It’s time for the humble pie. When I previewed 2010 smartphone market in my Year of the Bloodbath piece from January, I analyzed every major phone brand with my best insights as to who would do well and who’d do poorly throughout the year. 

The one smartphone maker that I singled out as a vendor that I thought would admittedly gain market share in 2010 was Research In Motion (RIM) and its ubiquitous Blackberry lineup.

I was very sure of that forecast – until RIM last week reported the results for their fiscal 2010 third quarter ended November 27. Since we now have pretty solid information of RIM’s annual performance, it’s clear I had been wrong in my forecast so please accept my sincere apologies. But first, the results.

RIM reported a solid growth of 14 percent from the previous quarter and a 40 percent growth from this point a year ago. These would be astonishing figures for any company in any industry for a single quarter or year if it weren’t for the fact that smartphones grew an estimated 25 percent in just this past quarter alone and about 74 percent annually. Obviously, if you grow slower than the industry average, you are bound to lose market share. 

Meanwhile, the Californian gadget maker bragged about passing RIM on the basis of selling 14.1 million iPhones in its fiscal 2010 third quarter - their strongest quarterly iPhone sales to date. As the two companies’ quarters do not overlap completely – Apple’s current quarter ends in late December while RIM’s ended November 27 – what we now have is basically RIM’s "next" quarter.

Put simply, RIM with 14.2 million handsets sold edged past Apple which reported 14.2 million iPhone units – just a hundred thousand units difference. It’s almost certain Apple will beat its Q3 iPhone shipments during the holiday season. For example, last year Apple grew 17 percent from Q3 to Q4 in unit sales. I wonder if Steve Jobs will mention in the Q4 earnings report that they once more zoomed past RIM. If you ask me, we’ll probably see Apple and RIM in a neck-to-neck fight in 2011.

For those interested, RIM is a very profitable company. Their customers are increasingly from abroad and the majority of their sales now come from the consumer market – mostly youth addicted to messaging – rather than from their traditional enterprise and corporate customers.

For the record, I had projected RIM to end 2010 with market share in the range from 22 percent to 25 percent. Instead, they’ll likely drop to approximately 16 percent for the full year. Ouch! That’s a significant forecasting error no matter how you look at it. Ironically, projections by most of the other big shot analysts seem to be pretty much in line with my own 2010 forecast.

In my defense, I honestly trusted the facts that led me to conclude that RIM would have performed much better than it did. They were still growing at the time at an annual rate of 40 percent.

In addition, RIM has traditionally been one of the most profitable phone vendors in the business. It’s known for its strong sales performances. However, that was true for RIM in the past, but not this year, not in the Year of the Bloodbath.

Which brings me to a magic mumber for those watching Apple: 17.2 million iPhones in the fourth quarter. If Apple hits this estimate, they will have sold enough iPhones in 2010 to overtake RIM for the full year and become the second biggest smartphone maker in the world in terms of full year sales.

If Apple doesn’t hit that number, they’ll stay at the third spot. Oh, and those who want to consider the Scobleizer’s claims that Nokia is "doomed" – Nokia is already guaranteed to outsell both Apple and RIM combined for this year. So yeah, I wouldn’t be getting the shovels for grave-digging just yet.

Guys, my bad. I’m sorry, I really did believe my earlier forecast. With any forecast from any of us in the professional crystal-gazing industry, we unfortunately get many of them wrong – that’s simply the nature of forecasting. The point is to try to more often be accurate than hit the mark and to be less inaccurate than rivals. With that off my chest, it’ll be interesting seeing how the smartphone numbers pan out for the full year of the bloodbath.

My January 8 forecast for the 2010 smartphone market included the following market share estimates for key smartphone vendors:

  1. Nokia 35% – 40%
  2. RIM 22% – 25%
  3. Apple 15% – 18%
  4. Samsung 8% – 12%
  5. HTC 5% – 7%.

We will be able to revisit those estimates when major smartphone vendors release their full 2010 sales numbers. We will know HTC’s 2010 numbers when they report their quarterly earnings later this month. Other vendors will report their holiday quarters during January of next year. And for those wondering about Apple’s peak forecast, that we probably won’t know until early February 2011. On a more amusing note, Apple fans hoping that the sky is the limit could do well hoping for a great iPhone quarter and a modest industry growth in the holiday quarter.