Telecom & Wireless

The Google (GOOG) Phone And The Beginning Of The End For RIM

RIM’s (NASDAQ:RIMM) stock has recovered some after several weeks of selling off due to the strength of the sales of the rival Apple (NASDAQ:AAPL) iPhone. In the meantime, RIM has put together a contract with China Telecom to sell the Blackberry to consumers in the world’s largest cellular market. RIM reports earnings in a weak and analysts hope they will best expectations.

The primary reason RIM’s shares are doing better is the case that it has made that it will hold its market share in the enterprise handset business against any significant incursions from Apple.

RIM’s condition may have changed for the worse. Experts already believe that some of the new smartphones powered by the popular Google (NASDAQ:GOOG) handset operating system, Android, could cut into Blackberry sales. Now it seems that Google will launch its own handset, probably built by Chinese manufacturer HTC, early in 2010. Google has the resources to bring in additional developers to add functions to Android that would appeal to business users. The Google phone will also not require a subscription to any particular cellular service. Customers can pick the new Google phone and combine it with the cellular provider that they prefer.

RIM has the enterprise smartphone business to itself for several years. As new smartphones have come into the market targeting business users, RIM has launched handsets for consumers to hedge its bets. That hedging is not likely to work. Google and Apple are too formidable as competitors for RIM to hold it own in the sectors of the smartphone industry that it has dominated.

Douglas A. McIntyre