RIM (Research in Motion):

Company profile:
Research In Motion Limited designs, manufactures, and markets wireless solutions for the worldwide mobile communications market. The company, through the development of integrated hardware, software, and services that support multiple wireless network standards, provides platforms and solutions for seamless access to time-sensitive information, including email, phone, short messaging service, Internet, and intranet-based applications. Its products and services principally include the BlackBerry wireless platform, the RIM Wireless Handheld product line, software development tools, and other software and hardware. The companys BlackBerry smartphones use wireless, push-based technology that delivers data to mobile users business and consumer applications. Its BlackBerry smartphone portfolio includes BlackBerry bold series, BlackBerry storm series, BlackBerry tour, BlackBerry curve series, and the BlackBerry pearl series. The companys BlackBerry enterprise solutions comprise BlackBerry enterprise server, BlackBerry enterprise server express, BlackBerry mobile voice system, and hosted BlackBerry services. Its technology also enables third party developers and manufacturers to enhance their products and services with wireless connectivity to data. In addition, the company provides BlackBerry technical support services, non-warranty repairs, and nonrecurring engineering services. Further, it offers BlackBerry App World that provides BlackBerry smartphone users with a Web and on-device electronic catalogue that aids in the discovery and download/purchase of applications directly from their BlackBerry smartphone. The company markets and sells its BlackBerry wireless solutions primarily through global wireless communications carriers and third party distribution channels. Research In Motion Limited was founded in 1984 and is headquartered in Waterloo, Canada.

Key Executives:
Mr. Michael Lazaridis Co-Founder, Co-Chief Exec. Officer, Pres, Director and Member of Strategic Planning Committee Mr. James L. Balsillie Co-Chief Exec. Officer Mr. Brian Bidulka Chief Financial Officer Mr. David Yach Chief Technology Officer of Software Mr. Donald Morrison Chief Operating Officer of Black Berry

Company History: Early History: 1984-90 Research in Motion Ltd. (RIM) was founded in 1984 in Waterloo, Ontario, by Mike Lazardis. Lazardis, the son of Greeks who immigrated to Canada from Turkey in 1967, was 23 at the time. He had recently dropped out of the University of Waterloo, where he was studying electrical engineering. Backed by loans from friends and family, Lazardis and two friends started RIM. The company's first contract came from General Motors of Canada Ltd. for industrial automation. For several years the company survived by moving from contract to contract. By the late 1980s RIM had about $1 million in sales and about a dozen employees. Developing Digital Wireless Systems: 1990s RIM became interested in the long-term potential of digital wireless devices after it received a contract in 1987 from Rogers Cantel Mobile Communications, Inc., a paging and cellular telephone operator that was a subsidiary of Rogers Communications Inc. The contract required RIM to investigate the potential of newer wireless digital network systems being developed by Sweden's LM Ericsson. RIM was soon manufacturing tiny wireless radio modems. By the mid-1990s these modems were being used by original equipment manufacturers (OEMs) in products ranging from computers to vending machines. By 1991 RIM was developing software to support a complete wireless e-mail system. In January 1992 Ericsson introduced its first portable radio modem, which was designed for Hewlett-Packard Co.'s palmtop computer. Realizing that he was better at engineering than corporate finance, Lazardis hired James Balsillie in 1992 to handle the company's finances and business development. Balsillie was a chartered accountant with an M.B.A. from Harvard University. He previously held executive positions with Ernst & Young in Toronto and with Sutherland-Shultz Ltd. Balsillie subsequently became RIM's chairman and co-CEO with Lazardis. By 1996 manufacturers were beginning to focus on developing smart pagers that would utilize packetbased networks to provide wireless Internet access. RIM's pocket-sized smart pages would let users exchange pages, e-mail, and Internet messages via either network. Other companies developing similar smart pagers included NEC America Inc. and Motorola. When RIM introduced its Inter@ctive pager in September 1996 at the PCS '96 trade show in San Francisco, the pager was able to use both the Ardis and RAM wireless networks. An innovative two-way messaging device, the Inter@ctive pager featured a QWERTY keyboard and a small, text-only display screen that showed four lines of text. The list price for the Inter@ctive pager was about $675, not including service fees. Released commercially in 1997, the Inter@ctive pager quickly became RIM's best-known product. By early 1998 the company had signed a contract to supply IBM with Inter@ctive pagers for use by its field service representatives across North America. Other customers included Panasonic Corp., Mobile Integrated Technologies, and Telxon Corp. RIM completed its initial public offering during fiscal 1998. The company's stock was traded on the Toronto Stock Exchange. For 1998, RIM reported revenue of US$21 million and net income of US$400,000. The company was in good financial shape. It had C$100 million worth of backlogged orders and C$109 million of cash and short-term investments. It planned to use about half of its cash on new equipment, sales and marketing, research and development, and as working capital. The company planned to use 10 to 15 percent of its sales revenue toward research and development.

