Blackberry outsells iPhone in Q1 2009, becomes Dell of smartphone market… and other interesting tid-bits
In Q1 2009, RIM increased its share of the consumer smartphone market by 15% over the prior quarter. In other words, RIM now has a market share of nearly 50 percent when it comes to consumer smartphones. According to NPD group, a “buy-one-get-one” promotion by U.S. CDMA carrier Verizon Wireless helped push the Canadian company’s BlackBerry Curve past the iPhone 3G in the first three months of the year. This comes as bad news for Apple and Palm, since both companies lost 10% each. NPD reported that the BlackBerry Curve was the top-selling smartphone during the quarter, followed by the iPhone 3G, the BlackBerry Storm, the BlackBerry Pearl, and the T-Mobile G1. “Verizon Wireless’s aggressive marketing of the BlackBerry Storm and its buy-one-get-one BlackBerry promotion to its large customer base contributed to RIM capturing three of the top five positions,” NPD analyst Ross Rubin said.
On the surface, it looks like the folks over at Waterloo (RIM HQ) should be celebrating. But what if they don’t have anything to celebrate with? By cutting margins in half – that’s what happens with a buy-one-get-one promotion – RIM is well on its way to becoming the Dell of the smarphone market. Sure, the company’s products took three of the top five smartphone spots in the quarter. But the iPhone was #2 – and it got there without using any “aggressive” promotions or buy-one get-one offers. In other words, the iPhone spoke for itself (no pun intended), while the Curve needed all the help it could get to entice consumers to buy it.
You might say to me, “Alex, numbers are numbers; there are no if’s, and’s, or but’s about it.” Well, there are in this case. While RIM did sell more devices, the more important question is – at what cost? By discounting giving away the Curve, RIM has basically admitted that it can’t compete with Apple’s iPhone on the basis of value, user experience, or customer delight. Thus, it resorted to price-cutting measures. It’s kind of like deciding on that Porsche Cayman you’ve always wanted, but seeing a Toyota Yaris next to it for free, when purchased with another Yaris. So you buy the Toyota because your sixteen year-old daughter needs her first car, and you just couldn’t pass on the buy-one get-one offer. By allowing Verizon to give one Curve away as another one is bought commoditizes the BlackBerry brand, plain and simple. This is something Apple didn’t have to do. Read more »
Posted in BlackBerry, Decisions, Marketing, Numbers, RIM