The smartphone market has experienced the surge and the decline of several leading companies in the past few years. It is a very competitive market which demands constant innovation and is sensitive to customer’s satisfaction. It is essential to look at how a company is growing. In fact, I just read a good article that describes what to look for when analyzing these kind of businesses. The rise and fall of Research In Motion Ltd (NASDAQ:BBRY), formerly Research In Motion , is a clear example of this: the company had 14.3% of the smartphone market share in the fourth quarter of 2010, then its share declined to 8.2% in the fourth quarter of 2011 to be nowadays driven off the ranking chart.
Will the smaller mobile phone vendors survive?
Research In Motion Ltd (NASDAQ:BBRY) is having a hard time trying to get back to its roots of being one of the leading smartphone manufacturers worldwide. The company hired JPMorgan and RBC to help it review its financial situation and analyze its business model back in 2012, but Research In Motion Ltd (NASDAQ:BBRY) seems to have lost its compass.
The company’s stock price plunged more than 23% from June 24 to present date on its poor last quarter results. Although the firm posted a 9% increase in revenue at $3.1 billion for the first quarter of 2014 compared to the same quarter in 2013, it had a loss from continuing operations of $84 million. Moreover, revenue from the Latin American region dropped 6% which has rattled investors as that was the bulwark of BlackBerry’s growth in the last quarters.
The company launched new phones to fight for some of the lost pie in the smartphone market, the models Z10 and Q10, and it is trying to regain the lost terrain in the corporate technology segment with its Research In Motion Ltd (NASDAQ:BBRY) enterprise server. As more and more mobile devices are used by employees to manage workload in emails and messaging, there is an opportunity for Research In Motion Ltd (NASDAQ:BBRY) to gain a new revenue stream in the mobile device management sector.
The firm is a definite no for investors, as it will have to solve many issues to get back on the growth track after a series of failures including its PlayBook tablet.
Although Nokia Corporation (ADR) (NYSE:NOK)’s stock price is far from being around its historic high, it has improved more than 75% in the last year. The company ranks second in the mobile phone market after Samsung with 14.8% market share, but does not appear in the smartphone segment ranking. However, the company is facing some pressures regarding its poor performance in the last year. Nokia Corporation (ADR) (NYSE:NOK) posted a 22% decrease in net sales for 2012 compared to 2011 totaling €30.2 billion, and a 93% decline in operating profit that stood at €126 million for the same period of comparison. This was mainly given by a drop in almost all of its categories in its devices & services segment.
Nokia Corporation (ADR) (NYSE:NOK) has been trying to turn the wheel towards growth with Microsoft’s support. Nokia agreed to using Microsoft’s operating system for its mobile devices, but that has not given fruitful profits yet. Some analysts were expecting an imminent acquisition of Nokia Corporation (ADR) (NYSE:NOK) by Microsoft, but this is unclear as the Finnish firm is having trouble turning around its business. But investors should note that according to the Wall Street Journal, Nokia Corporation (ADR) (NYSE:NOK) is the biggest exclusive seller of Windows phones, accounting for 79% of total Windows devices which means the companies depend on each other fiercely. Investors should weigh this acquisition option in if they wish to acquire Nokia shares and risk to a continued meager performance.