BUSINESS

BlackBerry ousted from top spot in Canada by Apple's iPhone: report

03/22/2012 12:53 EDT | Updated 05/22/2012 05:12 EDT
MONTREAL - Canadians have been hanging up on Research in Motion's BlackBerrys and answering iPhones.

A technology expert said Thursday it's no surprise Research In Motion (TSX:RIM) has been ousted from the top spot in the Canadian smartphone market by Apple's iPhone.

"The new smartphones that compete with BlackBerry — they're not worse and they're cooler," said Queen's University marketing professor and tech expert John Pliniussen.

The Waterloo, Ont., company shipped just more than two million BlackBerrys last year in Canada, compared with 2.85 million units for Apple, says a report by Bloomberg, based on data compiled by Bloomberg and tech trends firm IDC.

Smartphones using Google's Android operating system, like Samsung, Motorola and HTC, also have been eating away at RIM's market share globally.

RIM has stepped up its marketing efforts to promote BlackBerrys in North America, especially the lucrative U.S. market, where tech savvy consumers haven't been buying as many of them.

Pliniussen said it's not "unforgettable" marketing but it is creating a footprint.

The problem seems to be at the retail level, where consumers buy their smartphones, said Pliniussen, who's based in Kingston, Ont.

BlackBerrys aren't being pitched enough to consumers, he said, adding he was asked by a sales person why he didn't have an iPhone.

"The average business person is seeing everybody using Apples and there is a seduction about being cool and having the latest."

RIM's new leadership will have to deal with Canadians moving away from BlackBerrys.

"How the new CEO Thorsten Heins handles this will provide a glimpse into his ability to deal with the misery, pain and suffering RIM and its shareholders have been experiencing."

RIM's stock hit a high of almost $140 per share in 2008 and is now trading just under $14 per share.

In the corporate market where RIM is known for its security, it is also facing challenges, as employees bring their consumer smartphone tastes into the workplace. Some corporations and U.S. government agencies have been moving away from BlackBerrys to iPhones.

RIM's next-generation of BlackBerry smartphones won't be out until later this year, leaving the company with few new products to sell.

Research In Motion reports its fourth-quarter financial results on March 29, and it's expected to be another tough quarter for the smartphone maker.

UBS analyst Phillip Huang has estimated that 11.5 million smartphones and 375,000 PlayBook computer tablets will have been shipped during the fourth quarter.

"We expect a tough transition over the next couple of quarters for RIM and remain on the sidelines," Huang said in a recent research note.

Shares in Research In Motion closed down 20 cents to $13.75 in trading on the Toronto Stock Exchange.