Team
SROVAK
Olivia Nguyen
Rajen Janda
Komal Wadhwa
Andy Zhao
Jiyong Lee
Victor Xing
Blackberry's Rise in Brand Power
Introduction
Research in Motion (RIM) provides a variety of "products, services and embedded
technologies" which include the Blackberry. The Blackberry Storm Smartphone's major
competitor is Apple's iPhone. With both products offering similar features, however, the
Blackberry has had more appeal to consumers in the professional, executive, and industrial
market. RIM is now aiming to expand its current market share by taking Apple’s clientele.
Research in Motion (RIM) is a relatively young company that specializes in telecommunications.
Founded in 1984 by a band of Waterloo students, RIM has become one of the fastest growing
companies in the world and has since become the second largest holder of market shares in the
smartphone world. RIM provides a variety of "products, services and embedded technologies"
which include the Blackberry.
The Blackberry is an innovative product first introduced in 1998, which has been the primary
source of RIM’s tremendous success. Throughout its existence, the Blackberry line of products
has enjoyed many well-received upgrades which have added to its popularity. These changes
include the addition of handheld web browsing, a fully functional QWERTY keyboard, a Camera,
DivX video playback, mp3 capability etc. The latest evolution of the BlackBerry is called “the
BlackBerry Storm 2,” and includes all the above features along with dozens more.
Over the years, RIM has built up a reputation as a producer of reliable and professional
products. For example, when most people picture a BlackBerry phone, it is usually in an office
setting, in the hands of someone wearing a suit, or lying next to a briefcase. Because of this
reputation, RIM’s BlackBerry has been wildly popular among consumers in the professional,
executive, and industrial markets.
However, in recent years, a company much larger than RIM has been making a name for itself
in the smartphone market. Apple, which is probably best known in the western world for its
production of slick, features rich media players called iPods, has jumped into direct competition
with RIM. Apple had advanced its iPod line so far that its list of features almost matched that of
the BlackBerry, except for the ability to make phone calls. So, given that Apple is no less
innovative as a company than RIM, and that the only logical next step to take in the evolution
of the iPod was to add a phone, that is exactly what they did. The result was that the perfect
competitor against the BlackBerry, the “iPhone,” was born.
The sale of BlackBerries is now threatened by the Apple’s iPhone, and RIM’s market share is
beginning to suffer. RIM must now find ways to expand its market share and stay competitive in
the smartphone market if it wants to continue enjoying the rate of growth it has in years past.
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Problem
How can RIM maintain a strong presence in the market and avoid being overshadowed by
Apple in the battle of the brands?
Key Findings
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Blackberry, being the founder of Smartphone’s, has established itself as a strong global
brand, with “92 percent of its revenues coming from outside of Canada”
Blackberry has become an iconic and indispensable tool in the business world
Blackberry has an extremely large, loyal base of clientele, with over 14 million users in more
than 135 countries around the globe.
Apple has a large client base, having sold 88 million iPods, millions of online songs and a
large number of computers
Apple is therefore much better known to the new generations that are quickly replacing the
more mature workforce who have been using Blackberries
Assumptions
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The executives of RIM prefer that their company stays in a competitive position relative to
Apple, as opposed to yielding and accepting whatever loss in market shares that yielding
would incur.
Competition in the Smartphone market is dominated by a select few brand names, and can
therefore be considered to be oligopolistic.
RIM has the resources necessary in order to expand its current market.
Most of RIM’s core client base, the middle-aged professional/executive, still hold a
preference for the BlackBerry.
The market for BlackBerries is at a point close to its equilibrium, where there are enough
units produced to satisfy demand, but not so many that there is excess piling up.
Having attained a solid footing in the smartphone market, Apple will continue to advance
the iPhone product line.
Customers take into consideration the key features of phones such as appearance, battery
life, and social networking features when deciding which to buy.
The effect of the current depression on smartphone sales is uniform; no single smartphone
company is being affected more than the rest.
Consumers judge goods based on not only value, but also based on perceived value of
specific brands.
Most young consumers are unfamiliar with the RIM products, and are over-exposed to
Apple products.
SWOT Analysis
Strengths
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Customer loyalty. RIM has maintained a relationship with customers.
Blackberry is recognized around the world as the leading business PDA. A majority of
authoritative figures in companies use Blackberry.
Established line of products. The company has already gained recognition within the
market.
Research and development. RIM has shown in the past that it can come up with innovative
products.
Rapid company growth. RIM is listed as the fastest growing company, establishing itself
within Canada and around the world.
