BLACKBERRY’S RISE IN BRAND POWER
THE DUELING MARKETING STRATEGIES OF RIM VERSUS APPLE
Prepared for
David Wan,
Professor
British Columbia Institute of Technology
Prepared by
Jimmy Chang,
Jonathan Fulcher,
Nitesh Prasad,
Li Li Xian,
Yu Yan Tan,
Numb3r Crunch3rs – H
MKTG 1102
October 20, 2009
Table of Contents
PROBLEM ....................................................................................................................................... 2
FACTS ............................................................................................................................................. 3
COMPETITIVE ANALYSIS .................................................................................................................. 3
TARGET MARKET ............................................................................................................................ 4
ASSUMPTIONS ................................................................................................................................ 4
SWOT ANALYSIS ............................................................................................................................. 5
ALTERNATIVES ................................................................................................................................ 6
SOLUTION ....................................................................................................................................... 7
STEP BY STEP IMPLEMENTATION..................................................................................................... 8
PLAN B............................................................................................................................................ 9
APPENDIX 1 .................................................................................................................................. 10
APPENDIX 2 .................................................................................................................................. 11
APPENDIX 3 .................................................................................................................................. 12
CASE CONCEPTS ....................................................................................................................................... 12
REFERENCES ................................................................................................................................. 13
Page 2 of 13
Problem
How can RIM, pioneers of the Smartphone industry, sustain their market share with the pressure
from major competitors such as Apple’s iPhone?
Facts
Research in Motion was founded by Mike Lazaridis in 1984. The company worked on various
telecommunication devices and in 1998 introduced the first Blackberry. Shortly after the release of
the first Blackberry, the Blackberry 850 was introduced with the very first QWERTY style keyboard.
Since the release of the first Blackberry, RIM has developed numerous models. The release of the
most recent models, the Blackberry Storm 1 and 2, are the response to Apple’s successful
Smartphone, the iPhone.
The Blackberry has been the leader of the Smartphone until recently the iPhone has been
released and due to Apple’s past, the popularity of the iPhone has been large due to preceding
products such as easy to use iPods. Apple has tripled their sales from 2004-2007. It is still in its growth
stage thus came the iPhone 3G and 3GS upgrades. People can’t get enough of the iPhone.
BlackBerry is known to cater to the professional executive types, while the iPhone caters to
more of the consumer market. RIM’s previous strategy was a differentiated segmentation but now
seems to be changing to a mass segmentation strategy to entice the consumer market, much like
Apple did with their products.
Research truly displays the threat the iPhone has on RIM. Appendix 1 displays Apple’s growth
in the market share of Smartphones.
Competitive Analysis
BlackBerry is well known in the world as the pioneer of SmartPhones, but over time the
market share has been slowly distributed amongst other competitors such as Palm, Apple, Nokia and
HTC. Lately, their greatest competitor is Apple because of the similarity of products and prices.
Apple has sold over 88 million iPods. By the time Apple released the first iPhone in June 2007,
the world clearly had tremendous brand awareness of Apple. Consumers see Apples product line as
cool, funky, and stylish. Furthermore, the success of Apple is often attributed to the “userfriendliness” of its products. Appendix 2 shows the comparison between the BlackBerry Storm 2 and
its most similar competitive product, the iPhone 3GS.
Page 3 of 13
Target Market
RIM has a very specific target market for its Blackberry. The age demographic that will most
likely be purchasing the Blackberry includes all of generation X and the older half of generation Y.
More specifically, they are targeting 20 to 45 year olds. As far as gender is concerned, it is almost
equal in the amount of BlackBerry usage by each gender with females having a bit higher usage at
54%. The occupation targeted is people working in corporations, mid-sized businesses and business
related jobs. The Smartphone is aimed mainly at consumers that generate income of $35,000 and
more. Education is generally consumers with some level of post secondary education. Since
Blackberry’s are sold globally, the target ethnicity is all ethnicities. There isn’t a particular religion that
they market to but consumers are usually people that want to stay connected all the time.
BlackBerries are intended for 1st world countries as well as developing countries with increasing
technology.
Assumptions
Some assumptions which can be made about this case is that BlackBerry can produce more
profit if they expand their horizons and move onto different target markets besides just business
owners or employees that are associated with business. They are targeting too little compared to
Apple’s iPhone advertisements. On that topic, changing the advertising and target market could in
fact lose revenue in the long run because they lose that “professional” image which has taken many
years to build up.
It can be assumed that if BlackBerry doesn’t improve its market share, Apple will eventually
take over the mobile internet telecommunications and entertainment services. Apple’s
advertisements are seen as new age and hip. The rising generations such as generation X and Y are so
accustomed to the hipper Apple products that it will be hard to change their views in the future. See
Appendix 2 for generational cohort usage of specific mobile features
Another assumption that can be made is that the easy to use product line from Apple will
slowly weed out the harder to use BlackBerry’s. Apple bases a lot of their marketing strategy on how
easy to use their products are.
Page 4 of 13
SWOT Analysis
Strengths

