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Will the iPhone Eat Blackberry's Business Lunch?

by: Anthony Dadlani April 14, 2008 | about stocks: AAPL / PALM / RIMM    

Anthony Dadlani

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Research in Motion (RIMM) makes one fantastic product. I must be on my 5th Blackberry in the last 5 years. Loved each model and always opted to get a new model as they were released. The push email made me an addict just like many millions of others.

Last June, I took a leap of faith on Apple (AAPL). Was sold on the IPHONE hype. Decided to switch over and have the internet in my pocket just as the ads seduced me to. I didn't realize that push email, copy/paste, and contact search would not be part of this device as I was accustomed to.

Iphone 2.0 is coming in June and it seems they will be addressing many of the missing features as well as creating a eco system that will essentially make it the best smart phone platform on the planet. Not only will they be including push email and exchange support for the corporate market, they will open up their beloved phone to third party developers so we will have a choice of many applications right in our pockets. I am an official Blackberry deserter and will never look back. I am looking forward to the new and improved IPHONE 2.0 and possibly a 3G one as well.

I would have to agree with this analyst note. Apple (AAPL) will take market share away from Research in Motion (RIMM). Matter of fact I think they will take substantial market share. I would be very cautious on RIMM stock at this point in time. It does not have a diverse product line. If it starts to lose customers in the smart phone market, I dont think they can sell PC's to make up for any lost revenue.

On another note, I also think Palm (PALM) will be out of business in 12 months.

Would you really buy a Palm in 2008?

Disclosure: I own shares of Apple for myself and clients. I trade RIMM and PALM from time to time for clients and myself.

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This article has 46 comments:

  •  
    Apr 14 04:30 PM
    Looking forward to the SDK myself for my iPhone, and the wife will be replacing her Treo running Windows mobile for an iPhone in June when the new iPhone update with Exchange support arrives. She just returned form an IT meeting with our company and most of them are ready to chuck thier Treo's for an iPhone, :D lol That Windows mobile is a joke, constant drop calls, texted messages days later, constant software crashes, reboots, installing software over and over. She basically has an expensive 2 megapixel camera.
    Reply
  •  
    Apr 14 04:31 PM
    Therein lies one of the biggest hidden problem with RIMM and the other 'disposable' cell phone makers:
    5 Blackberry devices from a singles customer has (or will eventually) end up in the landfill.
    I own 5 iPods, including the original 5gb and they are all in active use.
    Similarly, the iphone will have a long duty cycle and spare the environment a lot of throw away phones.
    One more reason the iPhone will eat into the Blackberry market share.
    Reply
  •  
    Apr 14 04:42 PM
    Ahem Mr Apple Heavy . . . it is a GOOD think for RIMM if people replace them frequently. In fact the CEO of RIMM himself calls the blackberry a "disposable" device.

    Regarding AAPL, get out now while you can. Millions of people who were counted on to expand Apples market share are tied up with more important things. Like trying to not get tossed out of their house. Like trying to feed their kids. Don't make the oldest investing error of all -- assuming that the past is prologue.
    Reply
  •  
    Apr 14 04:45 PM
    to: Thing Ahead

    What does that have to do with this article? Stay on topic, it will help everyone.
    Reply
  •  
    Apr 14 04:49 PM
    Proud Canadian:

    Is that why the iPhone has the most widely used mobile browser? although they have less phone out there than RIMM. Yes they are huge, but RIMM is so 1990's and people expect more and you know it!
    Reply
  •  
    Apr 14 04:51 PM
    [Editor's Note: Proud Canadian's comment was erased due to abusive language. Commenter put on notice]
    Reply
  •  
    Apr 14 05:08 PM
    Apple will own RIMM in another couple of years. RIMM is a one trick pony something Apple is not. RIMM is a great company but they lack the innovation & creativity of Mr. Jobs. I can't wait to see how far Apple goes in the next few years. I'm beginning to believe that one analyst who predicts Apple will hit 600 w/i the next 18 months....
    Reply
  •  
    Apr 14 05:47 PM
    Thinking ahead: you nailed it. had a good laugh on your comments.

    aapl is hyped up. for no reason it went up from 120 to 160 and now at 148. rimm after giving smashing results, upping guidance still trading couple of qtrs behind earnings.

    aapl is hyped up. mac's sales are good but not at windows killing levels and the stock is priced at windows killing levels.

    rimm should be soon with a touchphone kind of clone. they are not some stupid engineers at rimm who have not taken a hard look at iphone.

    i suggest buying aapl 120 put and 125 put and hedging that with the in money call. (the call is not needed but if you are so bullish buy a few calls but load on puts).

