Will BlackBerry kill the iPhone?

Will BlackBerry kill the iPhone?

Summary: Is it time for Apple to panic after the BlackBerry Curve outsold the iPhone for the first time in the last quarter? Here's what Apple should or shouldn't do to get back in the race.

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Just a few short weeks after the Mac trounced competitors in a customer satisfaction survey, the iPhone has repeated the same trick for Apple in the smartphone market.

The iPhone has taken first place in a consumer survey by J D Power published last week, dominating all but one of the categories: physical design, ease of operation, features, operating system, battery aspects and overall satisfaction.

Most iPhone owners won't be surprised to hear it came last in battery performance.

In contrast, RIM's BlackBerry - the competitor against which the iPhone is most often measured - scored highest in battery life but performed poorly in other categories.

According to a recent report by NPD, the BlackBerry has overtaken the iPhone in unit sales for the Q1 2009. RIM has been operating an aggressive buy-one-get-one US campaign and its sales have surged 15 per cent in the first quarter, though presumably at lower than normal hardware margins.

The news will no doubt prompt some doomsayers to predict the death of the iPhone or some other such nonsense and call for Apple to respond immediately with a host of new models.

Assuming it needs to, what could Apple do to drive up iPhone sales? The two obvious answers are to expand the iPhone product portfolio and to end their exclusive deals with carriers. Both ideas have had some coverage in recent weeks in the press and blogosphere.

While rumors of an iPhone 'nano' or 'lite' have been around for some time, the introduction of either looks unlikely in the short to medium term.

Apple is giving out a little at a time with the iPhone. Last year on the hardware front it got 3G connectivity and GPS. One would expect a couple of new features in the near future, possibly a better camera and improved video recording.

Of course the iPhone is really more about software than hardware and the 3.0 update will bring the long-demanded MMS update and, lest we forget, copy-and-paste. Hallelujah!

Battery life on the iPhone remains truly terrible, something I covered in an earlier article. It also appeared at the top of my wish list of 10 missing iPhone features.

It seems likely that Apple will announce new iPhone hardware early this summer. However, I don't think the company will diversify its iPhone product range just yet. Why? Because it doesn't need to. iPhone sales are very strong at the moment (3.8 million in the last quarter) and, according to the old aphorism, if it ain't broke don't fix it.

At the company's last earnings call, Apple's acting CEO Tim Cook said the company "chose from the beginning of the iPhone to focus on one phone for the whole of the world". That strategy is working just fine.

Another option for the company to consider, as a way to sell more iPhones, is to end its exclusive 'one carrier per territory' deals.

I'm not convinced Apple will change this model or if indeed it needs to. With its exclusive deals, Apple can sustain high margins on the iPhone. The company can play carriers off against each other to negotiate the best deal. Breaking from this model will mean losing some bargaining power - and possibly lowering its profit margins.

Lest we not forget that Apple is performing well in the smartphone market. Despite having been a player in less than 25 per cent of the mobile market for under two years, it's already a leading brand and an agenda setter.

iPhone sales remain buoyant despite both a depressed economic climate and the parameters it has set itself with its exclusive partnerships. It can continue to drip feed new products and features rather than rush them to market. New models will undoubtedly come, just not yet.

Personally, I tend to look forward to software releases more than new hardware. With that in mind, the keynote at the Worldwide Developers Conference in a month's time should prove exciting.

Predictions will follow later in the month.

This article was originally posted on silicon.com.

Topics: iPhone, Apple, Enterprise Software, Hardware, Mobility, BlackBerry, Smartphones

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35 comments
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  • ROFL

    Ha ha ha ha ha h aha ...
    lundp@...
    • I will stick with my Omnia.....

      It goes for about 3-5 days on one battery charge. Syncing activesync 24/7 as they arrive at the mail sever. 5 megapixel camera which is very good and would work fine as a replacement for a digi camera. Opera browser is excellent and works very well. Smaller device than the iphone which I like and outside of the apps the iphone really can't compare. I use SPB mobile interface which is very slick and I believe this is one of the best phones I have ever owned and I have had alot of smartphones in the past.
      OhTheHumanity
  • RE: Will BlackBerry kill the iPhone?