Near the end of 1998 RIM introduced an upgraded version of its Inter@ctive pager. The 950 model was smaller, cheaper, and had a longer battery life than its predecessor, the 900 model. Popularity of RIM's BlackBerry: 1999 Sensing that the time was right for corporate e-mail appliances, RIM introduced the BlackBerry mobile e-mail solution in February 1999. The BlackBerry included a wearable wireless handheld device with service initially provided by BellSouth's wireless network in the United States and Cantel AT&T wireless data network in Canada. A unique aspect of the BlackBerry was that it featured a push system for email delivery, whereby e-mail messages were relayed from the user's personal computer or corporate server to the BlackBerry without having to dial in. The BlackBerry was an always on, always connected product that never had to be turned off. At its introduction a BlackBerry subscription package was priced at $399 with a monthly service charge of $40. Around this time RIM introduced the BlackBerry Enterprise Server, an optional add-on server that allowed e-mail to be redirected from the server rather than the desktop. For 1999, RIM's revenue more than doubled to US$47.5 million. Net income was US$6.8 million. During the second half of 1999 RIM announced that several operators were offering RIM messaging solutions. In the United States RGN Corp. became the first Internet service provider (ISP) to offer the BlackBerry wireless e-mail solution to subscribers. GoAmerica Communications Corp. announced its support of email access for the Inter@ctive 950 pager and BlackBerry service. Internationally, Venezuela-based Telcel Cellular became the first Mobitex operator in Latin America to offer a messaging solution using RIM's Inter@ctive 950e pager, which was the Spanish-language version of the Inter@ctive 950. RIM's Inter@ctive pagers were contributing about 70 percent of the company's revenue, and BellSouth was the largest customer for those devices. However, new customers were being signed up, including American Mobile Satellite Corp. and Paging Network Inc. In addition, RIM signed a distribution agreement with Dell Computer whereby Dell account executives would sell BlackBerry devices to large corporate accounts. News of the distribution agreement helped boost RIM's stock price to more than C$80 per share by the end of 1999, up from C$46.20 on November 1. New Competitors, Leading to Upgrades: 2000 RIM's BlackBerry enjoyed good reviews and was named Product of the Year by InfoWorld, which said, "The BlackBerry wins hands down when it comes to easy and timely access to e-mail messages." In January 2000 RIM and Canadian telecommunications giant Nortel entered into a joint marketing and product development agreement, which included a $25 million investment in RIM by Nortel. RIM also signed another agreement with Compaq Computer, which agreed to distribute RIM's BlackBerry service to its corporate clients. In April 2000 the company received a C$34 million investment from the Canadian government under its Technology Partnerships Canada (TPC) program. Around this time RIM introduced the first of its Wireless Handheld products, the BlackBerry 957, priced at $149. It featured a larger screen than the BlackBerry 950, a 32-bit Intel 386 processor, five megabytes (MB) of Intel flash memory, keyboard, embedded wireless modem, integrated organizer, and full support for the BlackBerry wireless e-mail solution. RIM also upgraded the BlackBerry 950, giving it four MB of memory, and introduced version 2.0 of its BlackBerry software to support both the 950 and the 957. By mid-2000 RIM's BlackBerry service was hosted by numerous ISPs. The company had just signed a partnership agreement with America Online (AOL) to provide AOL Mail and AOL Instant Messenger service through RIM handheld devices. While Palm, Inc.'s line of PDAs held the largest market share, RIM was doing well serving the niche market of professionals who required mobile access to businessrelated e-mail. RIM had about 200,000 BlackBerry units in use, with about 50,000 of them at