    see ya aapl at 120 after earnings. aapl should come in less than a dollar in earnings with another lowered guidance.
    Reply
  •  
    Apr 14 05:56 PM
    to greencapitalist:

    What the heck are you talkinig about? Last time I checked M$ stock is down 0.22 at 28.06 a share. Apple's stock is up 0.64 at 147.78 a share. Windows Vista is the worst OS since ME and they're reports that Windows is loosing ground in the OS market to linux and OS X. Apple has 78% market share in MP3 arena, and the last numbers I checked has a 20% market share in desktops with a 10% market share worldwide, which is up drastically. Face it M$ is only used becuase businesses use it, if the comsumer educated themselves instead off buying the cheap Walmart PC the world would be a happier place and places like the Geek Squad and Fire Dog would no longer exist.

    Now the focus is on the iPhone, which IS killing everything in it's path, just like the iPod did. Get used to it.
    Reply
  •  
    Apr 14 06:50 PM
    On my second high-end blackberry, but also carry my iPhone. The only thing I use the BB for is company email, because we are on Lotus Notes mail. Even in June iPhone won't likely support that.:( The BB is so cludgy to use, I don't even like typing on its little keys. I find the iPhone virtual keyboard much easier/faster to use. Internet on the BB is a joke, as are all the other applications. Endless menus, layer upon layer, hidden commands, etc. And all their sales... both mine cost $0 through special deals. Yeah, lots of sales, but at what price? I think they are mostly giving them away to gain subscribers. The minute my corporate IT supports the iPhone, my BB goes in the drawer.
    Reply
  •  
    Apr 14 07:00 PM
    now...now...let's not get nasty...the adult readers would appreciate an adult view...thanks in advance
    Reply
  •  
    Apr 14 07:07 PM
    Sounds like the greencapitalist is smoking some green.....
    Reply
  •  
    Apr 14 07:42 PM
    Truely a stupid article of AAPL's pumping ! If AAPL is so good, why do you need to bash RIMM the Juggernaut .:)
    Reply
  •  
    Apr 14 07:55 PM
    One sentence is the only truth in the article and it speaks all about this article. That is the following.

    "Disclosure: I own shares of Apple for myself and clients."

    Reply
  •  
    Apr 14 07:57 PM
    to: Proud Canadian

    "Will the iPhone Eat Blackberry's Business Lunch?"

    I think the title says it all, the keyword word look at is "Will"
    Reply
  •  
    Apr 14 08:34 PM
    Apple: "The BlackBerry tasted very good. I had it with fava beans and a nice Chianti."
    Reply
  •  
    Apr 14 08:40 PM
    Mr. White:
    Try this: 1) read the article again then 2) read the comments in order. I bet it's not really beyond you to follow all this if you try again.
    Reply
  •  
    Apr 14 08:52 PM
    Proud Canadian? Isn't that an oxymoron? RIMM, the juggernaut? Now that's a good one......
    Reply
  •  
    Apr 14 09:24 PM
    I thought this blog was to discuss market share, but since stock price is part of the discussion......
    RIMM reminds me of NORTEL , and other Canadian "juggernaut" which peaked during the last bubble.
    Over the holidays, there was a promo in Canada where you signed up for 1 Blackberry and you get 2 or 3 for free.
    When the North American carriers stop playing the subsidy game (and they will at some point), I wonder who is going to buy a Blackberry at full price!
    Reply
  •  
    Apr 14 09:49 PM
    You have Britney.
    We have Celine.
    You have Bush.
    We have Harper.
    You have Unlocked iphones.
    We have locked BlackBerries.
    So AAPL has a lost of revenue.
    And RIMM doubles his revenue.
    Isn't it a nice song ?
    Any comment on that lost of revenue ?
    Reply
  •  
    Apr 14 10:08 PM
    Much of this discussion is a waste of time -- it's really not about Canadian vs American, and it would be more helpful to everyone to have an informed, rational discussion about the stocks.
    To "Proud Canadian": I'm Canadian too and think Rim is a GREAT company, but so is Apple. Personaly , I think is there plenty of room for BOTH companies to grow, as market penetration for top end smartphones is not at all very high yet. Not everyone wants music on their phone, and not everyone needs the level of security that Rim offers.
    Reply
  •  
    Apr 14 11:03 PM
    Watch out for windows mobile 6.1. This will turn every windows phone into an iphone. appl is 10 moves ahead of rimm. all rimm can do is wait to see what appl does and copy it as fast as they can. i would bet on appls stock breaking $200 again once we see 2.0 in 3G.
    Reply
  •  
    Apr 14 11:20 PM
    I totally agree...well said 'user 30457' !....the best is yet to come from Steve and his gang...stay tuned and hang on for the rocket ride!
    Reply
  •  
    Apr 14 11:33 PM
    Nietschele,
    I completely agree with you and, for your information I own AAPL and RIMM's shares. But what I see on this blog is only RIMM's bashing !
    Call me crazy if you want, but I'm ready to sacrifice my AAPL's shares for my RIMM's shares anytime for someone who will bash RIMM.
    Reply
  •  
    Apr 14 11:55 PM
    I'm really proud of you Proud Canadian ! And it's obvious that you know RIMM and the smartphone's industry. Congrats.
    Reply
  •  
    Apr 15 12:08 AM
    Proud Canadian,
    Thank you.
    Reply
  •  
    Apr 15 12:26 AM
    OsX, OsX, OsX!

