Apple Can Withstand RIM's Storm Clouds

In the heavyweight match between RIM's BlackBerry Storm and Apple's iPhone, the iPhone is still the smartphone to beat.
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In the heavyweight match between

Reseach In Motion's


BlackBerry Storm and


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iPhone, the iPhone is still the smartphone to beat.

As devices go, the iPhone has its "oh-wow" pluses (the multi-touch screen) and a few "oh-no" minuses (no keyboard). But as a product, it's pure gold for Apple.

The same case can't be made for Research In Motion's Storm.

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subsidized 3G iPhone hit the 1 million sold mark in the first three days. In 2008, Apple sold 14 million iPhones. This year, amid a nasty recession, analysts expect Apple to sell about 16 million.

In contrast,



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subsidized BlackBerry Storm took two months to hit the 1 million sold milepost after its Nov. 21 introduction. That puts it on track to sell 6 million phones this year, well below the iPhone sales rate.

If anything, the Storm has been a

disruptive force

for RIM.

The BlackBerry maker has been taking on high costs trying to rush the Storm's production rate and keep its exclusive partner -- Verizon -- happy. The Storm is Verizon's hottest phone and its best weapon to stop big-spending subscribers from switching to AT&T's iPhone.

But all the new expenses have helped narrow RIM's margins to 40%, an alarming drop from the 50.7% level it enjoyed half a year ago.

This margin squeeze came as a surprise to investors who now fear that RIM's entry into the hotly competitive consumer market will erode its once-lucrative business built on high-paying corporate customers.

In the past year, Apple is down 30%. RIM has dropped 62% in the same period.

Clearly, the Storm hasn't been a calming influence on investors.