RIM misses IDC's Top 5 list again
Increased competition from Apple's iPhone, myriad Android phones keep's RIM's mobile phone market share flagging
Computerworld - Another quarter ended with Research in Motion missing from IDC's ranking of Top 5 worldwide mobile phone makers as the Canadian manufacturer continues to face growing competition, much of it from lesser-known companies that put more emphasis on smartphones than ordinary cell phones.
The continuing troubles of RIM in the first quarter are troubling to analysts and investors alike because it had held such a strong position in the smartphone business for years.
The company's market share has been declining over the past year due to increased competition from Apple's iPhone and various Android smartphones, including those made by ZTE, which IDC ranked fifth in global mobile phone market share during the quarter.
ZTE, based in Shenzhen, China, is not yet well known to Americans, but plans to increase brand awareness in the U.S. as part of a concerted effort to ship more smartphones and low-cost feature phones to users interested in limited features like texting, IDC said.
ZTE finished the first quarter with 4% of the mobile phone market, behind Apple with 5%, LG Electronics with 6.6%, Samsung with 18.8% and top seller Nokia with 29.2%.
IDC said 372 million smartphones and feature cell phones shipped globally in the first quarter, up nearly 20% from the 310 million shipped in the first quarter of 2010.
Yesterday, RIM warned that its first quarter earnings will be lower than expected due mainly to its expectation that smartphone sales were on the low end of its projection that 13.5 million to 14.5 million ship during the period.
RIM's stock price has declined by 10% since the warning was made.
Mike Abramsky, an analyst at RBC DominionSecurities, Friday downgraded RIM's stock from "top pick" to "sector perform," citing expected smartphone sales slowdowns in the U.S. and Latin America. "Coming just four weeks after providing soft Q1 guidance, this warning raises questions over RIM's visibility into its own business," Ambramsky wrote.
Abramsky said that he's also concerned about RIM's warning of smartphone launch delays later in 2011 and of the "less-than-favorable debut" of the the company's PlayBook tablet on April 19.
RIM was last in the top five mobile phone market share ranking in the second quarter of 2010, when it finished fifth. It had finished fourth in mobile phone shipments globally in the first quarter of 2010, according to Ramon Llamas, an IDC analyst.
"We all wonder what's up with RIM," Llamas said.
Overall, RIM is still selling more smartphones than a year ago, but has slipped in rank due to the pressures from ZTE and other phone makers like Micromax, TCL-Alcatel, and Huawei, IDC said.
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