corporations. Other competitors included Motorola and OmniSky, and in the second half of 2000 Handspring Inc., a new company formed by Palm founder Jeff Hawkins. By the end of 2000 RIM had released the AOL Mobile Communicator as part of its agreement with AOL. In other developments the company teamed with Certicom to provide secure transactions over its handheld devices, and it reached a new agreement with BellSouth Wireless Data to supply the company with 150,000 wireless handheld devices. BellSouth also agreed to offer the BlackBerry wireless e-mail solution to its corporate clients. In another development RIM licensed CDMA (code division multiple access) technology and patents from Qualcomm Inc., which allowed the company to expand its customer base to include wireless users on CDMA cellular and PCS networks. In November 2000 Lazardis committed C$100 million to fund the Perimeter Institute for Theoretical Physics in Waterloo, Ontario, starting with a C$20 million donation. It was the largest philanthropic gift in Canadian history. Expansion of BlackBerry Service: 2001 In 2001 BlackBerry wireless e-mail service became more widely available in Europe. In April the British wireless service, BT Cellnet, committed to purchasing 175,000 wireless handheld devices and related software from RIM. Other agreements were signed with Esat Digifone in Ireland and Telfort Mobiel in the Netherlands to offer BlackBerry service. RIM also expanded in the United States through agreements with companies such as IBM, which agreed to issue about 6,500 BlackBerry devices to its field-support staff and market the service to its customers. Vaultus, a wireless solution provider, agreed to supply at least 50,000 BlackBerry devices to its Global 1000 corporate customers over the next two years. Throughout 2001 RIM added enhancements to its products. In January it introduced the BlackBerry Enterprise Edition server for Lotus Notes and Domino. Previously, the BlackBerry system worked only with Microsoft Exchange servers, which had about 58 million users. Lotus Notes and Domino servers had about 65 million users. In March RIM introduced the BlackBerry Enterprise Server 2.1 at the CTIA Wireless 2001 trade show in Las Vegas. The new version enabled web access for BlackBerrys for the first time and also allowed users to send updated calendar information to and from their central system. At the same time the company announced an alliance with GoAmerica Communications Corp. that allowed wireless downloads. These enhancements moved RIM's BlackBerry service significantly beyond wireless e-mail. For 2001, RIM's revenue more than doubled to US$221.3 million. However, increased operating expenses resulted in a net operating loss of US$4.7 million. The company's overall net loss was US$7.6 million. For the year RIM reported it had nearly 164,000 BlackBerry subscribers in 7,800 companies. By the end of 2001 there were more than 12,000 organizations in North America using BlackBerry, according to Wireless Cellular magazine. In the enterprise market, RIM signed an agreement with software developer SAP AG to provide wireless access to its enterprise resource planning (ERP) applications. In October PeopleSoft became the first enterprise applications vendor to offer a secure wireless e-mail solution using BlackBerry in the European market. Following the terrorist attacks on Washington, D.C., and New York City on September 11, 2001, BlackBerrys were handed out to all 435 members of the U.S. House of Representatives as a security measure. BlackBerrys were also cited as providing much needed communications during the crisis, and in January 2002 it was reported that police officers at Boston's Logan Airport were now equipped with BlackBerrys. By the beginning of 2002 RIM could boast that it had 250,000 BlackBerry subscribers among more than 12,000 companies.

