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

(RIMM)

BlackBerry Storm and

Apple's

(AAPL) - Get Report

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.

var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 15196279001; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);

The

AT&T's

(T) - Get Report

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,

Verizon

's

(VZ) - Get Report

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.