Back to Black - How BlackBerry Can Win the Smartphone War

Back to Black: How BlackBerry Can Win the Smartphone War

1


Table of Contents

Executive Summary....................................................................................................................................... 3
Problem ......................................................................................................................................................... 4
Key Findings, Facts and Assumptions ........................................................................................................... 4
Key Findings .............................................................................................................................................. 4
Facts ...................................................................................................................................................... 6
Assumptions.............................................................................................................................................. 7
Limitations ................................................................................................................................................ 7
SWOT Analysis............................................................................................................................................... 8
Competitive Analysis ..................................................................................................................................... 9
Company Profiles ...................................................................................................................................... 9
Market Share ............................................................................................................................................ 9
Product Comparison ............................................................................................................................... 10
Target Market ............................................................................................................................................. 11
Business Professionals: BlackBerry Veterans ......................................................................................... 11
Students: Possible First-Time Users ........................................................................................................ 11
Incidental Users: BlackBerry Love by Accident ....................................................................................... 12
Alternatives ................................................................................................................................................. 13
Alternative #1 - BlackBerry Core: The Ultimate Business Phone ............................................................ 13
Alternative #2 - BlackBerry Light: A Powerful Student Phone ................................................................ 13
Alternative #3 - BlackBerry: Continue Competing with Apple and Android ........................................... 14
Solution ....................................................................................................................................................... 14
Implementation .......................................................................................................................................... 15
Plan B .................................................................................................................................................... 16
Conclusion ................................................................................................................................................... 18
Course Concepts ......................................................................................................................................... 19
Appendix ..................................................................................................................................................... 20
References .................................................................................................................................................. 21

2


Executive Summary
Research in Motion (RIM) is a global leader in wireless innovation, allowing millions of
customers around the world stay connected to the people and content that matter most
throughout their day (RIM 2011).
Once the leader in the smartphone1 market with its BlackBerry products, RIM is now
suffering from loss of market share to the competition, primarily Apple and Android.
Creative Copy has been contracted by RIM to formulate a marketing plan that will help
the company gain back lost market share, increase profits and, in turn, increase
shareholder value.
The mobile device market environment is fluid. Players in the market must– at the very
least – be adept at keeping up with technological advances. Dramatic expansion in the
use of smartphones and their peripheral applications (“apps”) has led to opportunities
for the competition to gain market share from RIM.
RIM’s once unrivalled image has suffered from a series of setbacks recently. Its answer
to Apple iPad, the BlackBerry Playbook, was met with lukewarm reviews and
underwhelming sales figures. Rumors have been swirling of problems with new product
development and release, and share prices have fallen dramatically over the past year.
RIM still retains a healthy market share of global cellphone sales at 2.5% in the third
quarter of 2010. However, its share of global smartphone sales has fallen significantly
from 20.7% in the third quarter of 2009 to 14.8% in the third quarter of 2010 (Gartner
2010).
Fortunately for RIM, the target market for smartphones is vast. Key market segments
across age groups and income levels create the need for a variety of phones with
different features to appeal to users of each group.
Our solution proposes three different new products to appeal to different market
groups. We will explore the strengths and weaknesses of appealing to the different
market segments. With our chosen alternative, we will outline an integrated marketing
strategy to bring the BlackBerry brand back to its rightful place at the forefront of the
smartphone movement.

1
The definition of smartphone, for the purposes of this report: a high-end mobile phone that
offers more advanced computing ability and connectivity than a contemporary feature phone
(i.e. a modern low-end phone). A typical model will combine the functions of a portable media
player and camera phone; possess a high-resolution touchscreen, GPS navigation, Wi-Fi and
mobile broadband access. A smartphone runs a complete mobile operating system. (Wikipedia
2011)

3


Competitive Analysis
Company Profiles
RIM has gained much of its success with its flagship product, the BlackBerry. Introduced
in 1999, the BlackBerry has since evolved with a highly successful line of sleek phone
handsets. The BlackBerry is a status symbol amongst business professionals, particularly
because of its instant-messaging (BBM) technology.
Apple Inc. designs consumer electronics, software and computers. It released the first
touchscreen phone—the widely successful iPhone—in 2007. Apple’s reputation is built
on products with innovative technology, sophisticated design, and intuitive operating
systems that virtually anyone can master.
Android is an operating system owned by Google Inc. Distinct for being an open-source
platform, Android is available across multiple brands of phone handsets, including HTC,
Samsung and Motorola. Android phones are an affordable, high-performance
alternative to other smartphones.

RIM faces different challenges from these companies respectively. Apple has a huge
following of consumers loyal to its brand. Because it releases updated versions of its
products only once or twice a year, its products are always met with widespread
anticipation. In recent years, Android’s popularity has been growing exponentially:
unlike its competitors, its target market is not restricted to mid-high end consumers.
Android handsets have a broad range of price points, which enables it to target low-to-
high end consumers.

