BlackBerry Is Being Beaten at Its Own Game -- by the iPhone

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Research In Motion's (NAS: RIMM) BlackBerry is in danger of becoming that oddity in the handset market of being beaten by another, albeit much larger and more successful oddity: Apple's (NAS: AAPL) iPhone.

I call them oddities, perhaps unfairly, because both these manufacturers continue to stick with operating systems of their own invention. The computer industry moved away from this practice (or was it dragged kicking and screaming into the Unix world?), and the smartphone world is slowly following a similar trend, again kicked along by the enormous boot of Google's Android platform (Research firm Gartner said last week that Android powered 52.5 percent of all smartphone sales worldwide in the third quarter).

But for BlackBerry, the situation seems somewhat worse.

Putting to one side the outage with its email and messaging service last month, the company is now failing to compete against the iPhone with business users.

A recent study conducted by Wi-Fi connectivity firm iPass of more than 2,300 enterprise employees around the world found that the iPhone is now used by 45 percent of smartphone owners, compared to 32.2 per cent for BlackBerry. Android-based smartphones managed 21.3 percent, with Microsoft's Windows Mobile just gaining 5.5 percent of business users.

Commenting on the shift towards iPhones, iPass said that BlackBerry "has not really fallen from the top spot in so much as other smartphones have grown faster."

More worrying is that the iPass study found that the iPhone led 2012 purchasing plans with 18 percent of respondents planning to buy the Apple device, but only 2.3 percent a BlackBerry. Perhaps this has unsettled the financial analyst firms which now disagree over the company's prospects.

Brigantine Advisors has joined several other investment banks that recently upgraded their outlook on RIM while others, including Canaccord Genuity, have lowered their expectations for the company's share price.

The overall picture is not helped by the dismal sales figures for RIM's PlayBook tablet. Canaccord analyst Michael Walkley said that he had dropped his fiscal 2012 estimate for unit sales of the PlayBook to 900,000 from 1.5 million units. He noted that, in total, RIM had only sold 700,000 units to its retail partners through the August quarter, an extremely disappointing number.

What also seems apparent within RIM's culture is that "it knows best," regardless on what's going on elsewhere in the market.

RIM has not been alone in this blinkered approach. Nokia's arrogance (in that peculiar Finnish way) was similar and served the company well until it failed to comprehend the wave of industry change speeding towards it.  

This article originally published here. Get your wireless industry briefing here.

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