Unique Operating system. Smartphones have a multitude of features, so when users
become acquainted with the interface they are dissuaded from having to learn a new one,
like that of the iPhone.
Weaknesses
 Consumer market. Blackberry's appeal has come largely from the professional, executive,
and industrial markets. Blackberry needs to gain a larger share in other markets like the
consumer market.
 Reluctance to take risks. Prevents the company from expanding their "brands beyond [its]
borders".
 Right now the only advertisement for Blackberry is word of mouth, it is rarely, if ever,
advertised on television.
 All eggs in one basket. RIM is too dependent on the sale of telecommunications devices, it
lacks the diverse range products that back other companies in the business like Apple, Sony,
and LG to name a few.
 As an extension of previous point, RIM’s overall performance stands to take the hardest hit
in the unfortunate case that demand for smartphones suddenly fall.
Opportunities
 Penetrating consumer market. Now that the company's products allow customers to
connect to Facebook, watch live television, and listen to music, the company can gain a
better share of the consumer market.
 Product development. The company can increase budget and make more investments to
create new brands.
 International development. By building and venturing beyond its boundaries, the company
can capture the international market and become a global brand.
 Most young consumers are unfamiliar with the RIM products, and are already over-exposed
to Apple products such as iTunes and iPod. Some members of this crowd may be seeing
something new.
Threats
 Competitive market. The market is very competitive with brands such as Apple, Sony,
Microsoft, Palm, and LG.
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Black market. With the black market, the company's sales will drop as consumers can
purchase the product at a lower price.
Buys and sells in different currencies - could mean that the company is producing/selling at
a loss
Competitive Analysis
BlackBerry
Apple's iPhone has a higher satisfaction rating
than RIM's BlackBerry - by 20%. (See Exhibit
1.2)
RIM's overall sales are still higher than that of
the iPhone. (See Exhibit 1.3)
BlackBerry battery lasts longer than iPhone
giving it a huge advantage for not only
business men and women, but for students as
well (See Exhibit 1.4)
BlackBerry e-mailing is faster than iPhone
(iPhone uses Push and BlackBerry uses
BlackBerry Enterprise Server)
BlackBerry offers turn-by-turn driving
instructions from VZ Navigator application, a
feature that Apple iPhone does not currently
offer.
Blackberry Messenger provides instant chat
between BlackBerry users. It is similar to
texting but it does not charge customers. This
application allows customers to send
documents, pictures, voice notes, and have
conference conversations.
The BlackBerry can receive and edit MS Word
documents, Excel spreadsheets, PowerPoint
presentations.
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iPhone
RIM's market share has been relatively steady
in 2008. Apple's market share, however,
increased from 6% to 23% in 2008. (See
Exhibit 1.1)
Over the past year, Apple's sales have
increased by 4,542.2 compared to RIM's
2,084.7 (in thousands of units). (See Exhibit
1.3)
Cost advantage: BlackBerries range from $83 193 depending on service provider and
contract; iPhone ranges from $94 - 156. (See
Exhibit 1.5A and Exhibit 1.5B)
The iPhone features a responsive, flexible
touch screen instead of a keyboard. This
allows the iPhone to use a more diverse range
of applications. BlackBerry users are stuck
with a keyboard until the release of the
“Storm 2.”
iPhone is a fun-phone, offering access to social
networking venues such as facebook, and
boasting compatibility with a vast selection of
minigames and applications that serve no
other purpose than to entertain.
The iPhone’s design and previously mentioned
entertainment features are very alluring to the
vast and mostly untapped teen/young adult
consumers who are just starting to switch to
smartphones.
Though the iPhone’s low price makes it
attractive to younger consumers, the price of
its most basic service plan, at $93.17,
contradicts this.
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BlackBerries are designed to better
accommodate efficient individuals who
require productivity from their phone.
iPhones enjoy much face time with the
general public via commercials, posters, and eadds. RIM advertises the BlackBerry on much
more limited basis.
Target Market
RIM’s target market is best narrowed down to business professionals and young
adults/students aged 18-40. Because of its wonderful e-mail capabilities, business professionals
can remain “in-touch” more efficiently and more quickly. In terms of size for RIM’s target
market, it aims at 27.4% of Canadians. The lifestyle of these target consumers are that of busybodies who need and/or want readily available access to all kinds of information at any time.
People that want or need to be “connected.”
Recommendations
Alternative 1:
Market Penetration Strategy
The company will reduce its selling price in order to increase demand and sales
Advantages:
 Increase the demand for RIM's products.
