While all ears are glued for the “Verizon iPhone” announcement, Android has silently risen through the ranks and now accounts for 80 percent of all smartphones sold by the leading US carrier, with 46 percent of those coming from the Droid family. And it’s little surprise that Android’s growing popularity comes at the expense of another struggling phone maker – surprise surprise, RIM!
It’s a worrisome trend for RIM as the Verizon iPhone may push it further towards the brink of extinction. Losing Verizon would be a huge setback for RIM and perhaps another nail in the coffin for the struggling Canadian smartphone giant.
The latest Verizon sales metrics have been released by ITG Investment Research analyst Matthew Goodman who obtained data from independent wireless retailers. Blackberry sales at Verizon have dropped 45 percent YOY in the third quarter of this year, and Goodman sees them slashing down to 49 percent YOY in the fourth. Interestingly, RIM is still the second largest smartphone supplier for Verizon, followed by HTC with its Droid Incredible.
Motorola has come from being a virtually nobody to emerge as the biggest supplier of Verizon smartphones, thanks to the An-Droid revolution. The arrival of iPhone is expected to lower Android’s share of Verizon sales so Motorola has reasons to be worried. More so for RIM, a company that’s fast running out of loyalists in the carrier fraternity as well as the enterprise world. There are no friends in the business world and nobody knows it better than the RIM top management. I have no doubt that life has come full circle for RIM, Verizon’s flagship smartphone partner two holiday seasons ago when it released the best-selling BlackBerry Storm.
If the recent reports are anything to go by, Verizon is all prepared to even shell out a heavy premium to keep the iPhone away from its competitors T-Mobile and Sprint. With Verizon shifting focus to the iPhone, it could spell further trouble for RIM. Interestingly, Asymco‘s Horace Dediu has a different opinion and he believes that the iPhone has stolen Verizon’s growth and Android isn’t as competitive as the iOS platform. He says that Android’s share of Verizon sales could grow to 90% as RIM continues to fade but this isn’t necessarily a positive development as Google may or may not maintain alignment with Verizon’s core profit algorithm. Either way, there are no positives for RIM.
The CDMA iPhone promises to trigger a fascinating contest between the biggies. Though it’s too early to pick a winner between AT&T and Verizon, the biggest loser is clearly going to be RIM.
Can RIM make a comeback of sorts this holiday season? It’s a mountain to climb and I’m not sure if RIM has the legs to do so. Your opinion is welcome.