Currently the leader in mobile internet telecommunications (in the US over 50% of the
market share)

To date, there have been over 60 Blackberry models released.

The Blackberry has really succeeded in capturing the “business” market. Many
corporation use Blackberries for all their staff.

Sleek, stylish products that are very attractive and flexible prices

Gives customers the tools they need which in turn creates a big loyal customer base
Weaknesses

Security flaws

Market so far is only business people and not really in the consumer market

Blackberry doesn’t have its own franchise. It depends on its carrier to sale its products

Some people will associate a product name like Blackberry with a product that serves
only one market like business people. Even though the blackberry may be trying to
expand its market, the name may hinder some consumers from purchasing them.
`Opportunities

The economy fully recovers and more people can afford a Blackberry over just an
average cell phone

Demand for Blackberry increases/ demand for iPhone decreases: consumers decide
that a business style Smartphone is a better choice

Business can be developed internationally; emerging markets such as China and India
have a new richer generation of consumers.

It has a large market that have not been developed due to its professional image
Threats

Companies such as Apple, Nokia, Sony, Microsoft, and HP grow and take over market
share

Increased manufacturing costs (prices of materials go up)
Page 5 of 13

Apple is a much larger company ($37.48B USD 2008 revenue and 35000 employees
versus RIM’s $11.065B USD 2008 revenue and 12000 employees)

