BlackBerry crumbles in Canada — RIM losing home market to Apple

research-in-motionExecutives at Canada-based Research In Motion will feel at best disheartened and at worst downright depressed to learn that consumers in its home country appear to be turning their back on its BlackBerry devices in favor of another handset from south of the border. The hometown loyalty appears to be crumbling.

According to data from IDC and Bloomberg, Apple sold 2.85 million iPhones in Canada in 2011, while Ontario-based RIM sold 2.08 million of its BlackBerry devices. This is the first time that sales of the Cupertino company’s smartphone have exceeded those of RIM.

In 2008 — the first full year that the iPhone was available — RIM trounced Apple, with its devices outselling the iPhone by more than five times with its own range of BlackBerry offerings. By 2010, however, with the iPhone 4 creating a stir among consumers, Apple was close to turning things around, selling just half a million fewer handsets than RIM to Canadian consumers.

“BlackBerry, one of the biggest consumer brands to emerge from Canada, had enjoyed more loyalty among locals who embraced its made-in-Canada roots,” Bloomberg’s report said.

Paul Taylor, a fund manager at BMO Harris Private Banking in Toronto, attributed the turnaround to the iPhone’s ease of use and the huge number of available apps.

“For RIM, in its home market, to lose that No. 1 position to iPhone is strategically important,” Taylor told Bloomberg. “It does identify, even with a home-country bias, how consumers are responding to the greater functionality of the iPhone.”

Dismal 2011

But ease of use and apps aside, sales of RIM phones also haven’t been helped by the company having had nothing short of a disastrous 2011, with service outages, product launch delays, and a poorly received tablet tarnishing the company’s once stellar reputation.

Things became so serious that in January Mike Lazaridis and Jim Balsillie stepped down from running the show, installing the company’s former chief operating officer, Thorsten Heins, as CEO. 

While RIM is at least doing OK in emerging markets, sales of its devices in North America have been falling. Alfred DuPuy of research firm Interbrand told Bloomberg that RIM failed to effectively promote its devices when the iPhone first hit the market.

“They got so good at innovation they just expected the product to sell itself,” DuPuy said. “From a brand perspective, they just lost their way.”

Paul Taylor says for RIM to catch the attention of consumers again, it has to work hard on its image.

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

The company really hit the bottom of the pit in 2011, and when you’re that far down there’s only one way to go. Heins will be hoping for a better 2012, though whether he has the skill and ingenuity to deal with that negative sentiment remains to be seen.