Apple and Samsung tighten chokehold on mobile profits as others' hope fades

When two companies make all the profit in a market, it's a race to the bottom for everyone else

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BlackBerry's comeback? Maybe
It's certainly no news that BlackBerry has garnered good press as it rolled out its newest smartphones, the Z10 and forthcoming Q10. But so far, those positive reviews haven't translated into strong sales. According to Cannacord's Walkley, "Sales levels for the Z10 are down sharply from the first week of launch. Our surveys indicated limited consumer interest, modest carrier support, and limited store representative support for the Z10."

Why are some analysts optimistic about BlackBerry? The 451 Group and its ChangeWave subsidiary survey enterprises that say they are committed to buying smartphones for their employees. In a recent study, 32 percent of those businesses said they will buy BlackBerrys, up from 29 percent in the preceding quarter.

Three additional points of share for non-BYOD companies doesn't sound like much to celebrate, but 451's Hazelton reminds me the quarter-to-quarter uptick was only the second time in the last five years that BlackBerry has shown improvement.

To be clear, the sales Hazelton expects are not from BYOD; they are purchases by the enterprise. "Once companies switch away from BlackBerry, it will be hard to get them back, but they still have tens of thousands of companies using BlackbBrry Enterprise Server, and the upgrade to BES 10 is easy," he adds.

Microsoft's Windows Phone platform also showed an increase in the 451 Group survey, with 11 percent of those enterprise smartphone buyers favoring it, up from 9 percent in the previous quarter. Those numbers, though, are dwarfed by iOS at 61 percent and Android at 38 percent.

As is often the case, different analyst have differing opinions, and Andrew Borg, the research director for enterprise mobility at the Aberdeen Group, doesn't hold a positive view of BlackBerry's chances for recovery. "Our numbers don't support that," he tells me. Aberdeen's research indicates that BlackBerry's enterprise market share will continue to shrink in the coming months. The company has lost a good deal of brand equity, and its legacy products are expensive to maintain. "The reference standard in the enterprise is iOS -- so why move back to BlackBerry?"

Borg's view of the market is global. He sees the distinction between feature phones and smartphones blurring quickly and the demand for phones that can reach the Internet soaring in the developing world. That might sound like good news for BlackBerry, but it isn't. BlackBerry, he says, was making money by selling cheap phones in Asia and offering a device that had built-in messaging, thus saving users carrier's SMS charges. But now that other carriers have similar features, BlackBerry's advantage is disappearing.

Borg envisions a market led in the developed world by sophisticated devices from Apple and Samsung, while much cheaper smartphones from Huawei and any number of no-name manufacturers dominate the developing world. "It will be a race to the bottom" that could squeeze out midrange providers like Nokia, LG, HTC, and maybe even ZTE, he says.

It's a hard fall for once high-flying BlackBerry, Motorola, and Nokia -- and for Microsoft, whose Windows Mobile once was a key operating system. And it's a hard reality for HTC, LG, and new entrants Huawei and ZTE.

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This article, "Apple and Samsung tighten chokehold on mobile profits as others' hope fades," was originally published by Read more of Bill Snyder's Tech's Bottom Line blog and follow the latest technology business developments at For the latest business technology news, follow on Twitter.

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