    OsX which runs the iPhone, iPod touch etc. took something like 20 years to create (from Next Os).

    OsX is a modern Unix operating system (unlike windows) and is extremely powerful with a phenomenal rendering engine etc. that's why it can run multi-touch, a full page web browser, games like the Spore (watch the iPhone SDK presentation) and complex programs that would bring a Windows mobile device to its knees.

    Because of OsX the iPhone is much more than a phone, it is a MOBILE COMPUTING platform - like a mobile mac. (John Doerr said it's a new platform "bigger than the PC").

    Eventually Apple can get whatever it needs like 3G etc. but it's competitors will NEVER MATCH OsX. If Microsoft with its billions can't do it, PHONE makers like Rim building a "iPhone killer" i.e superseding OSX in " a few months or a year " is ludicrous. That's why all the "iPhone killers" so far function badly, they might have the iPhone looks but not the OS.

    Also OsX allows iPhones and Apple mobile devices to seamlessly integrate in a computing environment, some other "smart-phones&quo... can't even be hooked up to a computer!

    With iPhone software 2.0 coming in June the iPhone will be a platform like no other.

    I own Google stock and I yet I don't think even Android will be much of an iPhone threat.

    Reply
  •  
    Apr 15 12:29 AM
    Stupi... er, uh proud canadian, we have nukes & you don't.

    GAME OVER!
    Reply
  •  
    Apr 15 12:43 AM
    And its "lost revenue". You do use English in Canada,right?
    Reply
  •  
    Apr 15 01:53 AM
    Reagan,
    Ouais ! Pis j'utilises le francais pour faire chier des epais comme toi, qui sont obliges de prendre un dictionnaire pour comprendre qu'ils sont imbeciles, sans culture, sans education et sans instruction.
    Reply
  •  
    Apr 15 03:09 AM
    Mobile Mac is not there! Could you use 2 applications on iPhone at the same time? Nope! but MOTO linux could do that as well as blackberry and HTC Windows mobile phone, so you could not use only iPhone in your daily work, so iPhone is not The Ultimate Phone.....
    read more on simonsays.blogbus.com/
    Reply
  •  
    Apr 15 04:32 AM
    I have little to add to y'alls' (we talks like that in the south) erudite musings.

    This has nothing to do with Canada vs YankeeLand (truth be told, I'm happier than a clam when someone asks if I'm Canadian; you Canadians have the plus side of an American accent [women in the UK love it, trust me], can disclaim the last 50 years of US foreign policy AND don't have to turn red from embarrassment when someone tells you the latest "Bush-ism."

    This is instead about two companies with vastly different visions and products to back it up. As one of my esteemed co-bloggers noted, RIMM is a one-trick pony; a recent stat I saw indicated that 79% of customers were very satisfied with iPhone vs 54% with the BB...AND the iPhone was Apple's very first effort in the mobile device market. that 25% difference in customer satisfaction should disturb anyone owning RIMM. PALM is likely to belly up in 12 months; how long will RIMM survive without a second product line? One might argue that Apple could lose one of its three (Macs, phones, iPods) products lines tomorrow and still be a viable business. Could RIMM?
    Reply
  •  
    Apr 15 07:43 AM
    The iPhone market share is increasing mainly on the back Palm, for now. As soon as iPhone 2.0 arrives, RIMs market share will slowly but surely dissolve into Apple's cauldron.

    I predict by the end of 2009, Apple's iPhone will eclipse the B;ackberry.

    -zach bass
    zachbass.blogspot.com
    Reply
  •  
    Apr 15 09:39 AM
    Mac OSX is the great software in both computer and iPhone, why we need other.

    iPhone can be a smart mobile phone, a musical and video player, a 3D game machine, a GPS maping device, a business handset as well as a digital camera and camcorder without too many mechanical button.

