The Future of Research in Motion: Will It Survive?

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Trefis
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Research In Motion

With mobile penetration increasing each and every year, it isn’t difficult to imagine that most major phone companies will see profit increases over the next several years. This certainly appears true, given our analysis of Research in Motion. (NASDAQ:RIMM) But is such an analysis consistent with the fact that Research in Motion is losing much of the market share to Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL)

Wold Wide Mobile Penetration

If Research in Motion can hold its ground, it seems evident that the company will grow. The market research firm, Mobile Intelligence estimated that the number of mobile phones in use in the world was roughly 50% of the total population of the world at the start of 2008. It was then estimated by Wireless Intelligence, a different market research firm, that worldwide mobile penetration rose to 70% in 2010.

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As this number continues to increase, it’s not difficult to see why Research in Motion (as well as other mobile phone providers) would see an increase in revenue. Trefis predicts that the global number of phones sold by Research in Motion will increase from the current annual number of 1.6 billion to 2.19 billion at the end of the forecast period.

Will Research in Motion Survive?

This, of course, is not as certain as many investors would like it to be. With top competitors like the iPhone and the Android, Research in Motion is going to have to step up their game in order to survive in this competitive market. Luckily, they already have some key advantages.

By focusing on security and enterprise device management, Research in Motion does have an advantage over other competitors… and for businessmen who are in security-conscious sectors, this is quite desirable.

Research in Motion also has a great chance to gain much of the market, albeit not when it comes to the upper-end phones. While the top competitors in the smartphone sector pump out brilliant phones that are quite pricey, Research in Motion provides a larger spread of phones – especially middle to low end phones, allowing for a broader range of users with varying budgets.

Research in Motion also has quite an advantage when it comes to certain features. Many users simply wish to use an actual QWERTY keyboard, and not a touch screen one. You simply cannot purchase an iPhone if you can’t stand a touch screen. Moreover, Blackberries have one weapon that is sure to help them: BBM. The instant messaging feature that can only be used between Blackberry phones is sure to help Research in Motion stabilize its share of the market.

While there are many reasons to think that Research in Motion is declining, there are conversely many reasons to think that the company can turn itself around and survive to see the increase in global mobile penetration, making this a company worth keeping an eye on.

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