2010 has not been Research in Motion‘s (NASDAQ: RIMM) year. The BlackBerry manufacturer now trails Apple Inc. (NASDAQ: AAPL), LG Electronics, Samsung, and Nokia (NYSE: NOK) as the number 5 mobile phone manufacturer in the world. A new study from the NPD Group and UK-based research firm Canalys shows that phones running on Google‘s (NASDAQ: GOOG) Android operating system eroded a huge portion of Research in Motion’s market share in the third quarter of 2010.
NPD executive director Ross Rubin said RIMM’s market share, based solely on penetration of the BlackBerry operating system, fell -52% year on year in the third quarter. Now, to make matters worse, Research in Motion is losing its most reliable clients: The enterprise market.
Two of Research in Motion’s biggest corporate clients, Bank of America (NYSE: BAC) and Citigroup Inc. (NYSE: C) are now testing both Apple’s iPhone and phones using Google’s Android as their smartphone operating system of choice for employees. According to a Bloomberg report published this week, Bank of America has already moved into the advanced stages of testing which could, after another month of testing, lead to a pilot program in anticipation of a company wide shift to using either Apple or Google’s phones rather than Research in Motion’s BlackBerry phones.
Both Citigroup and Bank of America have traditionally provided their employees and executives with company connected BlackBerry phones that are used in tandem with personal mobile phones. After close to a decade of the status quo, the banking corporations are turning to smartphone tech that is both more fashionable and more functional than even RIMM’s new BlackBerry 6 operating system. Bloomberg is also reporting that Swiss bank UBS and JP Morgan Chase (NYSE: JPM) will follow Citibank and Bank of America’s lead in switching over to either Google or Apple’s smartphone options.
Other technology companies are also shifting away from Research in Motion’s BlackBerry. Rather than pay for an outside corporate smartphone solution, Dell (NASDAQ: DELL) announced today that they are going to start providing employees with the company’s own Venue Pro smartphone. The new phone, powered by Microsoft‘s (NASDAQ: MSFT) Windows Phone 7 operating system, will cut Dell’s communications costs by one quarter according to the Wall Street Journal. It also means that Research in Motion will lose 25,000 BlackBerry users in one fell swoop.
If Research in Motion hopes to recapture the enterprise market, it may have to shift its focus away from the BlackBerry smartphone line to the new BlackBerry PlayBook tablet computer. While Apple is growing a strong base of corporate clients for the iPad, the enterprise world is far from finding a standard tablet solution. If the company acts quickly to offer corporate customers aggressive package deals that bond their smartphones to the PlayBook tablet, RIMM might be able to win back their greatest source of revenue. If the PlayBook fails to steal an audience away from the iPad though, Research in Motion should be concerned about watching their mobile market share continue to plummet.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