    Software developers help to make the iPhone hardware to suit various customers need.
    Reply
  •  
    Apr 15 10:14 AM
    So I guess "...qu'ils sont imbeciles, sans culture, sans education et sans instruction" must be French for "You're correct, I misspelled a word in my post wherein I claimed that extra sales of iPhones to countries without carrier contracts are somehow lost revenue to Apple. The spelling mistake was irrelevant to my argument, which was of course silly and illogical. The more important thing to remember is that I'm a well-bred and polite Canadian, and thus my insults and rabid attacks shower glory on my country's reputation."
    Reply
  •  
    Apr 15 11:31 AM
    to: Thinking Ahead

    Question: What does the housing market have to to with Apple's iPhone and the Blackberry?

    Answer: Absolutely Nothing.

    Another question: What does Canada have to do with Apple
    s iPhone and the Blackberry in relation to this article?

    Answer: Absolutely Nothing

    Stay on topic, state acqurrate facts about the companies and their products. It's not that hard.
    Reply
  •  
    Apr 15 12:01 PM
    This is an article written from the point of view of someone very excited about Apple (Am I not cool unless I use their stock symbol? haha) however you have to take a step back and look at the market as a whole. The iPhone is an AWESOME device and it is no doubt revolutionary however the iPhone and Blackberry still go after different markets. iPhone is great for media and music however when it comes to straight up business use you can't beat the BBerry.

    They will support business now with the iPhone but so many companies have already set up their networks for BBerries and won't be too excited about changing them all over. Also for many people who have to have a blackberry for their work there are lots of different options i.e. pearl, curve, 88xx. Until I see an iPhone with push email for all accounts, GPS and 3G (granted ATT and TMO Blackberries don't have it but will soon) I don't think the business market is going to switch to the iPhone
    Reply
  •  
    Apr 15 01:36 PM
    Comedy here, pure comedy. One won't eat the other's lunch. They both will do very well in time. Not every consumer will want an iPhone and not every business user will want a BB. The smartphone market is growing too quickly.

    Just remember how much experience RIM has in wireless technology relative to Apple. As bandwidth increases, so do the demands on the devices. Anyone here who gets 200 plus emails a day and switches to the new 3G iPhone thinking that it is the panacea may be very unhappy with battery life. And without replaceable batteries this could be magnified. I hope Apple addresses this somehow, but this is a risk.

    Activesync uses a tremendous amount of battery life - add the 3G power hungry chipset and a very large screen and you have the potential for significantly reduced battery life. RIM's architecture actually is a true push (not an "active" "sync" where device pings server over and over and then syncs) so only the bits required are delivered, which reduces radio transmitting time and helps battery life. RIM also compresses the data which is another benefit.

    The bottom line here guys is that iPhone no doubt is an amazing device and will fare extremely well BUT do not underestimate how the underlying technology implementations affects the end user experience which could affect adoption rates. RIM really does have a huge advantage in this area as devices get even more complex and the demands placed on the devices continue to escalate. just my $.02. I own both and expect great performance form each as the smartphone adoption curve kicks in big time.
    Reply
  •  
    Apr 15 01:56 PM
    MR. White
    1. Apple makes most of its revenue from selling discretionary products to the US consumer. Is that clear enough now?

    2. Canada? What are you talking about? I never wrote anything about Canada.
    Reply
  •  
    Apr 15 02:06 PM
    To Thinking ahead:

    I know what Apple does, been using their products for almost 20 years. They don't make houses though. So it was weird to see something so off subject into the conversation that had no purpose being there in the first place.

    The Canada comment was towards Proud Canadian.

    I think so far the best responses, well thought out and that addressed the "topic" well has been MattofBostone & J Lazerow. Well done guys and I think your both right.

    It will be interesting to see the outcome of both phones and the technology insipired from this.
    Reply
  •  
    Apr 15 09:17 PM
    "On another note, I also think Palm (PALM) will be out of business in 12 months."

    Wow, that's one bold statement if I ever heard one. Just because you use iphone and BB exclusively, it doesn't mean that other vendors are not doing well. iphone is doing poorly in Europe, and BB never gained the same kind of market shares in Europea as it did in North America.

    And if you ever take a look at Palm's balance sheets and cash flow statements, you will know that Palm will definitely NOT be out of business in 12 months.

    It is one thing to go out and proclaim company XYZ will be out of business in one year; it is another to acutally have the facts and data to backup your claim.

    Reply
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