On December 3rd Research In Motion, the company behind the Blackberry, came out drastically cut sales and profit forecast for the fiscal third quarter.  Regardless of the huge Blackberry Storm release the company was not expecting to hit their number.  

Yesterday, December 18th the very same company came out stated they expect revenue in the fourth quarter will be between $3.3 billion to $3.5 billion, with earnings per share of 83 to 91 cents. Isn’t it odd that the company switched their tune in a matter of weeks?   How did they do it?

“In order to drive sales RIM has had to lower prices, but the sales growth is phenomenal in this market,” Canaccord Adams analyst Peter Misek said of the results. “In the midst of a severe consumer recession, this is incredible.” 

The growth is very impressive, no doubt, but the company is cutting product prices in order to gain market share.  I wonder just how much they had to cut sales in order to make such an impact? This is a very, very dangerous game in this economic climate- just ask Motorola.

A Google alert came through yesterday with this little gem – a $99 3G iPhone may be coming to Walmart.  I followed the link to Gizmodo, but the story was removed from the site. Interesting, no?  After another search I was able to find the same info over at hothardware.com. 

Both Apple and Walmart had nothing to say on the rumor, but, if true, finding shelf space within Walmart will provide the iPhone with a whole new market – a market that may have never thought about stepping foot into an Apple store (and possibly a market that couldn’t afford to step into the store, either).

Assume for a moment the iPhone does hit Walmart – RIM and Blackberry will have an even bigger market share problem on their hands. In less than a year and a half, Apple has managed take over 30% of the Smartphone market share within the United States, roughly 10% behind RIM, and Apple does not even compete in the business space, where RIM has the majority of their customers.

The Blackberry Storm release was more sound and furry than actual substance, and as a result, RIM has already cut sales forecasts.  If Apple does manage to put the iPhone in Walmart, RIM will have an even bigger fight on their hands.

This is exactly what is wrong with the Patent system in the United States. Apple is being sued by a company called EMG Technology for the manner in which the iPhone formats and zooms in on content when a user browses a website using the device.

To start, mobile devices have reformatted data for almost a decade now. In a previous life a company I worked for deconstructed data and made the content presentable for mobile devices during that time period. As TechCruch points out, that in and of itself – the existing technology – should seem to invalidate the patent just issued.

I had a big problem with the RIM / NTP lawsuit in which a patent holder was awarded $612.5M dollars all because the blackberry devices had a “scroll” wheel on the side. To me, and I understand I know nothing, but that seems like a poor use of common sense on the side of the law.

Major patent reform is needed to prevent common sense from being a liability and to cut down on individuals (and companies) who’s main point of existence is to have a patent library they hope to use as a form of business terrorism.

I read two stories yesterday about “long lines” at Verizon stores for the Launch of the Blackberry Storm. The devices supposedly sold out within a few moments of the stores opening and police needed to come to one Manhattan location because people became so agitated when supply ran short. As Gizmodo points out, there were lines but nothing like Apple. 

Before you call me a fool for saying that “RIM doesn’t get it with the Blackberry Storm” let me point out something.

From all that I’ve been able to determine Verizon stores were allocated roughly 200 Storms for the product launch. Compare that to Apple’s roughly 2300 per store and one can easily see that the Storm isn’t even in the same league – yet. It has the potential, but RIM needs to change their approach.

Until RIM expands their focus from a business user base to a business / consumer user base and opens up the platform for independent developers they will be hard pressed to overtake the iPhone.

Apple has a hit with the iPhone (both the Edge and 3G version) and since the touch screen, music playing, game capable device came onto the market competitors are trying to match Apple’s efforts.

Enter RIM’s Blackberry Storm.

Everyone knows Blackberry to be the De facto accessory for business and IT workers worldwide, even after the release of the iPhone.  People are constantly check emails in meeting, working from remote locations, and, yes, playing brick breaker.  While the iPhone is the largest selling smart phone on the market, Blackberry trying to fight back with the Storm.

The new Blackberry device has a few advantages the iPhone does not have, including:

• Removable battery
• Expandable memory
• Tactile feedback
• Copy and paste
• Verizon 3G (AT&T’s network is a liability for the iPhone)

Who knows, the Blackberry Storm may be a superior device but it is unlikely to take over the iPhone in terms of popularity.  Why?  Easy – the cult of Apple.

Apple is popular for making sexy devices, be it iPhones, iPods or computers, and they know how to market their products to the consumer.  As a result, a growing (and vocal) group of dedicated users buy and promote Apple’s products.  It’s almost like a self-fulfilling circle of home grown marketing.

While sales of the Storm may be significant in the business world, RIM is not known as a retail consumer company and they do not have a fanatic retail consumer user base to support them.  Add on other limitations, such as a lack of integration with an established music retailer and no independent application developers for their platform, the Blackberry Storm will have a number of disadvantages right at the start.

I’m sure RIM understand the challenges they face, so I wouldn’t be surprised to see the Storm open up from an app dev standpoint, but I just do not see the company becoming a retail consumer company with this strategy.