    Current beta 5 of iPhone 3.0 software disables and hides controls of MMS for ATT network. Looks like no MMS after all for US users.
    txscott
    • Non Issue

      It will be back in the shipping version no doubt.
      jgpmolloy
  • Pointless article

    What is the point of this article?

    Seems to me the title was supposed to be for another article and should have been something like...

    'Shameless plug for iPhone in a week when Blackberry has been taking the limelight'

    Of course Blackberry (or any other handeset manufacturer) won't kill the iPhone... only Apple can kill the iPhone.

    Move along... there's nothing to see here... move along... nothing to see...
    iTeaBoy
    • *golf clap*

      kudos iTeaBoy...ZDNet has become notorious for these types of empty articles...mainly specializing in iPhone fanaticism.
      parabyte
    • You are SO right!

      I'm thinking if ZDNet reporters have time to write these pointless stories then there are way, way too many of them.

      NOTE TO ZDNET HR: Fire a few reporters today starting with this guy.
      Jack516
      • NOTE TO JACK516...

        this story is a repost of an article on silicon.com, which is stated clearly.
        It is not a ZDNet-written story. "This guy" writes for silicon.com.

        It helps if you read the full article before posting responses.
        msalzberg
        • Doesn't change the fact...

          That it's still a useless article. Why did ZDNet bother reposting it? Except that they're both owned by CBS Interactive and it's a slow news day?
          UncleBubba
          • Zinger

            Ouch...but true. I didn't know CBS owned BOTH...in that case I want to retract my retraction.

            ha ha Take care and thanks all, Jack.
            Jack516
        • Well then fire the guy who repost this story

          Silicon.com should fire this guy, and then ZDNet should remove its lips from Steve Jobs junk and fire the guy who decided to repost this story.
          Unix Pimp
    • @iTeaBoy

      Yes, there was a point to this article. It was nothing more than to score hits on this website. The more hits, the more they can charge for ads.
      Axsimulate
  • RE: Whose Stools are Firmer?

    How many of these stupid articles do we have to endure?

    Almost as inane as doing a piece on whose stools are firmer--Steve Jobs or the CEO of RIM.

    God, could you just find something interesting to write about instead of this masturbatory hand-wringing about phones all the time? Who cares and what, really, is the point anyway.
    Jack516
  • The StarTrek Question

    I hear the reporter of this piece is writing his next article entitled: "Was Kirk or Piccard the Better Starship Captain?"
    Jack516
    • I think he already did.....

      People have way too much time on their hands....

      http://blogs.coventrytelegraph.net/thegeekfiles/2009/05/kirk-voted-as-no1-star-trek-ca.html
      UncleBubba
      • And anbody who watches ST would know...

        ... that Kirk was NOT the original captain of the Enterprise, as stated in the article. Captain Pike was.

        *stands down from nerd soapbox*
        WarhavenSC
  • Can't they both be on top?

    To me, it's a Haagen Daz vs Ben & Jerrys. Both are at the top of the
    super-premium ladder, and both can make boatloads of cash while
    keeping other brands out of their space.
    Gritztastic
  • I second that notion

    "lawl" (lol) at the notion.

    -M
    betelgeuse68
  • I love a good murder mystery

    Too bad there's not one here... LOL
    ThePrairiePrankster
  • RE: Will BlackBerry kill the iPhone?

    Blackberry remains most popular in business use because
    of an excellent keyboard and form factor and a limited
    demand (so far) for add-on apps.

    The iPhone touch keyboard simply isn't as fast for users
    who are acclimated to the Blackberry.

    Should Apple offer new services or even a new device, they
    might make inroads into corporate. Will the Blackberry kill
    consumer iPhone business. Unlikely. I look forward to see
    the BB numbers when one is not being given away free and
    comparing that to the much more user oriented iPhone.
    DocChevalier