It used to be the case in the enterprise market that companies were buying high-priced smartphones for their employees. Not so much any more.

Now thanks to consumer-friendly devices such as Research In Motion's BlackBerry Pearl, business users are increasingly likely to buy the handsets for themselves for business and personal needs.

"Smartphone devices are not just being purchased by enterprise users," said ABI Research industry analyst Shailendra Pandey from London. "If they have good cameras and music features they are being picked up increasingly by general consumers."

Thanks to this trend, RIM is likely to end 2007 with a 10 percent share of the smartphone market, making it the second-largest smartphone vendor this year after Nokia, according to ABI. The BlackBerry Pearl release this year played a major role, helping draw new consumers to the smartphone market.

RIM, Waterloo, Ontario, Canada, currently has partnerships with more than 300 hundred wireless carriers outside North America.

ABI expects RIM to continue performing strongly in the smartphone market in 2008. But the BlackBerry Pearl is just a starting point. RIM will have to seek ways to include even better features, improved design and a clearer user interface in its devices.

To reach business users who are buying devices for themselves for business and personal needs -- a segment Mr. Pandey refers to as "prosumers" -- RIM will also have to consider taking a cue from the Apple iPhone and implement one of the most popular trends of 2007: a touch screen.

"A year ago RIM didn't offer camera or music features," Mr. Pandey said. "Now they are doing that and as such making the devices more attractive for the consumer market. Next year you can expect to see a lot more smartphones coming out with touch screens."

Email clicks with users
RIM's share in the smartphone market has steadily increased in the last five quarters, from 7.2 percent in the third quarter of 2006 to 9.5 percent in the same quarter this year.

In the first quarter of this year the BlackBerry Pearl contributed more than 50 percent of RIM's total handset sales. The company's total shipments have grown more than 100 percent in the last year.

"The reason why BlackBerry devices are preferred by enterprise users is their email functionality," Mr. Pandey said. "They are probably the smartphone vendor that offers the best functionality insofar as accessing email."

The growing popularity of RIM's devices indicate that consumers and carriers are willing to support higher-priced handsets if the feature set is right and the device is executed well, Mr. Pandey said.

RIM's focus on the enterprise market and its email feature helped it become one of the most popular vendors in the smartphone market. This also enables the company to maintain higher and more stable actual selling prices for its devices.

ABI estimates $345 as the actual selling price of RIM handsets in 2007, which is substantially higher than the overall industry average of $248 for smartphones.

Make in China
However, RIM still faces challenges. Nokia remains the leader by far with more than 50 percent of the smartphone market. Motorola takes third place with a market share of roughly 9 percent.

Also, RIM's business is predominantly in North America. The Canadian company now needs to address the growing demand for smartphones in the emerging markets of Asia-Pacific and other regions.

Mr. Pandey said that in addition to operator partnerships, RIM needs to grow its research and development and manufacturing capabilities to increase its presence in the Asia-Pacific region. Having a presence in India or China can help RIM ship more devices and reduce overall costs, he said.

"They do recognize their strengths and limitations," Mr. Pandey said of RIM. "They have limited manufacturing facilities and cannot afford to spend as much on marketing and promotions. They sell mostly via partnerships."