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RIM Likely to End 2007 with 10% Share of the Smartphone Market

Research In Motion (RIM) is likely to end 2007 with around 10% share of the smartphone market. This means that in terms of device shipments, RIM will be the second largest smartphone vendor in 2007, after Nokia. RIM’s share in the smartphone market has steadily increased in the last five quarters — from 7.2% in 3Q 2006 to 9.5% in 3Q 2007.

However, RIM’s business is still predominantly in North America and the company now needs to put increasing efforts into addressing and benefitting from the growing demand for smartphones in the emerging markets of Asia Pacific and other regions.

According to ABI Research industry analyst Shailendra Pandey, “In addition to operator partnerships, RIM needs to grow both its R&D and manufacturing capabilities to expand and increase its presence in markets beyond North America and Europe. Considering the growing opportunities in the Asia Pacific region, a manufacturing and R&D presence in India or China can help RIM in shipping more devices and reducing overall costs.”

This specific focus on the enterprise market and the email feature has helped RIM establish itself as one of the most preferred vendors in the smartphone market. This also enables the company to maintain higher and more stable ASPs for its devices. ABI Research estimates $345 as the ASP of RIM handsets in 2007, which is substantially higher than the overall industry average of $248 for smartphones. The growing popularity of RIM’s devices indicate that consumers and carriers are willing to support higher priced handsets, if the feature set is right and the device is executed well.

ABI Research expects RIM to continue performing strongly in the smartphone market in 2008. However, RIM will have to seek ways to include better features, improved design and a clearer UI in its devices, and introduce more handsets like the BlackBerry Pearl for the prosumer market. [ABI Research]

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