The technology engaged in the products has been copied or caught up by other
competitors.
Alternatives
1. RIM will create two separate product lines. One line continues the Blackberry as it is now, and
the other will create a whole new line that is targeted toward the consumer. The new line will
be known as “Lifestyles by Blackberry” and will have a purpose of gaining more of the market
share of consumers who want a Smartphone that isn’t dedicated to business purposes like the
iPhone. With two distinct lines of Smartphones, RIM will see continued support of the
Blackberry by the business world, as well as adoption of the new line by consumers.
Advantages include interest in a new product by consumers, continued sales or original
Blackberrys because consumers know their product isn’t being compromised and an
expansion in RIM’s market. Disadvantages include cost and subsequent risk involved with
developing a new product, upset customers that prefer the one line only, and a lack of
interest for the product.
2. An alternative is that RIM can continue its efforts in the research and development of the its
products and at the same time create a blockbuster image. This will not only be an image, it
will be a club, an exclusive society, a way of living. The “Blackberry Life” will consist of monthly
meetings, partnered seminars, discount products, member clubs, fitness centers, the opening
of new stores, and hosted entertainment in lounges and clubs. All of this will help the
company by making it easier for RIM to get feedback from its consumers, increasing its loyal
customer base, and additional revenues from seminars. However, if promoting doesn’t go as
well as planned then clubs will fail and the costs of creating this “Blackberry Life” could put
the company in financial trouble. Also Blackberry might not have enough to offer to this image
since it mainly provides telecommunications devices.
Page 6 of 13
3. Our last alternative is that BlackBerry should innovate and improve technology. RIM company
has abounded resources, 1700 partners of RIM developers, technical expertise, huge
prestigious engineers. Moreover, it is the NO .1 on Forbes 2009 magazine list of FastestGrowing Companies, with a three-year average earnings-per-share growth of 84% and
revenue growth of 77%. Thus, RIM has capability of technology and finance to innovate and
improve its technology. First, RIM needs to develop applications in its App Store. It should
come up with consumers’ demands immediately. Second, RIM should improve MDS software
platforms because mobile phone users want to access the web more than they want to make
calls, and MDS applications are built on web services. Advantages are reinforcing ability of
competition to capture market share, attracts younger adults, and develops potential market.
Disadvantages are that product may be similar to iPhone, may lose some loyal customers, and
might lose share in their specific market.
Solution
It is in the best interest of RIM to make a change in their marketing strategy and make every
possible effort to hold on to the current market share they have as well as try to attract a larger
market. It is quite evident that Apple is a strong competitor and has put RIM in a threatened position.
RIM should implement a new marketing strategy aggressively due to the recovering economy. An
alternative for RIM would be to create two separate product lines. The first would simply be the
Blackberry as we know it today. It would still be the preferred device for the business person. They
should continue to market it as they are but keep the focus completely on the business person and
not at all towards the consumer. The second product line would be totally separate from the
Blackberry, complete with a different name. This product line will be targeted toward the consumer
not concerned with a device that can provide business related features. Rather, this product line will
be more fun and be targeted toward the younger market that the iPhone is currently dominating.
With two distinct lines of Smartphones, RIM will see continued support of the Blackberry by the
business world, as well as adoption of the new line from consumers.
Advantages of this new marketing plan include an interest in the line from consumers because
it does not appear as a Blackberry yet holds the brand equity. Also, for the new line, RIM can rid of a
lot of the features the current Blackberry has to make the new line completely dedicated to nonPage 7 of 13
business functionalities. A third advantage is that loyal Blackberry users will realize that the
Blackberry isn’t making any compromises by trying to satisfy the two markets with one product;
rather, they are dedicating the Blackberry just to business purposes.
However, these changes can also have negative effects on RIM. Although avoiding the
Blackberry name in the new product line may encourage some consumers, it is also risky because
consumers may not be comfortable buying an unfamiliar brand. Another disadvantage is the costs
involved with having to design and market the new product line. Lastly, some people may have liked
the way the Blackberry was between a business device and a personal device, instead of two separate
products.
Costs would be a vast amount. Undetermined exactly, but it can be said that this new product
line would be quite risky. Prices to produce new product would be around 175 – 200 dollars per unit.
This doesn’t include advertising, shipping and packaging costs. It takes roughly $5 to package each
unit.
Step by Step Implementation
1. The first step in introducing the “lifestyles by Blackberry” product line is to spend a
considerable amount of time determining exactly what people will want in it. It has already
been determined that a product line of its kind is needed; however, more research needs to
be conducted to determine exactly which unnecessary features need to be dropped from the
original Blackberry and which need to be added to the lifestyles line. One of the many ways
RIM will conduct research in this regard is by utilizing customer input through reaching out to
potential customers with methods such as surveying.
2. RIM will also have to research what they should charge for the new product line in order to
create good value. Customers will only be attracted to this new line if it is obvious that the
benefits of the product outweigh the cost. Furthermore, since the lifestyle line is designed to
be less serious than the original Blackberry line, it should be even cheaper than the original
Blackberry line.
Page 8 of 13
3. RIM will run a test market of the developed product in Vancouver. Vancouver is quite diverse
in every aspect such as ethnicity and generation cohorts so results of the test will be quite
accurate. Also, the income differentiation is not as much as some larger cities. The test will
commence in June of a certain year and continue through summer as well as back to school
time. Just as if the product were being released globally, RIM will provide all of the elements
of marketing that will contribute to the success of the product. The advertising techniques
used for this product are very important. RIM must strategically advertise each line of
Blackberry, the lifestyle and the original, separately. For example, the Blackberry will be
marketed a lot in the downtown core to continue to target the business person, as well as in
business magazines and other areas that professionals often see. Conversely, the lifestyles line
will be advertised in areas such as online social networks such as facebook, non-business
magazines, billboards and other areas that the defined target market will likely see.
4. Following the test market of the lifestyles product line, RIM must carefully analyze all of the
information they have received to determine how this product will do if released globally.
Also, some changes can be made at this time to fine tune the product based on the results of
testing. In the unlikely event that the lifestyles line does not do well in Vancouver, RIM will
have to seriously consider abandoning the project altogether. If RIM does find that the
product line proved itself popular in the test market, they will release the line globally.
Plan B
If the recommended solution fails or doesn’t seem to help the company then RIM should take
action in implementing the 2nd alternative. Partnering up with investment and business related
companies to hold seminars offers users valuable information as well as makes potential users aware
of RIM products. The hosting of meetings will allow consumers to have face to face communication
with the company’s top managers about flaws, new ideas, improvement, prices, and other topics.
This type of “Life” is a promotional strategy to create an image for BlackBerry that is not only
comprised of a phone. RIM has settled its lawsuit with Visto and expects its share price to rise from
$0.86 to $1-1.08 a share by the end of its third quarter ending November 28, 2009. This means they
will likely earn between $580 million to $620million during the quarter and a proportion of that can
be allocated to the R&D Department for the “Life”.
Page 9 of 13
Appendix 1
2009 Second Quarter
2008 Second Quarter
Fujitsu
3%
Other
25%
HTC
6%
Nokia
45%
Nokia
48%
Fujitsu
3%
Apple
13%
HTC
4%
Apple
3%
Other
14%
RIM
17%
RIM
19%
2Q08
2Q09
Market
2Q09
Market
2Q08
Share
Sales
Share (%)
Sales
(%)
18,441.0
45.0
15,297.9
47.4
Research In Motion
7,678.9
18.7
5,594.2
17.3
Apple
5,434.7
13.3
892.5
2.8
HTC
2,471.0
6.0
1,330.8
4.1
Fujitsu
1,249.0
3.0
1,071.5
3.3
Others
5,688.2
13.9
8,085.8
25.1
Total
40,962.8
100.0
32,272.7
100.0
Company
Nokia
Apple: Grew 508.9% from 2Q08 to 2Q09.
RIM: Grew 37.7% from 2Q08 to 2Q09.
Page 10 of 13
Appendix 2
Comparison of most recent Blackberry and Apple products
BlackBerry Storm 2
iPhone 3GS

