Analyst reports suggest that both Palm and Research in Motion’s BlackBerry are facing challenges to compete with Apple’s iPhone in the consumer market.
Charles Wolf, analyst of Needham & Co., says both RIM and Palm are facing challenges as iPhone continues to win the hearts and minds of the consumers and enterprise markets. However, Wolf believes Palm is in more danger since the company has “lost its way” due to the lack of updated OS release in the last five years, suggesting the company’s dependency on their in-development products to reclaim its “lost” market lead.
“We’re initiating coverage with an under perform rating,” said Needham & Co.
Both BlackBerry and Palm haven’t announced any plans to introduce new models late in the year. Even then, Needham & Co. thinks it would be an open question whether the two companies would be successful.
Wolf believes that the iPhone may take market share from the two companies once Apple introduces its new enterprise-friendly features by June. After the launch, RIM can expect to see some impact with its core enterprise market, while the
“We believe BlackBerry’s supercharged growth in this [consumer] market could slow materially when far more versatile applications developed for the iPhone begin to appear in the second half of the year,” warned Wolf.
The analyst, however, still believes that Smartphone developers would still hold a good lead on majority of its competitors because firms such as Samsung and Motorola are tied to Microsoft Window’s mobile system. Despite this fact, Wolf notes that Apple changed the Smartphone market when it decided to launch the iPhone, describing the industry as “totally disrupted” by the introduction of the popular iPhone.
“The iPhone is a game changer, weaving together a wide array of computer-like functions,” he explained. “Given the choice between a BlackBerry and iPhone, we believe a material percentage of consumers will opt for the iPhone once exciting applications for the phone begin to proliferate in the second half of the year. BlackBerry sales should continue to grow but at a materially slower rate than they would have in the absence of the iPhone.”
