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The introduction of both native third-party applications and enterprise support to the iPhone is likely to sap further marketshare away from Palm and Research in Motion, says an investor note from Needham & Co.
The BlackBerry maker in particular faces the greatest impact. Although it remains the definitive leader in business with the largest amount of US marketshare and close competition with Windows Mobile worldwide, the Canadian company could see its growth "slow materially" from the June quarter onwards. Once quality third-party apps are available for the iPhone, there will be less incentive to use BlackBerries for their software.
In light of the Apple development kit, RIM's development environment is "comparatively primitive" and will likely result in nothing more than essential "meat and potatoes" apps for the BlackBerry, Wolf says.
And while Exchange support for the iPhone will give it secure "push" email similar to the BlackBerry, making it an option for businesses that have previously had to rule out Apple's handset, the real danger in the long term is for the BlackBerry's early steps into the consumer marketplace. The analyst contends that RIM has a competent platform in its OS and phones like the Pearl, but also that its breakneck growth is more a virtue of providing a capable offering versus incompetent alternatives.
"BlackBerry is currently the front-runner in the consumer smartphone market in part because it met the criteria for success in this market and in part because its competitors until quite recently were simply inept," the Needham researcher elaborates. "Their failure stemmed less from their ability to design sleek phones than in their choice of an operating system on which to run them."
Wolf singles out Windows Mobile as possibly driving many customers into RIM's arms with a "difficult" OS that may satisfy the enterprise but often pushes consumers towards the BlackBerry and other alternatives. Apple is and will be stealing some of RIM's success because it's the first competitor to offer a genuine alternative for consumers who want a smartphone.
The other major American smartphone maker, Palm, is already placed in a poor position by the analyst. Most of the damage done to Palm is said to be self-inflicted through complacency — neither the OS nor the phones have changed significantly for years, Wolf adds — but the addition of Exchange and third-party apps to Apple's phone will add another competitor to a market that has already downplayed Palm's efforts.
Palm's new Centro smartphone is also characterized as a stopgap measure to tide users over until a real, Linux-based Treo replacement is available near the end of 2008. It sells for as little as $99 but isn't seen as capable of holding its own against either the iPhone or other rivals for the next few quarters. Most customers are attracted to the Centro for its price rather than its feature set, a situation the Needham researcher says is likely to change once prices drop.
"Itâs little more than a down sized Treo," he comments.