RIM, Apple saved Canada

Without the popularity of Research In Motion Ltd.s’ BlackBerry and Apple Inc.s’ iPhone devices, Canada’s mobile handset market would have experienced disastrous results during the first half of 2009, according to IDC Canada Ltd.

While the ongoing recession has left Bell Canada, Rogers Communications Inc. and Telus Corp. with more inventory than they would like left on the shelves, all of the carriers have benefited from the odds-defying explosion in Canadian smart phones sales.

“It’s really been the silver lining of a relatively dark cloud,” said Kevin Restivo, a senior analyst covering mobility for IDC Canada.

About 4.2 million mobile handsets shipped in Canada during the first half of 2007, with 513,000 of those falling into the smart phone category, while the first six months of 2008 saw total handset sales of 4.5 million shipments, including 904,000 smart phones.

Restivo said the seven per cent jump in total market share from the first half of 2007 to the first half of 2008 took a serious nosedive after the economy went sour, leading to an 11 per cent decline over the same period in 2008 to 2009.

But while only 4 million units have shipped during the first six months of this year, more than 1.3 million of those handsets have been smart phone devices.

During this timeframe, the market has been led by RIM, with 64.9 per cent of first half 2009 shipments. Apple places second at 18.5 per cent, with Samsung Inc., Nokia Corp., and Palm Inc. rounding out the top five.

But, according to Restivo, RIM’s market share might have just reached its peak.

“Over the course of the next five years, RIM will lose market share,” he said, adding that Apple’s mobile OS will also start to experience setbacks.

Restivo indicated that RIM is projected to end the year with about 67 per cent of Canada’s smart phone market, but in 2013 that figure should drop to around 55 per cent. As for the iPhone, it is projected to end the year with about 15 per cent of the smart phone market, but only experience marginal growth to about 20.5 per cent in 2013.

The reason for the RIM’s decline and Apple’s slowed growth, Restivo said, is the result of the introduction of Palm’s WebOS, a bevy of upcoming Windows Mobile devices, the expected growth of Google Inc.’s Android platform, and a few surprises from new smart phone entrants.

The big gainers, according to IDC Canada, should be both Windows Mobile and Android-based devices, which are projected to each take about 10 per cent of the market by 2013.

But while smart phones represent a key driver for the future of mobile handsets, other IDC Canada analysts argue that Canada has a lot of room to grow in the mobility and telecom space in general.

Lawrence Surtees, IDC Canada’s vice-president in charge of communications research, said that even though Canada has 22 million subscribers, wireless services only have a 67 per cent penetration rate.

“Penetration doesn’t max out at 100 per cent,” said Surtees, pointing to countries such as Hong Kong and Italy, which both have over 150 per cent penetration for wireless services due to consumers subscribing to more than one wireless service.

“This is good for vendors and application developers that want to play in this space,” he added.