RIM Gropes for International Sales as Bottom Line Slides

Demand for mobile devices is surging in markets around the world, and Research In Motion says it’s making headway in places outside of its native North America.

“All the real subscriber growth is international,” Maribel Lopez, principal analyst at Lopez Research, told the E-Commerce Times. “You have to sell phones in India, China and other developing countries or you’ll miss the opportunity to onboard the next billion mobile users.”

At the end of 2011, RIM “was strongest in EMEA — Europe, the Middle East and Africa,” Ramon Llamas, a senior analyst at IDC, said. The other markets in order of descending importance were North America, Latin America, then the Asia-Pacific.

Why, then, do RIM’s financial results indicate it’s floundering? For its most recently finished quarter, it reported a loss of US$125 million. Revenue was down 25 percent year over year, and phone shipments had slipped 21 percent from the previous quarter.

Its problems could be partially due to its relatively poor showing in North America.

North America “is one of the two largest markets for mobile phones, the other being China, and RIM keeps stating it anticipates a decline in the installed base in North America,” Llamas pointed out. “To say you anticipate a decline in one of the largest markets in the world tells us why your future doesn’t look so bright.”

Outward Bound

Despite its North American decline, RIM’s been blitzing overseas markets. On Wednesday it introduced the BlackBerry Curve 9220 in India. In March it announced the launch of BlackBerry services for consumers in China together with its partner China Unicom, the second largest wireless services provider in that country.

Earlier this month, RIM launched four new smartphones running BlackBerry OS 7 in Cambodia. The company also announced earlier this month that its BlackBerry App World app store is now available to customers in Brunei.

Since March, RIM has launched new products and services in Benin and South Africa.

The Price Isn’t Right

However, even with all its international endeavors, RIM might still have trouble repairing its balance sheet.

The international market “is highly competitive — and it’s difficult to hit the right price point,” Lopez Research’s Lopez said.

For example, the BlackBerry Curve 9220 introduced in India Wednesday is reportedly priced at US$210. In a nation where the gross national income per capita is $1,340, that price point could be difficult to swallow.

“Mobile operators in emerging markets across Asia, particularly India and Indonesia, have been asking RIM to offer devices at a lower cost,” Llamas told the E-Commerce Times.

RIM did not respond to our request for comment for this story.

Swimming With the Sharks

Competition in the international mobile device market is very stiff.

“On a global basis, RIM is trailing the likes of Nokia, Samsung and Apple,” IDC’s Llamas said. “HTC’s in the mix, but it’s going to have a struggle this year.”

With the exception of Apple, RIM’s competitors offer devices running Android, which is a “powerful asset,” Llamas said. “The BlackBerry is a great platform for messaging, but it’s very unpopular for applications, and when users move past the messaging part towards apps, they’ll ask themselves where are the apps they could have if they had an Android or iPhone.”

In other words, RIM might fall further behind once overseas markets mature.

Other Issues at RIM

RIM is a company in transition, having undergone major changes on top in recent months.

Meanwhile, the next version of its operating system — BlackBerry 10 — has been delayed to later this year, and that lag makes “2012 a gift-wrapped present from RIM to the competition,” Llamas suggested.

“When BlackBerry 10 does come out, it will take time to get users educated about it, and that will leave the competition a lot of time,” Llamas elaborated. “Also, BlackBerry 10 will probably launch first in some of the core markets, and it’ll be launched elsewhere later.”

These delays will cost RIM, but they’re “to be expected with a company in transition,” IDC’s Llamas said. “Any time a company’s in transition, it’s going to take some time to recover, while the rest of the market is moving ahead.”