Yahoo Says Yes to Mobile, No to RIMM

Mayer left BlackBerries behind: a bad sign for the phone's future

By Brad Moon, InvestorPlace Contributor

Marissa Mayer has a well-earned reputation for being on top of technology trends. And as the new CEO of Yahoo (NASDAQ:YHOO) and a former Vice President of Google (NASAQ:GOOG), she has the clout to make her moves worth noting — especially when it comes to predicting future technology trends.

So when Yahoo announced it was giving free smartphones to its employees — and laid out which models were being offered — her company was not very subtly telegraphing where it believes the future lies: mobile. And, of course, where the future doesn’t lie: with Research in Motion’s (NASDAQ:RIMM) BlackBerry devices.

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Within the text of the memo (below, via Forbes) is Mayer’s take on where the smartphone market is going:

We have a very exciting update to share with you today — we are announcing Yahoo! Smart Phones, Smart Fun! As of today, Yahoo is moving off of blackberries [sic] as our corporate phones and on to smartphones in 22 countries.

A few weeks ago, we said that we would look into smartphone penetration rates globally and take those rates into account when deciding on corporate phones. Ideally, we’d like our employees to have devices similar to our users, so we can think and work as the majority of our users do.

The smartphone choices that we are including in the program are: Apple (NASDAQ:AAPL) iPhone; Android: Samsung Galaxy S3, HTC One X, HTC EVO 4G LTE; and Windows Phone 8: Nokia Lumia 920.

 We’re … taking orders starting now.

Putting free smartphones into the hands of employees is a smart move on Mayer’s part and another nod to the growing BYOD movement in corporate culture.

Yes, it improves morale at a company that’s had more than its share of knocks recently, but more importantly, it makes sure that Yahoo employees use the devices that their customers are using. They’ll see the same advantages and experience the same frustrations — which should pay off in a better user experience as they apply these lessons to their job and to Yahoo’s products.

Yahoo’s decision to not only exclude BlackBerries from the employee smartphone program, but to end corporate IT support for the BlackBerry platform deals two PR blows to RIM. Mayer clearly believes that there will be no RIM recovery — at least not one that will see the company survive as anything more than a niche player.

And Yahoo is instead betting that Windows Phone 8 will supplant the BlackBerry as the smartphone platform of choice for consumers that want an iPhone/Android alternative. Plus, by booting BlackBerry devices off its corporate network, the company is joining an increasing movement away from the platform among RIM’s core, enterprise customers.

Research in Motion isn’t the only one being knocked by the move, though. Instead, this is just further proof that — while computers aren’t going anywhere anytime soon — their dominance is beginning to erode. We are moving into what has often been referred to as a “Post-PC” era.

This trend was given further credence by a report released by IHS iSuppli showing that PCs accounted for under 50% of the world’s DRAM shipments in the second quarter for the first time since the 1980s — when they were a relatively new product category. Mobile devices such as smartphones and tablets are gobbling up an ever increasing share of memory chips, and the report predicts PC share of DRAM will continue its slide, hitting under 43% by the end of 2013.

In addition, the mobile share of web traffic continues to climb; it hit 20% of total web traffic in the U.S. and Canada earlier this year, according to All Things D. Worldwide, mobile web traffic is growing at a triple digit pace, annually. So it makes sense that Yahoo signal an increasing focus on mobile.

And, actually, it makes sense that the Blackberry isn’t a part of that focus. As Mayer mentioned indirectly, the total U.S. mobile subscriber share among platforms in the three months ending July 2012 looked like this: Google’s Android holds a lead of 51%, followed by Apple’s iOS at 31%, with RIM’s BlackBerry at 12% and Microsoft’s (NASDAQ:MSFT) Windows Mobile at 4%.

RIM captured just under 2% of worldwide smartphone sales in Q2 2012, though, illustrating its challenge: despite its market share, it continues sliding. Unit sales are down significantly as users either defect to other platforms or hold on to their existing devices in anticipation of the delayed 2013 release of new BB10 smartphones.

Meanwhile, RIM’s share of web traffic has dropped to the point of near irrelevance — just 1% of mobile web traffic.

That’s just more fodder falling into the bad news category that the BlackBerry maker needs to confront and counter as it continues to work on the BB10 smartphones. In fact, this latest bit of negative publicity helped shave 3.1% of RIMM shares on Monday morning.

In the end, Mayer and Yahoo aren’t the only ones leaving Research in Motion behind.

As of this writing, Brad Moon did not own a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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