This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Apple and Google Dominance Extinguishes Hope For RIM

NEW YORK ( TheStreet) -- Apple (AAPL - Get Report) is once again demonstrating to fans and critics alike why it is not only the most profitable mobile-phone maker, but the most valuable company ever.

Sadly for Nokia (NOK - Get Report) and Research In Motion (RIMM), the iPhone 5 may not be the catalyst for their downward circling of the proverbial drain. RIM is already within the event horizon. Escape from the gravitational pull is unlikely, with Nokia not far behind.

How can we be sure RIM gets extinguished? After all, sales in several large markets continue to grow. Indonesia, for example, is a market where RIM continues to demonstrate effective merchandising. Sales in India at the start of 2012 have never been stronger.

But what the big print giveth, the fine print taketh away. Not all sales are alike. Selling large volumes of phones doesn't mean large profits. RIM had to cut prices in India, and, even after price cuts, sales may have peaked. In the lucrative North American market, RIM smartphone sales have fallen to under 10%.

In a growing market with many competitors, a 10% market share could be great. But in a maturing market, with two large dominant smartphone ecosystems -- those of Apple and Google (GOOG - Get Report) -- a third-place single-digit market share equals loss of critical mass.

Five years ago, critical mass didn't mean very much. Today, mobile phones are as much mobile computers as they are phones. IPhone and Android have 300,000 plus apps each, while BlackBerry has about 70,000. Granted some are worthless. But all else being equal, which phone do you pick? Or perhaps more importantly, which phone will the average consumer pick, if they don't already have a preference?

You can bet (as many short sellers have, based on the short interest in RIM) most consumers will continue to pick an Android or iPhone when the salesperson informs them that BlackBerry has about one third as many apps.

Because app developers add two and two as easy as the consumer, it becomes a vicious cycle of low consumer interest feeding low developer interest. We get the loss of critical mass so important to iPhone and Android.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $130.54 0.20%
GOOG $533.99 0.35%
NOK $7.26 -0.41%
MSFT $47.23 0.79%
FB $80.29 1.39%

Markets

DOW 18,040.37 +29.69 0.16%
S&P 500 2,111.73 +4.34 0.21%
NASDAQ 5,082.9290 +12.9030 0.25%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs