RIM: a numbers game

RIM, to me, has numbers working against it. 

Start with the product: on first impressions, BB10 promises to be good enough to keep corporate users, but it is not really competitive (in my opinion) with the iPhone or Android for consumers both on features and price, and it is a non-starter (and this is not a matter of opinion) in developing markets or for the 'teenaged girl' market purely on price. 

So, if we assume for the sake of argument that it can now retain most renewing corporate (and, in general, high-end) users and also convert some back, how many people is that?

35% of revenue in the last quarter came from Canada, the USA, and the UK: the rest was in emerging markets. That probably works out at less than 35% of handset sales, since it will mainly be at higher than the company's average ASP, though a significant portion of even that 35% was also to low-end users - in the UK, teenaged girls and C2DE consumers. 

Hence, if we look back over the last 24 months, it looks as though RIM sold maybe 20-25m phones in these markets (out of 85m total, or 25-30%), weighted towards the beginning of that period. Maybe 5-6m were in the quarter 2 years ago - i.e. the people now coming up for renewal. 

What share was high-end? Say 2/3, for the sale of argument. That gives 4m potential BB10 sales from renewals in the next quarter - PLUS of course whatever they can tempt back from people who deserted BB for iPhone two years ago - presuming they haven't just upgraded to an iPhone 5. Will people come back? We'll see. The ASP will be an obvious give-away. 

Where does all this get us? These are VERY rough numbers, and all could be wrong by 50% or so. But putting the most optimistic spin on things, RIM's 'loyal corporate base' isn't going to deliver sales of much more than, say, 20m BB10 units in 2013 (Nokia sold 13.5m Lumias in the last 12m)

Now, suppose that's totally wrong. Say RIM sells 30m units in 2013. 

That would add up to an install base of 30m (obviously), compared to an iPhone base today of over 200m and an Android base of well over 500m. 

If you're a developer, where do you put your efforts? Assume for the moment that these lovely corporate users are actually allowed to install apps (many currently aren't). Do you write a native app for BB10? Do you update it every few weeks with new stuff, the way you do for iOS or Android? Do you take RIM's money and put it out to see what happens? Do you stick your Android app in store to see how it performs (in both senses of the word)? Or do you just wait and see? 

For consideration: how much does it matter to RIM if no-one codes native apps? How far can it get slip streaming Android? And, of course, how much does RIM really need? Is this just the last pump before an acquisition? RIM is certainly in play (as are Nokia, HTC, LG Mobile, Sony Mobile and arguably in some sense Motorola) and this certainly doesn't worsen the story to a buyer.