Defying an otherwise soft IT spending environment, Research
In Motion (RIMM) is continuing to blow away the competition
- expanding on its already vast share of the corporate
smart phone market.
While corporate IT spending is far less robust elsewhere,
after a long and unsettling decline there are signs the
spending slowdown may be stabilizing.
First, the good news from May survey of 2,049 respondents
involved with IT spending in their organization: It's all
about smart phones.
Research In Motion Destroys the Competition
In extraordinarily upbeat results for Research in Motion
(76%; up 3-pts), the Canadian BlackBerry maker is expanding
its already vast lead in the corporate smart phone market -
even as number two Palm (PALM; 17% - down 1-pt) continues
its long term decline.
Looking ahead at 3rd Quarter planned corporate purchases,
RIM has overwhelming momentum, with 82% of respondents
buying smart phones next quarter saying they'll purchase
BlackBerries - a 5-pt jump since the previous survey in
February.
"When you're hot, you're hot, and the latest results for
RIM are scorching," said Tobin Smith, founder of
ChangeWave. "If every product had such market dominance,
it would be easy to pick the winners in each space," added
Smith.
The Apple iPhone (AAPL; 13%) now ranks second in terms of
planned corporate purchases, up 2-pts from previously -
while Palm continues to languish with a miniscule 8% of
future purchases.
Meanwhile, despite RIM's upbeat results in the smart phone
market, overall corporate IT spending remains anemic and
there are very few signs of an uptick going forward -
pointing to continued economic weakness for the 2nd half of
the year.
IT Spending Soft But Stabilizing
After a long and unsettling decline, there are signs that
the corporate IT spending slowdown - while still soft - may
be stabilizing.
When asked if their overall IT spending was on track thus
far in the 2nd Quarter, 11% of respondents said their
company had spent "More than Planned" - up 1-pt since
February. Another 27% say they've spent "Less than
Planned" - unchanged from previously.
Thus, current IT spending remains at virtually the same
lowered level that it was in the previous quarter -
although it's a positive sign that things haven't gotten
any worse. Looking ahead to the 3rd Quarter, nearly
one-in-four respondents (24%) say their company's IT
spending will decrease (or there'll be no spending at all).
That's 1-pt worse than the previous survey.
In addition, only 15% say spending will increase -
unchanged from previously. The softness in projected
spending is occurring across companies of all sizes,
although once again things have stopped getting worse -
another sign that things have at least temporarily begun to
stabilize.
But the big question is - when are things actually going to
get better?
Bearish on the 2nd Half
We asked respondents about their IT spending outlook for
the entire second half of 2008 (July-December), and 28%
think their IT budget will be less than first half of 2008
- a whopping 8-pts worse than previously.
Only 18% think their company's IT budget will be greater
than it was in the first half of 2008. Another 44% say
their IT budgets will remain the same.
Thus, while the slowdown in corporate IT spending may be
finally stabilizing, these results point to continued
economic weakness for the 2nd half of the year.
At the very least, the findings provide little support for
the thesis that a V-shaped U.S. economic recovery will
occur in the 3rd Quarter. Rather, they strongly suggest
that businesses will continue to maintain a wait and see
mode regarding capital spending - possibly until the
November elections.
Research In Motion's success in the smart phone market,
however, remains one extraordinary bright spot in the IT
economy. The BlackBerry smart phone maker appears likely to
enjoy one of its best quarters ever.
----------------------------------------------------
ChangeWave tracks the hottest stocks and technologies
through a series of online surveys. To gain early access to
reports highlight the winning and losing companies, sign up
for free at: http://www.changewave.com/hotwire .
For additional information on ChangeWave, visit:
http://blog.changewave.com
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