 Attract new customers who may not have been able to afford it before
 By lowering its selling price, it prevents other competitor's from entering the market who
may not have the financial resources necessary to compete against RIM
 Apple has traditionally maintained relatively high prices on its product lines and may find it
risky to follow this strategy. Presents a risk of shattering the buyers’ perception of high
quality Apple brand.
Disadvantages:
 The demand for RIM's products must be elastic (a small decrease in price will cause a larger
increase in demand)
 RIM must keep their prices relatively low - may lose customers if they start to increase
prices later
 Current competitor's may lower their prices to match RIM's
 Executing this strategy might be very difficult for a product line as widespread as the
Blackberry. The demand curves of the 100+ countries that buy Blackberries may vary
greatly.
 BlackBerries are currently more expensive than iPhones. Any realistic drops in price, such as
between 10-40 dollars would have little positive impact on sales.
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Alternative 2:
Raise Perceived Quality
The company will attempt to protect itself from more resourceful competitors by establishing
itself as a luxury or white-collar brand.
To achieve this, RIM will need to make small design changes to both the BlackBerry’s
appearance and attitude of its advertising. A hint of chrome and a strip of leather incorporated
into the framework, or a business-like carrying case of some sort which comes standard with all
purchases will give the product line a bit of an elite-professional feel.
Actively advertising on television stations and websites that provide business-related news
feeds will also help push the new image, and help to spread the word of BlackBerries in general.
Advantages:
 RIM’s BlackBerry is already an indispensable asset in the arsenal of most executives and
business people. These current customers will be proud to see their BlackBerry raised to a
status which reflects their position in the workplace.
 Currently, RIM does very little advertising. Any advertising for the BlackBerry would have a
good chance of reaching out to individuals who may want a BlackBerry, but were simply
not exposed to it.
 Because the BlackBerry has been so scarcely advertised in the past, the changing of the
BlackBerry image to an even more business-like one will be relatively easy to achieve. For
example, if Apple tried to do the same with its iPhone, there would be much more time
and effort involved because the Apple brand has always been advertised with party music
and jumping teenagers.
 By distinguishing itself as a pure business brand, RIM can provide the sales of its BlackBerry
temporary refuge from the fast-growing iPhone, which is a far less business oriented
product. In this way, the BlackBerry’s client base will be more clearly defined and less likely
to defect.
 Opens up the opportunity for a future product line aimed specifically at the casual crowd.
Disadvantages:
 In order to change the brand image completely, the advertising campaign would probably
have to be quite extensive. This, in turn, would mean large sums of money (which could
otherwise have gone into research and development) would be expended.
 Because the BlackBerry has become somewhat of a hybrid aimed at both the serious
business market and the casual market, it has acquired some features suited for both. If
the BlackBerry is to become purely business-elite in nature, some features such as the mp3
player, video player and 3.2mega pixel camera will seem out of place. On the other hand,
removing these features may produce unwanted controversy.
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Alternative 3:
Diversifcation
Create a new product under the RIM brand name. By diversifying and boasting more than one
product line, RIM will become more financially secure and less vulnerable to sudden changes in
the market.
For example, if RIM becomes a successful portable DivX or personal GPS system manufacturer,
it would not suffer as greatly if for whatever reason, the demand for smartphones was to
suddenly drop. RIM has ample experience in both GPS systems and handheld video, because
the BlackBerry already incorporates both of these, so diversification would be very possible.
Advantages:
 Income flowing from products in more than one market will provide better financial security
to RIM in the future.
 The market for GPS systems is not too large yet, with only a few competitors. Perhaps RIM
can use its ingenuity and strike gold here like it did with smartphones two decades ago.
Disadvantages:
 Developing a new product line will consume large sums of company resources.
 Creating a new department to take charge of the new product will be costly not only in
terms on money, but also in terms of employees, because some talented individuals will
no doubt need to be transferred over to the new department to get things rolling.
 Risky. There is always the possibility that the new product will simply fail to sell in
sufficient numbers.
Appendix
Exhibit 1.1 Market Share
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Exhibit 1.2 Satisfaction
Rating
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Exhibit 1.3
Sales
Exhibit 1.4 Battery Life
Exhibit 1.5A
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Exhibit 1.5B
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Possible Sources
http://internet2go.net/news/Asia
http://www.internetnews.com/mobility/article.php/3843611
http://news.cnet.com/8301-30686_3-10361155-266.html
http://www.blackberrycool.com/2009/09/15/the-challenges-and-opportunities-rim-faces-insoutheast-asia/
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