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    RIM, Microsoft Bets Hint at Radical Change

    By
    Nicholas Kolakowski
    -
    December 5, 2011
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      Although 2011 proved to be a dynamic year in mobility, in broad strokes it certainly hewed to the expectations of many analysts. Google Android continued to gain market share, as predicted, while Apple’s iPhone remained a potent force in both the consumer and business realms. Microsoft’s Windows Phone struggled to gain users, and Research In Motion did its best to beat back rivals.

      The coming year will almost certainly prove to be far more unpredictable, if only because the pressure of Android and iOS is driving other competitors to take game-changing risks.

      RIM faced declining revenue throughout most of 2011, with executives acknowledging headwinds due to an aging BlackBerry device line. Those numbers led to analyst pessimism and even a well-publicized call from Canadian merchant bank (and RIM shareholder) Jaguar Financial for an executive shake-up.

      The company is betting that its upcoming “superphones,” loaded with a “BBX” operating system based on the same QNX OS that powers RIM’s PlayBook tablet, will help reverse its fortunes. However, the exact timetable for the BBX devices’ release is unclear.

      The numbers don’t help the company’s problems. RIM held 18.9 percent of the U.S. smartphone market for the three-month period ending in September 2011, down from 23.5 percent for the period ending in June, according to research firm comScore. That’s in contrast to Google Android and Apple, which gained 4.6 points and 0.8 points, respectively, to claim 44.8 percent and 27.4 percent of the market. If RIM’s “superphones” prove to be a hit in 2012, it could stop or even reverse that slide, but if those new devices fail to seize customer imaginations, that could translate into significant danger for RIM.

      One company could benefit from softness in RIM’s position: Microsoft, which in recent weeks has renewed its Windows Phone push. In the wake of the platform’s broad-based “Mango” update, with hundreds of tweaks and fixes to the operating system, Microsoft and its hardware partners plan on issuing a series of upgraded Windows Phone devices in the coming months.

      On a global scale, Microsoft also hopes its deep partnership with Nokia will radically boost adoption of Windows Phone, which until now has struggled for adoption. comScore estimated the combined market share for Windows Phone and its antiquated predecessor, Windows Mobile, to be 5.6 percent through the end of September 2011-down from 5.8 percent in the preceding three-month period.

      Microsoft’s ascension as the third-ranked mobile player in 2012 is by no means guaranteed, analysts say.

      “In the U.S. the stores seem awash in Android phones, and the iPhone continues to be the most desired,” Rob Enderle, principal analyst of the Enderle Group, told eWEEK. “Nokia is stronger in Europe, and things may be going better there. Microsoft will likely have to rethink how they are funding this. They can ill afford another market failure, but it is my impression they are massively underfunding this effort.”

      Apple and Google, of course, will continue to battle it out for the largest pieces of the pie over the next four quarters. Apple is expected to release an “iPhone 5” sometime next year, possibly with a design that’s radically different from that of the iPhone 4 and iPhone 4S. Google Android will also proliferate, but the competition from Apple and constant legal challenges from Microsoft could affect manufacturers’ strategies.

      What’s certain is that the mobility landscape in 2012 will look substantially different from today’s, especially if the bets by RIM and Microsoft either pay off or end in failure.

      Nicholas Kolakowski
      Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.

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