The Smartphone Wars: Circling the RIM
<p>It&#8217;s been a quiet week in the smartphone wars.  The three most interesting developments are (a) stock analysts have begun hanging crepe for RIM&#8217;s funeral, (b) HP has priced its WebOS tablet to die, and (c) the iPhone 5 is now not expected in September, being constrained by iOS 5&#8217;s ship date.</p>
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<p>RIM&#8217;s stock price has been badly hammered in recent weeks by plummeting market share and the failure of the Playbook launch.  Layoffs have been announced.  Typical coverage these days asks <a href="http://www.huffingtonpost.com/2011/06/17/rim-blackberry_n_879552.html">whether RIM can survive</a>. <a href="http://www.bloomberg.com/news/2011-06-21/rim-takeover-beckons-microsoft-with-cheapest-multiple-real-m-a.html">Takeover talk has begun</a>, with Dell and Microsoft mentioned as possible buyers.  App developers are <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/06/20/businessinsider-seesmic-stops-supporting-the-blackberry-2011-6.DTL">bailing out.</a>  </p>
<p>For months I thought there was a strong possibility that RIM would soft-land in a defensible market niche around its business customers.  But the last quarter has been blunder after blunder; RIM simply is not behaving like a company with the capability to pull out of a death spiral.  I&#8217;d say we&#8217;re about seven months plus or minus two from a crash or buyout.</p>
<p>HP&#8217;s WebOS-based TouchPad tablet is out, and Jason Perlow is <a href="http://www.zdnet.com/blog/perlow/hps-touchpad-dead-on-arrival/17577">devastating</a> about the problem with it, repeating a theme I&#8217;ve been sounding here for months.  The TouchPad, and all of the iPad&#8217;s other competitors, are priced to sink like stones.  Product planners all over the industry are living in a ludicrous fantasy if they think they can compete with the iPad at the iPad&#8217;s price point; Apple&#8217;s brand strength makes this suicidal.  They need to cut margins and prices until it hurts, and then cut a bit more, to get traction.  HP is not doing this and consequently HP will fail.</p>
<p>But Apple has troubles of its own.  Word is that the iPhone 5 <a href="http://www.ibtimes.com/articles/166400/20110621/twist-in-tale-no-iphone-5-on-september-7-it-could-arrive-in-octobe-november-android-os-droid-bionic.htm">won&#8217;t ship in September</a> because iOS 5 won&#8217;t be ready by then.  On Apple&#8217;s hints about the iOS 5 release date, the iPhone 5 could be delayed as late as November.  And it&#8217;s not going to be a full update, either, just a processor and camera upgrade; some rumors have it being branded as the &#8216;4S&#8217;, with &#8216;5&#8217; reserved for a major upgrade in 2012.</p>
<p>Apple&#8217;s problem is that the new iPhone, 4S or 5, is going to be facing <a href="http://www.ibtimes.com/articles/165893/20110620/apple-iphone-5-ios-5-samsung-galaxy-s-2-htc-sensation-htc-evo-3d-motorola-photon-atrix-android-2-3-g.htm">brutal competition</a> from upcoming Androids like the Samsung Galaxy S 2, HTC Sensation, EVO 3D, and the rumored Nexus 4G.  All these phones will be offering 4G, display technology fully as good as the Apple &#8220;retina screen&#8221; and probably faster processors.  </p>
<p>A weak iPhone upgrade simply won&#8217;t fare well against these phones.  Falling behind in 4G/LTE support is particularly likely to lose Apple high-end sales.  And a poor 2011 Christmas season could completely finish off the iPhone&#8217;s chances of regaining lost ground.</p>
