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Whoever Does This First Will Be the Winner in the Smartphone Market

2013-07-27 17:45:12 

CEO Thorsten Heins of BlackBerry (NASDAQ/BBRY) may be smart to start thinking about looking for a new job. No, there’s no evidence he will be fired anytime soon. Hired in early 2012, Heins has been at the job just over a year. But while he may be the company’s biggest cheerleader, his enthusiasm has not spread to the stock market.

Having launched to rave reviews, the new “Z10” and “Q10” are excellent products—unfortunately, you need more to attract customers. Like I said back in March, the two new BlackBerry devices were really make-or-break for the company, and so far, it doesn’t look good. (Read “RIM Replacing Apple as the Stock Market’s Tech Darling?”)

Having looked at the Z10, I must say it’s a nicer-looking device than my current “iPhone 4.” The Q10, with its physical keyboard, reminds me of my old BlackBerry.

The problem I have—and that I suspect many potential buyers have—is that there’s just not enough to make me want to switch over to the new BlackBerry at this time. I’m pretty sure Heins now realizes this, especially with Apple Inc.’s (NASDAQ/AAPL) dominance of the U.S. market.

The chart below shows the downward move of BlackBerry (indicated by the red candlesticks) versus the upward move by Apple (shown by the green line).

Whoever Does This First Will Be the Winner in the Smartphone Market image BlackBerry Chart3BlackBerry Chart

Chart courtesy of www.StockCharts.com

BlackBerry is probably better off focusing on improving its devices and looking to the billions of users in the emerging markets like China, Asia, Latin America, and Eastern Europe.

These are the markets where the demand is for cheap yet still powerful phones. Apple, which has yet to produce a cheap version of its iPhone (there is speculation this may come), is well behind rivals Samsung Electronics Co. Ltd. and Nokia Corporation (NYSE/NOK) in the emerging markets. Nokia continues to be the king of the inexpensive phone. And until Apple comes out with a much cheaper version of the iPhone, I doubt it will gain any traction here. Users in these markets simply cannot afford expensive phones and plans.

Apple will need to somehow get into the emerging markets, as the company is stalling in its growth. The company will need to look outside of its dominant market in the United States to boost growth; until this happens, I doubt Apple can rally back to its record $705.00 high in September 2012.

The same goes for BlackBerry, but the situation is much worse. With minimal success in the U.S., unless it vaults over Apple, Heins will need a “Plan B” for BlackBerry’s survival, which should be to look at expanding into the emerging markets. Of course, even this won’t be easy, as the emerging markets are highly competitive.

So the battle continues. I don’t like BlackBerry, Apple is marginally better, but Samsung looks the most interesting; albeit, only time will tell. Movement into the emerging markets may just be what decides the fates of smartphone makers in today’s market.

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(By George Leong | Business 2 Community )