RIM’s down in U.S., but future is brighter elsewhere

There’s little doubt Research in Motion (TSX: RIM) faces problems, especially as its share of the global smartphone market shrinks and doubts emerge from some traditional enterprise users of BlackBerry who felt burned by a recent network outage.

But the picture for RIM isn’t all dreary; especially outside of North America where RIM’s BlackBerry Messenger instant messenger service is popular and where the company is drawing in young users to a wide range of new BlackBerry smartphones.

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One U.K.-based analyst blamed bad press for at least part of the company’s U.S. problems. RIM “continues to face unfavorable press” in the U.S., said Canalys analyst Tim Shepherd.

Ramon Llamas, an analyst at IDC, said the perceptions of bad press toward RIM stem mainly from stories about U.S. and Canadian concerns about the dual CEO structure that’s headed RIM for more than a year.

“I don’t really see a lot of bad press about RIM,” Llamas said. “What I do see more commonly are companies saying, ‘We’ve had BlackBerry for a while and we’re ready to move onto something new.’ The BlackBerry outage was the final straw for some of them.”

Llamas added that RIM’s North American problems can also be traced to stronger competition from Apple’s iPhone and Android-based smartphones than in other parts of the world.

Also, he said, RIM has saturated all of the North America carriers with products for years, but is still a newcomer to carriers in emerging African and Asian markets. Carriers in those countries can introduce BlackBerry smartphones as something new, different and exciting, he said.

Both Canalys and IDC this week reported that BlackBerry’s market share declined sharply worldwide in the third quarter.

IDC on Thursday reported that RIM’s smartphone market share dropped from 15 per cent globally in third quarter of 2010 to 10 per cent in the third quarter of 2011. At the same time, IDC said shipments of RIM smartphones fell from12.4 million to 11.8 million smartphones during the same period.

Meanwhile, Samsung became the top worldwide smartphone vendor in Q3.

“RIM’s market share has fallen below 10 per cent for the first time and the current outlook for it in the U.S. is certainly bleak,” Shepherd wrote. “RIM must deliver a competitive high-end 4G smartphone in early 2012.”

Shepherd noted that RIM shipments dropped by 58 per cent year-over-year in North America, while the U.S. market share dropped from 24 per cent in third quarter 2010 to just 9 per cent in third quarter 2011.

RIM’s refreshed product line with the BlackBerry Bold 9900 didn’t help in the quarter, he noted.

Despite RIM’s lassitude in North America, Shepherd said “the picture for RIM in other parts of the world is clearly more positive.”

He said RIM shipments grew more than 50 per cent over a year ago in Europe, the Middle East, Africa and Asia Pacific largely because of the “continued popularity” of its BlackBerry Messenger service.

Even the widespread outage isn’t perceived as that devastating for the company outside of North America, Shepherd said.

“While October’s outage, focused on EMEA particularly, has hurt RIM’s reputation for reliability, we do not expect it to have a substantial impact and expect a decent Q4 performance there,” he added.

Llamas and Shepherd both said that whatever success RIM has outside of North America, it needs to reassert its position in the U.S. and Canada, its home country, with products based on its new BBX platform.

Llamas noted that RIM didn’t release a new BlackBerry in North American in 2011 until mid-year, while HTC, Samsung and Motorola were releasing new smartphones “almost every month.”

Llamas added: “Repetition is reputation, and if RIM’s not repeatedly out there with new products, it will lose mindshare.”

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