Expanding Options, Entering New Markets: 2002-03 RIM's new BlackBerry with phone service and always-on e-mail connectivity was introduced in March 2002. The BlackBerry 5810 could be purchased through network carriers, including AT&T Wireless, Voice Stream, and Cingular Wireless in the United States and Rogers Wireless and Microcell Telecommunications in Canada. Pricing was determined by the carriers, with VoiceStream offering the 5810 for $499 plus a monthly fee of $39.99 for the data package, which included one MB of web downloads. Voice service required a separate account. A similar device, the BlackBerry 5820, was being shipped to the European market. Around this time competitor Handspring launched its all-in-one communication device, the Treo. RIM's expansion into European markets proceeded in 2002. In April the U.K. mobile operator Vodafone agreed to market BlackBerry wireless devices that operated over its GPRS network in the United Kingdom. In mid-2002 BlackBerry service was launched to corporate customers in Germany through an agreement with Deutsche Telekom, which had recently acquired U.S. wireless operator VoiceStream. Around this time BlackBerry service was also launched in France through an agreement with Vivendi Universal's mobile subsidiary SFR, which operated a GPRS network, and in Italy through Telecom Italia Mobile. In January 2003 BlackBerry service was introduced in Spain through an agreement with Telefnica Mviles S.A. and in Switzerland through an agreement with Swisscom Mobile. In July 2002 InfoWorld magazine announced the results of its Readers' Choice Awards. RIM's BlackBerry won four separate awards, including Product of the Year and Best Handheld for the BlackBerry 957 and Gadget of the Year and Best Wireless Product for the BlackBerry 5810. PC Magazine gave the BlackBerry 957 its Editor's Choice Award for 2002. In another development RIM obtained a contract with the National Security Agency to provide it with customized BlackBerry devices that met the stringent security standards of governmental organizations. RIM continued to add new product features, introduce new models, and partner with technology providers throughout 2002 and 2003. An agreement with BEA Systems Inc. called for the development of a framework to build web-based applications and services for BlackBerry devices. New software developed by Onset Technology Inc. enabled BlackBerry users to go to a specific web page or do a Google search without launching a browser. The software, called MetaMessage 4.0, also added network printing capabilities to the fax printing capabilities of earlier versions. Applications from providers such as Arizan Corp., Good Technology Inc., and Onset Technology enabled BlackBerry users to view e-mail attachments. An enterprise solution that made it easy to print from BlackBerry devices was developed in conjunction with Hewlett-Packard and Adobe Systems. Financially, 2002 was a difficult year for RIM. For the fiscal year ending March 2, RIM reported revenue of US$294.1 million, a 33 percent increase over the previous year. However, the company reported its second consecutive operating loss, which increased from $4.7 million to $58.7 million. Overall, RIM's net loss was $28.3 million. At the beginning of fiscal 2003 RIM reduced its earnings estimates for the coming year, citing delays in carriers rolling out GPRS launches of their BlackBerry services. In November 2002 the company announced it would lay off about 10 percent of its workforce. Nevertheless, RIM CEO Jim Balsillie foresaw rising demand for wireless devices, and the company continued to announce new and enhanced wireless devices and services.

Evolution of the BlackBerry : 2002-10

BlackBerry 850 was the first BlackBerry device introduced in 1999. Supporting email and limited HTML browsing, the small device featured a monochrome screen.

The BlackBerry 857 came with a larger monochrome screen

The BlackBerry 5810 was the first model with phone capabilities but a headset was required.

The BlackBerry 6200 featured a medium 160100 pixel monochrome screen and phone.

BlackBerry 6510 came with an integrated phone and integrated two-way radio.

The BlackBerry 6710 had a large monochrome screen, 900/1900 MHz GSM/GPRS integrated phone.

The BlackBerry 7210 was the first one to come with a color screen.

The BlackBerry 7100t introduced a reduced-key keyboard and uses a technology called SureType.

The BlackBerry 8700 featuring a large 320240 pixel screen and 65K colour depth.

The BlackBerry 8100 marked the introduction of a new trackball interface and a 1.3 MP camera.

The BlackBerry 8800 with GPS support.

And the latest BlackBerry 8320 featuring Wifi.

Need for a new strategy:

Very small share of the overall market:

Worldwide Smartphone Sales to End Users by Operating System in 2009

(Thousands of Units) 2009 Market Share 46.9% 19.9% 14.4% 8.7% 4.7% 3.9% 0.7% 0.6% 100% 2008 Market Share 52.4% 16.6% 8.2% 11.8% 7.6% 0.5% NA 2.9% 100%

Company

2009 Units 80,878.6 34,346.6 24,889.8 15,027.6 8,126.5 6,798.4 1,193.2 1,112.4 172,373.1

2008 Units 72,933.5 23,149.0 11,417.5 16,498.1 10,622.4 640.5 NA 4,026.9 139,287.9

Symbian Research In Motion iPhone OS Microsoft Windows Mobile Linux Android WebOS Other OSs Total

Source: Gartner (February 2010)

The sales for the year 2009 clearly shows that RIM only has a small share of the market pie as compared to the top selling Symbian phones. Also compared to sales for 2008, 2009 saw an increase of 3.3% for RIM whereas the same year saw an increase of 6.2% for iPhone OS.

