RIM’s BlackBerry Expected to Gain Share Despite Competitive Pressure
Research in Motion’s (NASDAQ:RIMM) BlackBerry market share in mobile phones sold increased from 0.3% in 2004 to 2.7% in 2009 [1]. We forecast that RIM will see increased market share due to growth of the smartphone market within the overall mobile phone market. Although the mix of smartphones within the mobile phone market is growing, the smartphone landscape is extremely competitive with players like Apple (NASDAQ:AAPL), Motorola (NYSE:MOT), Nokia (NYSE:NOK) and Google (NASDAQ:GOOG) vying for leadership.
We currently have a Trefis price estimate of $72 for Research in Motion’s stock, about 55% above the current market price of $48.
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The growing demand for continuous e-mail access is driving smartphone adoption among enterprise and retail customers alike. Increasing availability of high-speed wireless networks enable convergence of voice and data onto devices like the BlackBerry. In addition, smartphones have a lot of growth potential in emerging markets like India and China.
Despite the introduction of competing smartphones, RIM’s BlackBerry remains prevalent amongst large business customers due to its track record of security and reliability. RIM is also working to make a wider range of applications available on its BlackBerry phones so that it can compete better with Apple, which boasts of a rich application platform.
However, rising popularity of Apple’s iPhone and Android-based phones could be a hurdle to BlackBerry’s growth.
The average of Trefis member forecasts for BlackBerry Mobile Phone Market Share indicate an increase from 4.1% in 2010 to 8.5% by 2016, compared to the baseline Trefis estimate of an increase from 3.7 % in 2010 to 7.8 % by the end of the Trefis forecast period. The member estimates imply an upside of 10% to the Trefis price estimate for Research in Motion’s stock.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of RIM’s stock to BlackBerry Mobile Phone Market Share.
Our complete analysis for Research in Motion’s stock is here.
Notes:
1. We have calculated BlacBerry’s Market Share in Mobile Phones as: BlackBerries Sold / Global Mobile Phone Units. RIM reports total number of BlackBerries sold in its SEC filings. We have taken data on Global Mobile Phone Units sold from publicly released information by Gartner.