Iphone ousts ’Berry as Apple of Canadians’ eyes

TORONTO – Canada’s love affair with the Blackberry is waning.

Research In Motion Ltd. has been ousted from the top spot for smartphone shipments in its home market for the first time, trailing Apple Inc.’s iphone.

RIM, based in Waterloo, Ont., shipped 2.08 million Blackberrys last year in Canada, compared with 2.85 million units for Apple, data compiled by IDC and Bloomberg show. In 2010, the Blackberry topped the iphone by 500,000, and in 2008, the year after the iphone’s debut, RIM outsold Apple by almost five to one.

Blackberry, one of the biggest consumer brands to emerge from Canada, had enjoyed more loyalty among locals who embraced its made-in-canada roots.

Blackberry’s loss of domestic pre-eminence shows the iphone’s user-friendly features and wealth of apps trump other considerations, said Paul Taylor, a fund manager at BMO Harris Private Banking in Toronto.

“For RIM, in its home market, to lose that No. 1 position to iphone is strategically important,” said Taylor, who manages about $15 billion in assets, including RIM and Apple shares.

“It does identify, even with a home-country bias, how consumers are responding to the greater functionality of the iphone.”

To halt a sales slump that’s spreading north from the U.S., Thorsten Heins, RIM’S new chief executive officer, has vowed to do something “dramatically different.”

The Blackberry 7 phones introduced last year have better Web browsers and touchscreen navigation than older models, and the Blackberry 10 devices – due out this year – will represent further improvement, Heins said.

Sales in Canada, which account for about seven per cent of RIM’S revenue, fell 23 per cent in the fiscal third quarter from a year earlier as U.S. sales tumbled 45 per cent.

That dragged down worldwide revenue by 5.9 per cent, offsetting rising emergingmarket sales.

While RIM was once a hotbed of innovation, it didn’t invest enough in promoting its devices once the iphone arrived, said Alfred Dupuy of Interbrand, a research firm.

“They got so good at innovation they just expected the product to sell itself,” said Dupuy, head of the firm’s Toronto office.

“From a brand perspective, they just lost their way.”

Blackberry slipped two spots to 54th in Interbrand’s October 2011 ranking of the world’s Top 100 brands, as Apple climbed nine spots to eighth.

“The challenge for Mr. Heins is to take that iconic brand and products that are reasonably competitive and ensure that they do get appropriate attention from the average consumer,” BMO Harris’s Taylor said.

“That’s the challenge: to reverse the negative sentiment that has developed.”

Market-share losses, a series of marketing missteps and product delays sent the stock down 75 per cent last year and is down about 90 per cent from its mid-2008 record. That hasn’t stopped investors from betting on further declines.

Short interest in RIM reached an eight-year high this month.

RIM will probably say fourth-quarter profit fell by more than half to 82 cents a share when it reports results March 29, according to a Bloomberg survey of analysts. Sales probably dropped 18 per cent to $4.53 billion, analysts predict.

RIM said, in December, sales would be $4.6 billion to $4.9 billion.

By contrast, Apple’s fourthquarter profit more than doubled to $13.1 billion – almost triple RIM’S sales – as revenue surged 73 per cent to $46.3 billion.

RIM declined 1.43 per cent to $13.75 in Toronto and Apple fell 0.52 per cent to $599.34 on Nasdaq. Apple has gained 49 per cent this year and soared almost six-fold since 2009.

Heidi Davidson, a spokes- person for RIM, declined to comment, citing a quiet period ahead of earnings.

Blackberry still has an edge over the iphone in some emerging markets.

In the Middle East and Africa, RIM shipped 8.3 million handsets to Apple’s 2.5 million iphones last year.

In Saudi Arabia, teenagers have embraced RIM because they can flirt using its free Blackberry Messenger instant messaging, avoiding local religious police who restrict interaction between unmarried men and women.

In Latin America, RIM outsells Apple by an even larger margin, with 10.6 million Blackberrys shipped versus 2.1 million iphones in 2011, according to IDC.

Vene zuelan President Hugo Chavez has dubbed his Blackberry and Twitter account his “secret weapon.”