Lesser satisfaction among existing users:

A study on www.mikemace.com analysed the existing smartphone users to predict which product would see the highest number of people switching to competitors offerings. BlackBerry showed an alarming 53% of users who would move to another phone soon. This was worse, when compared to iPhone which showed only a 20% user base wanting to shift to another phone.

In a similar survey by J.D. Power and Associates, Apple ranked highest in customer satisfaction among manufacturers of smartphones. Apple definitively lead smartphone providers in customer satisfaction with an overall satisfaction rating of 810 on a 1,000-point scale. No other manufacturer scored above the industry average of 753 and only Apple received JD Powers highest Among the Best Power Circle rating. Apple performed particularly well with consumers in the areas of ease of operation, operating system, features and physical design.

Apple poised to overtake RIM according to experts:

Sales of the iPhone will eventually outpace BlackBerry sales for the following reasons: 1. Apples ecosystem of consumer products (Macs, iPad, Apple TV) and services (iTunes, iPhone apps) make the iPhone a more attractive phone for many consumers compared to the BlackBerry.

2. End of AT&T exclusivity will give Apples iPhone wider distribution in the US (comparable to BlackBerry distribution). 3. iPhone is making inroads with business customers that have traditionally preferred the BlackBerry.

Tough battle ahead with competitors:

iOS: iOS, introduced by Apple, is one of the most praised operating systems in the Consumer-focused
smart phones market. Being associated with the brand name of iTunes AppStore gives an edge to iOS in creating a large customer base and thus, increase its visibility in the market.

Android: Google is planning to launch a tablet version of Android in the near future. Although
Android is not scheduled to be launched with larger screens and higher screen resolution on tablets in near future, Google has started working on tablet-optimized version of Android. The Android OS consists of an impressive list of mobile applications but has not rolled out an integrated distribution and payment platform for apps and media.

MeeGo: Intel and Nokia have entered into a joint venture wherein both the organizations will harness their competencies. Intel wishes its chips in the tablets and Nokia wants a platform for high-end devices. If things fall into perspective, MeeGo would help Nokias plan to enter the U.S. Smartphone market early next year. webOS: HP owns Palm and thus, their webOS. WebOS can be considered as one of the major
competitors of BlackBerry PlayBook and has the potential to threaten the position of BlackBerry PlayBook in the market. HP having sufficient resources to market webOS can give a tough competition to iPad and BlackBerry.

Windows: When we talk about technology, the very first name that comes to our mind is Microsoft. Although Microsoft did not show much interest in the mobile market earlier, they have rectified their mistake with the decision to launch a completely improvised Windows 7 platform. It is very difficult to gauge the outcome of Windows Phone 7 in the market, as WP7 isnt free and that might have an effect on its acceptance in the market.

Winds of Change: The Repositioning Strategy

As of the fourth quarter of 2009, only 21 percent of American wireless subscribers were using a smartphone, compared with 14 percent at the end of 2008, according to data from Nielsen. This means that almost 80 percent of the market has not yet upgraded to a smartphone. There are indications that the growth in smartphone use will grow rapidly over the coming months. According to a Nielsen survey, 45 percent of respondents said the next phone they'd buy would be a smartphone.

http://news.cnet.com/8301-30686_3-20004753-266.html#ixzz18Xys69zw
RIM also finally woke up to the potential market offered by the lower-end segments and the youth market which was untapped till now. In a move aimed at attracting this segment, RIM changed its communication strategy, pricing strategy and came out with new models aimed at this particular segment. Even the models were being named in a way, so as to attract the youth.

Communication Strategy: The previous campaigns always positioned BlackBerry as an office and a business mobile. But gradually, the campaigns started getting more zingy, more youth-aimed and the device was now being portrayed as a feature phone and a lifestyle phone. Some examples of the above shifting communication strategy are : 1) The print campaign. Some of the old print ads looked like these:

The above ad is all about the office team and bosses.

The above ad is again all about business. And the print ads of today look something like these:

Now this ad talks about life on a BlackBerry.

This ad again focusses on the different features offered. Notice the icons on the right for wi-fi, Bluetooth, music, chat etc. Also notice, the colours and the overall look of the print ad.

2) The BlackBerry website. The BlackBerry homepage has constantly evolved as per its changing strategy. Its older versions are evident of its focus on Businesses and the newer versions have gradually been directed at the youth and at the individual users. 2002 :

Corporate market centric, reflecting branding of its time.

2006 :

Individuals become very important to Blackberrys market 2009 :

Important shift in strategy, making Blackberry a end-user focused brand competing with Apple/Google. 2010 :

Blackberry is all about the user, highly social via integration with social media tools.

3) The video ads.

Pricing strategy for new models: New models with some general features and lower costs were introduced to attract the teenage buyer. Even the models were named specifically with the teenage buyer in mind. A few of such launches : Blackberry Curve 8520 :

This comes with a music player and Java-enabled for games with a price tag of just Rs.12,490.

BlackBerry Pearl 9100 :

This comes with a higher resolution camera of 3.2 MP and 2 GB media card and priced at Rs.19,990.

BlackBerry Bold 9700 :

A high resolution display, higher battery life which provides 38h of music playback this model comes at Rs.26,990.

BlackBerry Torch 9800 :

5 MP camera, Touch Screen and integrated hands-free speaker phone all bundled into BlackBerry Torch 9800 at Rs.34,990. The above varied models and varied pricing is evident of RIMs strategy to position BlackBerry as a smartphone which can be used by both the high-end business consumer as well as the low-end teenage segment. Model names such as Curve, Pearl, Bold again aim at capturing the attention of the teenage buyer.

Risks to Repositioning :

Losing the loyalty of existing customer base: This is transcendently important to a platform company. As the market matures, more and more of the sales come from replacement devices sold to the installed base. If the business can keep these people happy, it will have a steady stream of replacement sales that it can build on. It won't be enough to produce the growth that the investors want, but it'll be a great foundation. On the other hand, if these customers and developers drift away, there's virtually no way the business can grow something else fast enough to offset the loss. The trick here is that the supporter base for a computing platform is like a herd of cattle. They move as a group. When the herd is contented, it tends to stay in one place. But if the herd gets restless, even a small disturbance can cause a stampede in which they all run away at once.

Losing Brand Identity: When BlackBerry was launched, it was positioned as an elite mobile phone for the businesses. It meant serious business to own a BlackBerry. It stood synonymous with class, high pricing and a mobile phone to be owned by CEOs. The repositioning of this brand, now, does threaten the brands much earned identity. Already Nokia and Sony Ericsson have captured the teenage market and they are the young and fun brands. It is highly risky to position the brand simultaneously in such contrasting identities. This is one big challenge BlackBerry will face, to not lose its existing brand identity as well as to carve a new identity for itself. Getting caught in price wars with Nokia and cheaper versions: If BlackBerry now wants to focus on the teenage buyer, it will have to compete with the dominant Nokia brand and also cheaper smartphone brands like MicroMax. This might drag it into a price war with these brands which would inevitably mean lower profits and margins. Losing the innovative image: BlackBerry, when launched was seen as a breakthrough in mobile email access. But gradually the later versions of BlackBerry were just some variants of a combination of existing features and at different prices. Hence the repositioning strategy can be again seen as a last resort, a message that the company has lost the innovative streak and now just coming up with scaled-down versions of its existing products.

Recommendations

Focus on R&D:

RIM has always fallen behind Apple in terms of R&D spending and innovation. If it has to compete with Apple in the smartphone market, it needs to focus more on R&D and try to come up with path-breaking features. More advanced business applications: RIM need a product vision identifying a few new differentiators for BlackBerry that will resonate well with the busy knowledge workers who are at the core of its installed base. There should be no more than three of these features (because customers can't remember more than three), and they should not be copies of things that Apple is already implementing. RIM should focus on building them deeply into the product, so they are very well integrated with the rest of the device. The most awaited business applications are meeting planning, conferencing, and live document sharing.

Effective communication strategy: RIM is focusing too aggressively on attracting the teenage buyer. It should balance its communication strategies to be known as the original business mobile as well as a competent teenage smartphone. It already has different models in its kitty. So the campaigns should be model-specific and targeted at the particular segments. For instance, it can carry campaigns which show BlackBerry Curve as a teenage phone and at the same time it should carry campaigns which show BlackBerry Torch as a high-end business mobile.