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As iPhone passes BlackBerry market share, RIM prepares to counterpunch

While Apple's iPhone takes second place in the struggle for smartphone dominance, RIM hopes its expanded line of BlackBerrys can help it overtake the surging newcomer.

Just a year and a half after its release, the iPhone has surpassed BlackBerry and taken second place in global smartphone market share.

According to a study published by Canalys, Apple's iPhone took 17.3% of the smartphone market in Q3 2008.

"It was expected that Apple would figure among the smartphone leaders this quarter, with that huge initial new product shipment. It was just a question of how high up it would be – and this is impressive," said Pete Cunningham, Canalys senior analyst, in a statement.

BlackBerry maker Research In Motion (RIM) actually saw its own market share grow at a healthy pace, to 15.2% in Q3 2008 from 10.6% in Q3 2007. Canalys' research suggested that RIM and Apple are growing at the expense of Nokia, which saw its market share slip from 51.4% of smartphone sales in Q3 2007 to 38.9% in the last quarter.

Despite the iPhone's impressive adoption, some analysts think the BlackBerry brand will have real staying power, particularly as RIM's latest line of phones – including the souped-up multimedia-ready Bold and the company's first touch-screen phone, the Storm – come to market.

"Is there pressure in enterprises to buy iPhones?" said Jack Gold, founder of J. Gold Associates. "Yes, because they're cool and people want them, but there's a lot of pushback from IT."

IT is pushing back because the iPhone still can't compete with RIM's security and remote administration functionality, Gold said.

With BlackBerry Enterprise Server, IT administrators can enforce hundreds of policies on the phone, from disabling multimedia features like the camera and music layer to restricting which websites users can visit, he said. Apple offers nothing comparable for the iPhone.

RIM's added attention to consumer appeal might also help market share to continue growing. The company recently introduced its first flip phone, and buzz has been building about the two high-profile carrier-exclusive launches coming before Christmas.

The Bold, coming shortly from AT&T, sports improved Web browsing and a screen far advanced over its predecessors, while still keeping BlackBerry's traditional long battery life, including five hours of talk time.

The Storm, launching with Verizon, may be the bigger gamble: It will be RIM's first touch-screen device, with a large screen similar to the iPhone's and the traditional suite of BlackBerry enterprise apps, in a bid to broker peace between users' demands and IT's security concerns.

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