with the latest rumors. Apple is the second largest manufacturer of smartphones in the world thanks to their iPhones continued success. Their iOS operating system is second only to Android in popularity. Google’s (NASDAQ: GOOG) Android has also had continued success, the launch of Android 4.1 Jelly Bean and Google’s Nexus 7 tablet being the latest two successes. Even Microsoft's (NASDAQ: MSFT) thus far lackluster Windows Phone initiative has captured some headlines as it looks to turn over a new leaf with Windows Phone 8.
Research in Motion (NASDAQ: BBRY) however cannot catch a break. They are laying off thousands of employees, in an attempt to save the company billions, including letting their twin CEO’s go after mounting pressure. This comes after years of Research in Motion's products failing to compete with Apple’s iPhone and then Google’s Android. The latest report from Neilson has BlackBerry's US market share below 10%, and of new smartphone customers in the US less than 5% are choosing to go with a BlackBerry. Research in Motion had initially promised to have at least one device running their next generation mobile operating system, BlackBerry 10, by the end of 2012. However now BlackBerry 10, and the new devices that will be running it have been delayed until 2013.
With less than two billion dollars in the bank and the next few quarters looking pretty rough, the last thing Research in Motion needs is to be hit with one of the many mobile lawsuits winging their way through the industry. That is unfortunately exactly what happened to Research in Motion when a California court awarded Mformation Technologies $147 million in damages for patent violations. The patents in question are related to wireless mobile management and the award covers BlackBerry devices sold from 2008 until now, it does not however cover future sales.
In the latest quarter a higher percentage of new customers purchased Android phones and iPhones than their overall market share, indicating that their overall market share will increase. Windows Phone is largely still a shot in the dark. Microsoft has bet their mobile strategy on its success and they have the resources to push it aggressively. Microsoft is not the only company pushing Windows Phone, Nokia (NYSE: NOK) is also going to live or die by Windows Phone and they do not have the resources for a long slow battle to success. Nokia’s debt has recently been downgraded because of their steady cash burn. Additionally Windows Phone 8, the upcoming release of Windows Phone is not coming to any current windows phones. Thus customers may hold off buying a windows phone until Windows Phone 8 launches. This could reduce Nokia’s sales at least for the next two quarters until Windows Phone 8 launches. Although many customers may have no idea that the current Nokia Windows Phones will not be getting upgraded and with the recent price cut of the Lumia 900 on AT&T, sales may in fact continue to rise. Indeed for the second quarter Nokia reported that they sold twice as many Lumia smartphones internationally, though their US Lumia sales were flat.
Research in Motion has been firing back at all of the bad news recently. Research in Motion's CEO has claimed that by waiting until 2013 to release BlackBerry 10 they are avoiding all of the noise around the holiday season this year. CEO Thorston Heins also stated that they have 80 million customers, something that Nokia does not have. While Research in Motion is busy not getting drowned out by the noise this year they will miss yet another holiday seasons worth of sales. Then in 2013 when they do release a few new BlackBerry devices with BlackBerry 10 it will probably be right around the time Windows Phone 8 devices make their way to most of the US carriers, not to mention the first wave of Jelly Bean Android smartphones.
Every month that BlackBerry does not release BlackBerry 10 is another month that Apple, Google and Microsoft have to boost their enterprise and security offerings. Additionally Microsoft, Apple and Google are building ecosystems, not just phones. Google has Google TV, Android tablets, phones and even the Nexus Q. All of these Google devices are coming together through Google content in the Google Play store. Microsoft has a common core coming in Windows 8 and Windows Phone 8 that will make developing applications easier, along with a common user interface called Metro. They are also launching the Surface tablets and new features for the Xbox-like Internet Explorer and SmartGlass. All of this will further integrate Microsoft products and services into a platform. Apple has the iPhone, iPad, laptops, desktops and Apple TV. Their interfaces are all moving closer and closer and they are being integrated through iCloud and the content on iTunes.
Research in Motion's lack of a compelling tablet and ecosystem will be a far more persistent issue than a delay in an operating system. This is the reason that Research in Motion should license the services they currently have to other platforms like Android, before they find that the other platforms already have alternatives and they have nothing.
ded004 has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple, Google, Microsoft, and Nokia. 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.If you have questions about this post or the Fool’s blog network, click here for information.
