Things just keep getting worse for Research In Motion (NASDAQ:RIMM), and there are no glimmers of hope to suggest a coming reversal in the company's declining fortunes. The month of June started off with digital research firm comScore reporting that Apple's (NASDAQ:AAPL) iOS leapfrogged RIM's BlackBerry to become the second largest U.S. smartphone operating system--as of April 2011, BlackBerry now makes up 25.7 percent of the American market, plummeting 4.7 percent in only three months' time. Last week, RIM reported first-quarter net income of $695 million, down from $769 million in the year-ago period; co-CEO Mike Lazardis explained the manufacturer has struggled to bring new BlackBerry OS 7 devices to market, adding the smartphones have stalled in carrier testing. And speaking of carrier testing, O2 UK said it will not be selling RIM's new PlayBook tablet, blaming concerns over "the end-to-end customer experience."
Given all the major headaches facing RIM, the news that Twitter client developer Seesmic will halt support for its BlackBerry app might seem like a comparatively minor nuisance. "Effective June 30th, Seesmic will discontinue support for BlackBerry in order to focus development efforts on our most popular mobile platforms: Android, iOS and Windows Phone 7," Seesmic announced Monday in a brief message posted to its blog. Seesmic doesn't explain the thinking behind its decision to abandon BlackBerry, but generally speaking, developers don't simply give up on an app unless they've come to conclude that improving and expanding it no longer makes good business sense. Seesmic is just one developer, and its decision could be an isolated incident--however, Business Insider reports that other BlackBerry developers have privately indicated plans to jump ship as well. In other words, Seesmic may be the first established BlackBerry partner to cut ties, but it almost certainly won't be the last.
There are few if any compelling reasons for developers to weather the storm. As RIM continues to migrate its platform from BlackBerry OS 7 to QNX, the operating system powering the PlayBook, developers are essentially in limbo: BlackBerry 7 is a lame-duck OS, and the first QNX smartphones won't begin shipping until sometime in 2012. Sanford Bernstein analyst Pierre Ferragu argues QNX will arrive too late to pull RIM out of its death spiral. "In today's ecosystem war, first mover advantage is key, and with a first phone hitting the market in 2012 only, QNX is unlikely to gain critical mass soon enough to be a viable alternative," he said. "In a best scenario, from the first phone shipped, we would expect RIM to require an iteration or two get to a competitive phone and a year or two before gathering enough developer traction around its ecosystem. By then, we expect Apple, Samsung and HTC to control over 80 percent of the market. The very slow start of Windows 7 is the best sign that the window of opportunity for an additional ecosystem to ramp up is closing fast."
Ferragu's grim outlook corresponds with a recent IDC forecast that anticipates BlackBerry will fall even further behind its rivals in the years ahead. IDC projects Google's (NASDAQ:GOOG) Android mobile operating system will grow to control more than 40 percent of the global smartphone market by the end of 2011 and reach 43.8 percent market share by 2015; Microsoft's (NASDAQ:MSFT) Windows Phone, which is replacing Symbian as Nokia's (NYSE:NOK) primary smartphone OS, will command just 3.8 percent of the market as 2011 but will rise to 20.3 percent by 2015. Apple's iOS will represent 18.2 percent of the worldwide smartphone market as 2011 ends, and IDC projects it will make up 16.9 percent by 2015. As for BlackBerry, look for RIM to make up 14.2 percent of the market in 2011... and 13.4 percent in 2015.
Perhaps most telling, developer confidence in BlackBerry's future is virtually non-existent. During Apple's recent Worldwide Developers Conference 2011, investment bank and institutional securities firm Piper Jaffray polled the iOS developers in attendance to gauge their interest in other platforms: While 36 percent of respondents currently work exclusively on iOS, 47 percent also write for Android, 36 percent write for BlackBerry and 13 percent write for Windows Phone. Even so, a full 100 percent of respondents cited iOS as the superior platform in terms of ease of development and monetization options, and 51 percent believe iOS is the platform with the greatest potential for future growth. Android is next at 40 percent, trailed by Windows Phone at 9 percent. Not one of the respondents expressed confidence in BlackBerry's future prospects. BlackBerry isn't yet out of sight, but for many developers, it's out of mind. -Jason