updated 09:25 am EST, Wed December 22, 2010
Mace finds RIM growing but slipping in US
RIM's fall BlackBerry results showed signs of a turnaround but masked problems with growth in the US, Cera CEO Michael Mace showed in an unofficial analysis on Wednesday. It successfully kept its average phone price up and managed to increase its net new subscribers, but its dependence on sales beyond North America has become evident in the long term. The addition of total subscribers has virtually flattened in the continent, and service revenue has kept dropping as more of its sales depend on prepaid access outside of Canada and the US, especially in Europe.
Mace pointed out that the net subscriber additions were still largely flat over the past year and that the number of new subscribers per unit was at an all-time low, reinforcing the concerns that RIM was near the end stages of its growth. He had previously warned that a marked shift towards cheaper service and devices was usually a sign of a fully saturated main market and an eventual decline. RIM could still thrive in the future based on its international appeal, but its North American sales have "hit the wall" as users have been shifting to Android and iPhones.
"It looks like the North American business may be closer to a platform collapse than I realized," Mace said. "I think urgent action is needed to keep the company's North American users loyal. The silver lining in that dark cloud is that RIM's growth in other regions can help fund the changes needed. But time is short, and I still worry about RIM's ability to quickly focus on new differentiators and create compelling user experiences."
Most of RIM's hope would come from the BlackBerry PlayBook, whose mobile OS has so far been well-received. RIM's tendency to bow to carriers, content providers and institutions also still worked in its favor. The teased 2011 roadmap could also prove to be a surprise.
However, RIM's need to fight on an "enormous number of fronts" and inability so far to make truly high end devices may complicate any return to form. "estoring momentum to a stalled-out platform is a very difficult task, and it rarely goes smoothly, or succeeds in a single year," Mace said.