Market Share

Figure 3: North American smartphone market share from 2010-2011

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RIM had a strong hold of the smartphone market in 2010, but faltered this year in the
midst of poor sales figures declining stock prices and negative publicity. Its competitors’
figures, d It
respective market shares grew in 2011: Apple’s market share jumped by 6%, a 28% gain
for the company. The Android platform suddenly took 36% of the marketplace, an
astonishing 287% increase from 2010.

Product Comparison

BlackBerry Apple Android
Torch 9800 iPhone 4 HTC Status
Price (CDN$) 699.99 649.99-759.99 399.99
Release date August 2010 July 2010 September 2011
Screen Size 3.2” 3.5” 2.6”
Screen Resolution 360x480 640x960 320x 480
Processor 624 MHz 1 GHz 800 MHz
Operating System WebKit iOS4 Android 2.3
Keyboard Slide-out QWERTY Touchscreen QWERTY
Storage 512mb+4GB microSD 16GB / 32GB 512mb+2GB microSD
External Storage microSD None microSD
Camera (MP) 5.0 rear 5.0 rear, 2.0 front 5.0 rear, 0.3 front
Wireless Tethering No Yes Yes
Face-time No Yes No
GPS Yes Yes Yes
Table 2: Comparison of s
: smartphones: Blackberry Torch 9800, Apple iPhone 4, Android (HTC) Status
:

The iPhone 4 surpasses the BlackBerry Torch in most of these technical specifications.
However, the phones share a similar price point, which can lead consumers to perceive
the iPhone 4 as having more value. BlackBerry’s other competitor, the HTC Status,
he Status
captured BlackBerry’s signature design, including its hardwired QWERTY keyboard. The
k
name “Status” also plays on BlackBerry’s reputation as a status symbol of business
professionals. Evidently the Status is not as powerful as the Torch, but its price point is
vidently
60% less, which can appeal to consumers seeking an inexpensive BlackBerry alternative.
Black
It may even tempt BlackBerry loyalists into converting to Android.

10


Target Market
As a high-priced status symbol with business-focused functionality, the BlackBerry
currently appeals to middle-class and upper-class consumers. iPhones, on the other
hand, are known for productivity as much as they are known for entertainment,
particularly with internationally successful games like “Angry Birds” and other novelty
applications. As such, it appeals to younger generations of consumers.
Although there are some similarities between these two target markets – a largely
middle class upbringing, a relatively high level of education among the adult users and
an urban geographic location – the marketing mix will be distinct depending on which of
these markets RIM chooses to focus on.

Business Professionals: BlackBerry Veterans
Located mainly in major metropolitan centers, this urban group is characteristically:
Born within Generation X (Gen Xers) or Baby Boom cohorts. Gen Xers are
considered skeptical shoppers who gravitate towards products of convenience.
They have money to purchase high-end products that are functional, reliable,
and support their lifestyles.
Financially stable with middle-class consumers earning at least $30,000.
according to Stats Canada, 87% of families and 42% of individuals fall within this
bracket (Statistics Canada 2011). This bracket also includes upper-class
consumers with incomes of $70,000 and above.
Educated with some form of tertiary education.
Successful in middle-management to executive white collar workers.
This group feels a strong need to be connected to the workplace even when not at
work. They are compelled to check emails, send and receive electronic files, and manage
their schedule at all times---whether they’re in the office or not.
Behaviourally, these consumers are self-sufficient and lead comfortable lifestyles,
although they proceed cautiously with large purchases.

Students: Possible First-Time Users
Also located in major metropolitan centers, the student population is characteristically:
Young adults (or Gen Yers) are brand conscious and technologically savvy. They
tend to be early adopters of new technology, and are less susceptible to
marketing ploys and direct sales pitches. Gen Yers are trendsetters and, as such,
are highly valuable to any marketing strategy.
Financially limited, with incomes that differ depending on their family of origin.

11


Educated with a high school diploma. They are likely pursuing tertiary education.
Many within this group did not know a world without the Internet, and they demand to
be connected at all times. Unlike business professionals, however, the primary purpose
of connecting is to socialize with peers. Gen Yers are very discerning when it comes to
technology and a product’s performance. They expect products to deliver value and
brands to keep their promises.

Incidental Users: BlackBerry Love by Accident
Tweens and seniors are not considered focal points for the BlackBerry’s target market.
However, tweens are likely to follow the lead of the technology mavens, Gen Y. Tweens
have a great amount of spending power yet less cash overall, so they make the majority
of their purchasing decisions with their parents.
Meticulous and quality conscious, seniors have money to spend but are late adopters
who take more time to make purchasing decisions. Seniors are also an unlikely target
group for BlackBerry though they may be influenced by family members or former
colleagues who attest to the value and quality that BlackBerry’s offer.

12


Alternatives
Alternative #1 - BlackBerry Core: The Ultimate Business Phone
Rather than emulating the iPhone, RIM must return its attention to the consumers who
stood by it for years: business professionals and corporations. A smartphone designed
to meet and exceed their needs can win back their loyalty.

Features Conference video-calling over 4G Cloud servers and Bluetooth for
and Wi-fi wireless synching between phone
and computers at home or work
PowerPoint Projector, with a
compact bulb powerful enough to Infrared technology (faster than
project presentations on a wall Bluetooth) for fast file transfer and
anywhere--without needing a to read q-codes
conference room

Price $599.99 for device, $149.99 with a 3-year contract. This is slightly higher than
the BlackBerry Torch, but less expensive than the iPhone 4. Corporations that
purchase in large quantities may qualify for wholesale pricing.

Target Market Corporations and individuals business professionals
24-40 m/f split

Advantages / Increase in revenue with new price x Slightly higher target price
Disadvantages Targets affluent, higher-income x Technological development required
market segment with more capital
x Abandons the larger, broad market
Secure already loyal target market
Regain consumer confidence in x Brand may lose the “cool” image
brand that Apple and Android have
captured
Features never before seen
technology (Conference video
calling over 4G)

Table 4: Profile of BlackBerry Core

Alternative #2 - BlackBerry Light: A Powerful Student Phone
Designed with the student budget in mind, the BlackBerry Light is a streamlined phone
that integrates only the most necessary BlackBerry features (BBM instant messaging,
cameras, app marketplace, QWERTY keyboard) into one compact, affordable phone.

Features Enterprise Server Express - Superior speech-to-text for
University Edition: A hub for accurate voice commands
accessing school e-mail, course
Available in many colours, including
content, schedules, etc.
snap-on faceplates
Lightweight
Back-lit QWERTY keyboard

Price $199.99, significantly less than the HTC Status. Free with a 3-year contract

13


References

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6F (accessed July 23, 2011).
Daly, Brenon. "Inorganic Growth > RIM calls Internationally." Inorganic Growth. June 16, 2011.
http://blogs.the451group.com/techdeals/ma/rim-calls-internationally/ (accessed July 23, 2011).
Gartner. "Gartner Says Worldwide Mobile Phone Sales Grew 35 Percent in Third Quarter 2010;
Smartphone Sales Increased 96 Percent." Gartner. November 10, 2010.
http://www.gartner.com/it/page.jsp?id=1466313 (accessed July 13, 2011).
geekaphone. "RIM vs the World | Geekaphone Blog." Geekaphone. 2011.
http://www.geekaphone.com/blog/rim-vs-the-world/ (accessed July 20, 2011).
Gizmofusion. "Developers Dropping BlackBerry App Support, Good or Bad?" Gizmofusion. June 21, 2011.
http://gizmofusion.com/2011/06/developers-dropping-blackberry-app-support-good-or-bad/
(accessed July 23, 2011).
Grewal, D.G., Levy, M., Lichti, A., and Persaud, S. Marketing: Canadian Edition. Toronto: McGray-Hill
Ryerson Limited, 2011.
Hartley, Matt. "Other shoe drops for RIM staff." The Montreal Gazette. July 26, 2011.
http://www.montrealgazette.com/business/money/Other+shoe+drops+staff/5157905/story.html
Ogg, Erica. "Anonymous letter bemoans RIM management woes | Circuit Breaker." cnet. June 30, 2011.
http://news.cnet.com/8301-31021_3-20075817-260/anonymous-letter-bemoans-rim-management-
woes/ (accessed July 23, 2011).
—. "RIM misses on revenue, announces layoffs | Circuit Breaker - CNET News." cnet. June 16, 2011.
http://news.cnet.com/8301-31021_3-20071715-260/rim-misses-on-revenue-announces-layoffs/
Research in Motion. Google Privacy Policy. July 26, 2011.
Statistics Canada. "Av." Average income after tax by economic family types. 2011.
http://www40.statcan.ca/l01/cst01/FAMIL21A-eng.htm (accessed July 25, 2011).
—. "Family income, by family type." Statistics Canada. 2011.
http://www.40.statcan.ca/l01/cst01/FAMIL106A-eng.htm (accessed July 26, 2011).
Wikipedia. "Smartphone." Wikipedia. 2011. http://en.wikipedia.org/wiki/Smarphone (accessed July 26,
2011).

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Back to Black - How BlackBerry Can Win the Smartphone War

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Back to Black - How BlackBerry Can Win the Smartphone War