356 hour battery on standby

300 hour battery on standby

Built in BlackBerry messenger for

Application can be downloaded for
direct messaging
messenger

3,2 megapixel camera

3.2 megapixel camera

Multi-touch screen

Multi-touch screen

Removable memory

No removable memory

GPS assisted and standalone

GPS assisted and standalone

Screen size = 3.25 inches

Screen size = 3.5 inches

Minimal applications

75 000 + applications

No video editing on phone

Editing can be done on the phone

$600(1gig internal + 8gig memory

$580(8gig) $680 (16gig) $780
card included)
(32gig)

155 grams

135 grams

$203 to produce each unit

$179 to produce each unit
Page 11 of 13
Appendix 3
Case concepts
The BlackBerry products are owned by Research In Motion, this shows Brand Ownership. BlackBerry
uses an individual brand. Each new BlackBerry that comes out is part of brand extension because the name
BlackBerry is already established and the models are just different. There is reverse engineering involved
within the battle between iPhone and BlackBerry Storm because of how alike each product is. The product life
cycle stage that BlackBerry is going through can be defined as either the growth or maturity stage. A brand
association that can be associated with BlackBerry is a professional executive persona. SWOT was used in the
case report and also in determining a solution. Market penetration strategy is used in our third alternative and
the diversification strategy is used in our solution. It is evident in developing a new product that appeals to a
broader market.
Page 12 of 13
References
This case was developed by the Numb3r Crunch3rs with reference to:

iPhone Info.
http://www.theiphoneblog.com/2009/10/14/verizon-blackberry-storm-2-iphone-chart-cakelie/

iPhone manufacturing costs
http://mashable.com/2009/06/24/iphone-3gs-cost/

Apple Info.
http://en.wikipedia.org/wiki/Apple_inc

RIM Info.
http://en.wikipedia.org/wiki/Research_In_Motion.



2008-2009 Sales chart and graphs
http://www.allaboutsymbian.com/news/item/10283_Gartner_Q2_world_smartphone_sa.ph
p
http://www.macrumors.com/2009/08/12/iphone-share-of-smartphone-sales-continues-toincrease/
U.S. Market Share
http://www.foxnews.com/story/0,2933,419264,00.html

Blackberry demographics
http://www.claritas.com/collateral/c2/marketing/communication-trends-report-corp-col5075.pdf

Blackberry 2009 revenues and lawsuit
http://www.zdnetasia.com/news/communications/0,39044192,62058076,00.htm

Apples features
www.apple.com

Blackberry features
www.blackberry.com
Page 13 of 13