BlackBerry Loses Top Spot to Apple at Home: Corporate Canada

Canada’s love affair with the BlackBerry is waning.

March 22 (Bloomberg) -- Canada’s love affair with the BlackBerry is waning.

Research In Motion Ltd. has been ousted from the top spot for smartphone shipments in its home market for the first time, trailing Apple Inc.’s iPhone.

RIM, based in Waterloo, Ontario, shipped 2.08 million BlackBerrys last year in Canada, compared with 2.85 million units for Apple, data compiled by IDC and Bloomberg show. In 2010, the BlackBerry topped the iPhone by half a million, and in 2008, the year after the iPhone’s debut, RIM outsold Apple by almost five to one.

BlackBerry, one of the biggest consumer brands to emerge from Canada, had enjoyed more loyalty among locals who embraced its made-in-Canada roots. BlackBerry’s loss of domestic preeminence shows the iPhone’s user-friendly features and wealth of apps trump other considerations, said Paul Taylor, a fund manager at BMO Harris Private Banking in Toronto.

“For RIM, in its home market, to lose that No. 1 position to iPhone is strategically important,” said Taylor, who manages about $15 billion in assets, including RIM and Apple shares. “It does identify, even with a home-country bias, how consumers are responding to the greater functionality of the iPhone.”

To halt a sales slump that’s spreading north from the U.S., Thorsten Heins, RIM’s new chief executive officer, has vowed to do something “dramatically different.” The BlackBerry 7 phones introduced last year have better Web browsers and touch-screen navigation than older models and the BlackBerry 10 devices due out this year will represent further improvement, Heins said.

Losing the Way

Sales in Canada, which account for about 7 percent of RIM’s revenue, fell 23 percent in the fiscal third quarter from a year earlier as U.S. sales tumbled 45 percent. That dragged worldwide revenue down 5.9 percent, offsetting rising emerging-market sales.

While RIM was once a hotbed of innovation, it didn’t invest enough in promoting its devices once the iPhone arrived, said Alfred DuPuy of Interbrand, a research firm.

“They got so good at innovation they just expected the product to sell itself,” said DuPuy, head of the firm’s Toronto office. “From a brand perspective, they just lost their way.”

BlackBerry slipped two spots to 54th in Interbrand’s October 2011 ranking of the world’s top 100 brands as Apple climbed nine spots to eighth.

“The challenge for Mr. Heins is to take that iconic brand and products that are reasonably competitive and ensure that they do get appropriate attention from the average consumer,” BMO Harris’s Taylor said. “That’s the challenge: to reverse the negative sentiment that has developed.”

Betting on Decline

Market-share losses, a series of marketing missteps and product delays sent the stock down 75 percent last year and RIM yesterday closed down 90 percent from its mid-2008 record. That hasn’t stopped investors from betting on further declines. Short interest in RIM reached an eight-year high this month.

RIM will probably say fourth-quarter profit fell by more than half to 82 cents a share when it reports results March 29, according to a Bloomberg survey of analysts. Sales probably dropped 18 percent to $4.53 billion, analysts predict. RIM said in December sales would be $4.6 billion to $4.9 billion.

By contrast, Apple’s fourth-quarter profit more than doubled to $13.1 billion -- almost triple RIM’s sales -- as revenue surged 73 percent to $46.3 billion.

RIM declined 0.1 percent to $14.03 at 11:04 a.m. in New York and Apple fell 0.2 percent to $601.54. Apple has gained 49 percent this year and soared almost six-fold since 2009.

Heidi Davidson, a spokeswoman for RIM, declined to comment, citing a quiet period ahead of earnings.

Page 1 of 2 >>

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome