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Case Study: BlackBerry's Rise In Brand Power (RIM vs. Apple)

10/14/2009 Team D.A.N.N- Neil Raj, Adriana Ng, Dave Clason, Nike Kim

Problem: NEIL

RIM does not currently have the product strategies in place to keep a consistent stranglehold upon the Smartphone market with tougher competition coming.

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Key Findings: NIKE

Apple iPhone

iPhone users are very satisfied. The iPhone users we surveyed report very high levels of satisfaction with the product. They are using its features extensively E-mail is the #1 function. The most heavily used data function on the iPhone is reading (but not writing) e-mail. The iPhone increases mobile browsing... More than 75% of iPhone users say it has led them to do more mobile browsing. ...but it has drawbacks. About 40% of iPhone users say the iPhone has trouble displaying some websites they want to visit A quarter of iPhone users say it's displacing a notebook computer. 28% of iPhone users surveyed said strongly that they often carry their iPhone instead of a notebook computer. Users are young. About half of iPhone users are under age 30 (page 29) and about 15% are students Apple sells to its installed base. At least 75% of US iPhone users are previous Apple customers - they used either iPods or Macintosh computers. The iPhone increases phone bills. The iPhone has increased its users' monthly mobile phone bills by an average of 24%, or $228 extra per year. The iPhone leads people to change carriers. Almost half of iPhone users changed carriers when they got the iPhone.

RIM BlackBerry:

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SWOT Analysis: Adriana

Strengths · RIM's unique offering and strategy. RIM was the first company to understand that mobile applications need to be delivered as part of an integrated package, including hardware, software and services, that is both complete and simple to use. RIM's business model is also a strong weapon against the competition, as it enables its resellers to charge for maintenance and support as part of a subscription, rather than charge an annual fee. This remains RIM's main strength and weapon against its competitors. · RIM's software is well designed. RIM's software is designed to be easy for the enterprise gatekeepers (usually purchasing or IT departments) to deploy, offering simple enterprise server or desktop software integration solutions. These allow users an easy upgrade path as their requirements grow, without placing heavy financial and resource burdens on the enterprise. The solution is also designed to remove the need for any additional software, which is something that customers have come to appreciate. · RIM's brand is now very powerful. With just under 5 million subscribers, RIM now has more influence than many larger device and software vendors; so much so that BlackBerry is now almost a synonym for wireless email. · RIM's offering is carrier-friendly. It is easy for MNOs to sell the BlackBerry solution to enterprise customers, and the product performs well in terms of throughput speed, latency and capacity requirements on 2.5 (and equivalent) networks, in part due to proprietary compression in both server and handheld device. Weaknesses · Scalability and global coverage. RIM's business model (selling purely through operators) means that it is dependent on operators to launch the BlackBerry service. This takes time, and the cost associated with launching can be high for smaller operators. Global presence, including small and emerging markets, can be crucial to win and extend contracts with multinational corporations (MNCs). Many MNCs are trying to rationalise their investments in mobile email by selecting a single supplier. While this is not a key issue today, mostly because of the lack of viable alternatives, it will become an important factor for enterprise users to consider in the near future. · The BlackBerry architecture. The much-discussed network operating centre (NOC) is perceived, rightly or wrongly, as a weakness in the market today. Competitors have done a good job in popularising the belief that the relay centre (through which all information sent and received by BlackBerry subscribers transits, albeit in an encrypted form) is a security issue. So far, the campaign has not affected sales to security-conscious organisations in key sectors such as government and finance. However, the need for organisations to let data transit via a third-party server, and sometimes abroad, in order to use BlackBerry is in some respects a weakness.

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· High total cost of ownership. BlackBerry is now perceived as a high-end product that is not cost effective for enterprises wishing to deploy email across a large part of their organisation. Perhaps as a result, almost all RIM's competitors now position themselves as cheaper equivalents of the famed BlackBerry. Claims made by competitors can easily be squashed today, because there is no data supporting them. However, in the future RIM should respond to such claims with smarter pricing and marketing strategies. Ideally, RIM should aim to price and package its products for different categories of workers as well as for different segments of the market as it does today. · RIM's business model is not carrier-friendly. RIM's arrangements with carriers, which include per-seat and per-BES fees, reflect the strength of its brand and the weakness of competition. Several carriers have expressed the view to us that they would at least like to have an alternative offering in their portfolio alongside BlackBerry.

Opportunities · Differentiated offerings for several categories of mobile workers. RIM's ability to cater for a growing range of mobile workers will be crucial in the future, as enterprises look to deploy mobile email across their diverse mobile workforce. Enterprises now understand the value of mobile email, but few are willing to pay a premium for company-wide deployments. · Extend the range of third-party BlackBerry devices. By licensing its software through the BlackBerry Connect and BlackBerry Built-In programmes, RIM is able to expand its presence with users who favour other form factors and device platforms. Connect and Built-In extend RIM's addressable market and improve acceptability of BlackBerry's products in certain markets, such as Nordic countries. Threats · Tougher competition. RIM is facing tougher competition than ever before, from a range of suppliers. Until now, competitors have been small niche vendors, but going forward RIM will compete with large global players such as Nokia and Microsoft, as well as with operators, many of which have launched their own branded email services. It is unclear what impact the newcomers will have on the market, but many enterprises are willing to consider them as valid alternatives to BlackBerry today.

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Competitive Analysis: Apple iPhone 3GS

The good: The iPhone 3GS finally adds common cell phone features like multimedia messaging, video recording, and voice dialing. It runs faster; its promised battery life is longer; and the multimedia quality continues to shine. The bad: The iPhone 3GS' call quality shows no improvements and the 3G signal reception remains uneven. We still don't get Flash Lite, USB transfer and storage, or multitasking. The bottom line: The iPhone 3GS doesn't make the same grand leap that the iPhone 3G made from the firstgeneration model, but the latest Apple handset is still a compelling upgrade for some users. The iPhone 3GS is faster and we appreciate the new features and extended battery life, but call quality and 3G reception still need improvement.

HTC Touch Pro2

The good: The HTC Touch Pro2 features a sharp, spacious touch screen and an easy-to-use full QWERTY keyboard. The Windows Mobile smartphone also includes conference call management tools for business users and offers good call quality. It also has 3G support, Wi-Fi, Bluetooth, and GPS. The bad: The smartphone is heavy and bulky. Onboard memory is low, and we would have liked an upgraded camera. It's a bit pricey. The bottom line: Though hefty in size and price, the HTC Touch Pro2 offers T-Mobile's business customers a powerful smartphone with robust messaging, voice capabilities, and a slick user interface.

Nokia E71x

The good: The Nokia E71x is affordably priced and offers a long list of features, including 3G, Wi-Fi, Bluetooth, GPS, and a 3.2-megapixel camera, as well as support for AT&T's various services. The QWERTY smartphone is very sleek with high-quality construction. The bad: The GPS initially took a while to find our location. The keyboard layout is somewhat cramped. The bottom line: Affordably priced, the Nokia E71x for AT&T is an incredible value for business users and consumers looking for a robust messaging smartphone Palm Pre The good: The Palm Pre's multitasking capabilities and notifications system are unparalleled. The smartphone features a vibrant display with multitouch functionality as well as a solid Web browser and good multimedia integration. The Pre offered good call quality and wireless options include 3G, Wi-Fi, Bluetooth, and GPS.

