iPhone Gaining on BlackBerry Market Share

[Jeff Campbell]

<div class='os_post_top_link'><a href='http://apple-investor.com/blog/2009/10/apple-iphone-closing-in-on-blackberry-market-share.html' target='_blank'>http://apple-investor.com/blog/2009...rket-share.html</a><br /><br /></div><p><em>"Paul Carton, Director of Research at ChangeWave Research, reported yesterday at investorplace.com that Apple iPhone is gaining steadily on BlackBerry's market share, a great feat considering BlackBerry's entrenched position in the business sector."</em></p><p><img src="http://images.thoughtsmedia.com/resizer/thumbs/size/600/at/auto/1256775260.usr105634.jpg" style="border: 1px solid #d2d2bb;" /></p><p>BlackBerry at 40, iPhone at 30 and closing, Palm bringing up the rear with 7!! Sounds almost like a horse race being broadcast. Regardless, iPhone is definitely making big inroads on BlackBerry with 36% of those likely to buy in the next 90 days planning on buying an iPhone. If AT&amp;T loses exclusivity, I think it is really going to be pretty much iPhone and the also rans. What are your thoughts?&nbsp;</p>

[ptyork]

No, it'll peak. It may well peak at #1 in the US and stay there for a while, but as with all things like this, it'll peak. Especially if Apple keeps just "tweaking" their product (like Palm did for WAY too long). I love my iPhone 3GS, but I'm already frustrated by too many things it can't do, some of which AREN'T power user things (like "simply" listening to Pandora while getting turn-by-turn GPS directions or something truly as simple as sharing data between applications) and are becoming expected.

I'm sure Apple will get around to multitasking and MAYBE even data sharing, but even if it does, there are too many good competitors out there for it to remain dominant "indefinitely" without some pretty major innovation. Most of the competition has caught up in terms of usability and surpassed in terms of capabilities. They lag only a little in apps (real apps, I mean, so don't start quoting 85,000 apps BS). Plus, in this type of market, once a product reaches too many, it becomes passe (look no further than the RAZR for this). If they just bring out a 3Gx next year (or anything that continues to be a slab with an app launcher for a home screen), I'm thinking even fans are going to start looking at other "good" options, which most certainly do exist.

Oh, and those numbers and this analysis apply only to the US...elsewhere the picture looks WAY different. Also, remember that Apple is still very consumer-focused. It remains to be seen if they'll make real headway into the corporate world (which is RIM's stronghold).

[Dyvim]

I'm with ptyork. It'll peak eventually. It's up to Apple though to determine how high that peak will be and how long it will hold, but fall it will.
I love my iPhone 3GS more than any other handheld gadget I've had (and I used WinMo for 8 years), but that's not to say there aren't many things that frustrate me about it. When those frustrations get too high and when a competitor that offers a better experience for my needs comes along, then I will move on (as I've moved on from WinMo). So yeah, I feel as if Apple needs to up their game if they're going to keep me as a customer long term.

This chart doesn't show a couple things:
(1) Total unit sales. The smartphone market is exploding right now in the U.S., so even though RIM dipped slightly in market share, their total sales are probably on the rise- as are Palm's with 7%. Which makes Apple's story even more incredible since they've gained market share in a rapidly expanding market.
(2) Who the losers are. RIM lost a little share and Palm has held steady recently, so who is losing the share that Apple is gaining? Nokia? WinMo? Anyway, I can see RIM holding steady with 30-40% of the market regardless of what Apple does.

And of course this is U.S. only. I'm not sure that ending AT&T exclusivity will do much. Truth is, AT&T is the only network the iPhone works on here (granted it works for Voice + EDGE on T-Mobile but no 3G). It's not like more civilized countries where all the carriers operate in the same frequencies. If Apple's not making a CDMA iPhone for China Mobile's massive market, what makes people think they will make one just for Verizon & Sprint? Nor do I see them adding additional 3G radio bands just for T-Mobile.

[Jeff Campbell]

(real apps, I mean, so don't start quoting 85,000 apps BS)

Ok I won't, because it's 102,000 now! ;)

[doogald]

I'm sure Apple will get around to multitasking and MAYBE even data sharing, but even if it does, there are too many good competitors out there for it to remain dominant "indefinitely" without some pretty major innovation.

Let me start by saying that of course they will peak - after all, even iPods peaked - but is there any reason at all that you think that Apple will *not* continue innovating the iPhone?

I saw this (http://daringfireball.net/linked/2009/10/28/dalrymple) yesterday and thought it was right on.

Jim Dalrymple:

The next version of the iPhone is already well underway and it will have cooler features than the existing models. Apple created a platform, not just a piece of hardware that uses the same old software. That’s a huge distinction.

If you want a parallel, try this. Apple had the most successful music player on the market with the iPod mini. Any other company executive would have given their right arm to have that device. What did Apple do? It dumped it. Apple stopped making its top-selling iPod and introduced the iPod nano in its place. Just when the competitors thought they had Apple in their sights, Apple completely changed the game.

John Gruber:
Right. You know who thinks the iPhone 3GS stinks? Steve Jobs. No one is working harder on an “iPhone 3GS killer” than Apple.

[ptyork]

Let me start by saying that of course they will peak - after all, even iPods peaked - but is there any reason at all that you think that Apple will *not* continue innovating the iPhone?

All depends on your definition of innovation. To me, the Nano was hardly "innovative" when compared to the mini. The Touch was innovative, but the nano was evolutionary at best. It was a software tweak and a response to improvements in hardware capabilities and a reduction in cost. Honestly, IMO they haven't "innovated" from iPod 1G through nano. Just evolved and tweaked. If any other company with an even slightly less commanding position in the market had followed this path they'd long since have become an also ran (this is a major compliment to Apple and Jobs, by the way).

If you forget the SDK (it just made it a smart phone instead of a fancy feature phone), there has been only evolution on the iPhone platform since introduction (faster, GPS, compass, enabled video). I do think there's a very good chance that Apple WILL innovate, but I also feel like their need to control the experience soup-to-nuts will slow them down relative to the eager competition. And their propensity to limit hardware and software choice--which works well as a niche PC maker--will likely not allow them to maintain market dominance. As with the PC, they pave the way through initial innovation, but can't do what it takes to remain dominant. The only exception so far would be the iPod itself, but as a task oriented device, it is a totally different market. Just my opinion, but history does seem to back me up. We'll see.