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Apple and RIM tussle for Q4 prizes as smartphones boom

By CAROLINE GABRIEL

Published: 7 November, 2008

READ MORE: Apple | RIM | Handset | Financial

Apple's impressive third quarter, driven by the iPhone, pushed the device into second place in smartphone sales during the period. Meanwhile, RIM is poised to go prepaid, in an effort to propel itself into the top rank again; while beleaguered Palm has seen its stocks on a rollercoaster this week.

According to smartphone analysts Canalys, the sector saw strong growth in the third quarter despite slowdown in the cellphone market as a whole, with 39.9m units shipped, up 28% on a year earlier. Nokia still had a comfortable lead in high end phones, with 38.9% of the sector, but this was down from a huge 51.4% share in Q307, as more vendors entered the market in earnest, and as it went through transition from older models like N95, to new ones like N96, which will not affect sales until late in the year.

Apple leapfrogged RIM to take 17.3% of the market, with its much vaunted 6.9m shipments, although the BlackBerry maker also had a good quarter, shifting 83% more smartphones than a year before. Canalys believes RIM will sieze back the number two spot in Q4 because of the release of several high profile new BlackBerry models, such as the Vodafone/Verizon Storm, the 3G Bold and the clamshell version of Pearl. The market is heavily divided over whether Apple will be able to sustain its shipment levels in Q4.

In more bad news for Windows Mobile, Apple shipped more iPhones in the quarter than the total of all handsets based on the Microsoft system, even though their numbers actually increased by 42%.

As well as new models, RIM is discussing prepaid business models with operators in a bid to boost its volumes and share, particularly in developing markets, where it has limited presence. So far, a prepaid version of its server-based BlackBerry services (led by the famous push email) has been seen only in Indonesia, but RIM is expected to ramp up the strategy in 2009 as it expands into consumer services, and into markets like India where mobile usage is massively weighted to pay-as-you-go. RIM has put together an internal strategy document for a prepaid attack, and has started talks with existing and potential operator partners.

Meanwhile, Palm saw its stock crash - and then rebound - after downgrades by Avian Securities and by one of the most positive analysts on Palm, Tavis McCourt of Morgan Keegan. McCourt changed his view because of Palm's potential need for fresh capital to complete its turnaround, despite the success of its affordable smartphone, the sub-$100 Centro.