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Target Market: DAVE

The enterprise market has long formed the backbone of RIM's business, with corporate customers purchasing the vast majority of the BlackBerry devices and services sold. As a result, the consumer market has remained relatively untouched by RIM, a fact that the company has realized. With the releases of its Pearl and Curve devices, both of which are clearly aimed at more than just enterprise customers, RIM has attempted to break into the consumer segment. The reason for this is that the technology powering RIM's data offerings has improved dramatically over the years, resulting in a much more efficient operation than was possible before. This, in turn, has enabled both handset manufacturers and wireless carriers to lower costs, making the BlackBerry more affordable to the average consumer. Apple and RIM approach the Smartphone marketplace from very different perspectives. Apple's device is entertainment-centric and it sells to young people. RIM's devices are communication-centric and have traditionally sold to businesspeople in a higher age bracket. There has been a lot of media speculation of a Smartphone war between RIM and Apple, but actually they occupy very distinct territories in a highly segmented market however we intend to invade I-phone's market share. What Blackberry's got: Features: INSTANT INFORMATION: The Power of knowing -Internet Browsing -GPS & Blackberry Maps -Mobile streaming -Organizer STAY IN TOUCH: Distance is truly outdated -Email & Text Messaging -Phone -Instant Messaging -Social Networking ENTERTAINMENT ON THE GO: Bring your entertainment with you -Media Player -Music Apps -Music Accessories : Micro SD cards -Camera & Video Benefits: -Real GPS incorporated into the phone -Contacts are retrievable and you can send them to other electronic equipment -Gives the consumer the choice of preferred median to communicate through -Multi-Media text -Copy and Paste docs -Qwerty Keyboard

-Micro SD cards provide a means to expand memory -Blackberry offers blue tooth

We are targeting the mass-consumer market and more specifically the young mover shakers that I-phone currently serves. So we'll look at what a typical I-phone user is all about. iPhone owners are twice as likely as other Smartphone owners to be comfortable with advertising within the applications on their device. 33 percent of iPhone owners use maps and GPS more than ten times a month, compared to 13 percent of Smartphone owners. Almost twice as many iPhone owners than Smartphone users complete at least one financial transaction on their mobile device each month. 93 percent of iPhone owners have added an application versus only 66 percent of Smartphone owners.

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The Typical iPhone User

Battery life and wireless speed are the least satisfying aspects of the iPhone in this survey, which is not a major surprise. Battery life is a perennial complaint for all mobile devices, and the iPhone operates on a relatively slow data network. The browser and video capabilities of the iPhone also received lower scores for satisfaction.

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To make the BlackBerry more appealing to consumers, RIM has begun releasing devices that do more than just offer wireless e-mail, including such features as a media player, camera, and an overall sleeker design. Consumers have responded, enthusiastically snapping up these new BlackBerry devices. While it's difficult to break down exactly where RIM's recent growth spurt came from, it is safe to say that its rather determined foray into the consumer market is responsible for at least some of it. Considering RIM's firm lead in the enterprise market, it seems logical that the next significant avenue for continued growth would be the consumer segment. Its largest competition in the consumer market has been coming from Apple's iPhone. One way in which RIMM has been trying to be more competitive with Apple is with its offering of applications. RIMM's App World has doubled its options to around 2,000 applications which is still far behind the 50,000 that Apple has. As of July 2009, these applications are available in the U.S., U.K., Canada, Italy, France, Germany, and Spain and soon to be offered in Brazil and India.

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Assumptions:

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Alternatives (3) :

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Solution:

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Implementation Plan:

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Plan B:

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References:

http://blogs.zdnet.com/blackberry/?p=323 http://www.pcworld.com/article/143118/blackberry_dominates_enterprise_but_iphone_users_happier.html http://www.bloggingstocks.com/2009/04/02/will-rims-deep-dive-into-consumer-market-yield-treasure/ http://macdailynews.com/index.php/weblog/comments/22610/ http://reviews.cnet.com/best-smartphones/ http://www.blackberry.com/select/get_the_facts/pdfs/vendor/OVUM_RIM_in_the_mobile_enterprise_mar ket.pdf#3 http://lowendmac.com/inews/08inews/0404.html http://rubiconconsulting.com/downloads/whitepapers/Rubicon-iPhone_User_Survey.pdf

MKTG 1102 David Wan

MKTG 1102 David Wan

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Case Study: BlackBerry's Rise In Brand Power (RIM vs. Apple)

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