Blackberrys Rise in Brand Power The Dueling Marketing Strategies of RIM versus Apple

TEAM ZEBRA
Lavreet Randhawa Echo Lin Thach Duong Dustin Korotana Natasha Colusso Marco DallAntonia

SET FMGT 1A MKTG 1102 Jeff Collier October 19, 2009

Introduction RIM and Apple are the two dominant companies in Branding for their market place. RIM currently dominates the corporate side of business professionals. Apple is currently dominating consumer markets with their new innovative Iphone. Problem How will Blackberry successfully dominate the market place and the target markets against Apple? How can Blackberry gain a leadership position in the mobile phone sector? As well as, how can Blackberry grow its sales and market share? Key Findings Blackberry: Founded in 1984 Headquarters located in waterloo, Ontario Controls over 55% of the US Smartphone market Global market share was at 16% for 2008. The Blackberries have grown market share to 19% in the first half of 2009. Revenue rose to $3.53 billion from $2.58 billion a year earlier. Sales are up about 40 percent compared to a year ago. Is expanding its product portfolio to include a wide selection of devices and interfaces that appeal to a range of customers at different price points. This includes 2.5G models that are smaller, lighter, lower cost, and have better battery life than other 3G models. Apple: Founded in 1976 Headquarters located in Cupertino, California Controls 23.3% of US Smartphone market Global market share was 7% for 2008. Apples market share has grown to 13% in the first half of 2009 Sales of 5.4 million units in the second quarter of 2009 Hoping to have iPhone in China within one year In General: Smartphones offer the biggest opportunity for manufacturers. It is the fastest-growing market segment and the most resistant to declining ASPs U.S. Smartphone sales grew 47% in Q2 Physical, rather that touch screen, keyboards shipped on 35 percent of handsets sold in the quarter Smartphone sales surpassed 40 million units worldwide in the second quarter, a 27 percent increase from the same period last year.

Assumptions Blackberry has the necessary financial capital or the revenues by which to secure them and to sustain investment to grow the business in all possible ways. SWOT Analysis Blackberry Swot Analysis: Strengths: Brand image- Blackberry has one of the best Images for mobile phones in the market today. Its diverse business has a variety of products for its wide range of consumers Innovative Product- the Blackberrys software is well designed. The phone is highly secure and it integrates well with other platforms. It works well with several carriers and it can be deployed globally. The phone is very easy to manage and it has a longer than usual battery life. Product Features- the Blackberry has a small form-factor with an easy-to-use keyboard. The company holds patents for the thumbwheel and QWERTY keyboard found on the device. It also has a speedy mobile e-mail provider and the Blackberry has coverage in many major countries. The Blackberry does very well in managing e-mail in a mobile environment. The global usage of the Blackberry is one of its best known assets. Weaknesses: Global Coverage Dependence- Rims business model (selling purely through operators) means it is dependent on its operators when it comes to launch Blackberrys services. This takes a lot of time and the cost of launching this can be high for small time operators Cost of Ownership- the Blackberry has a high total cost of ownership. Blackberry is known as a high-end product that is very costly for enterprises that want to provide email across large organizations. Their competitors have marketed a cheaper price compared to Blackberry Blackberry Features- When it comes to critical applications, the Blackberry struggles. It does not have a very large storage of third-party software. When it comes to most people, its main feature is the e-mail utility. Opportunities: Variety of Offerings for Mobile Workers- Growing consumers will need to be satisfied and Blackberry will be there in the future to satisfy them. They will look to expand email globally across a diverse market and use it in the workforce. People understand the value of this but are not willing to pay a premium. Extends The Range Of Third-Party Blackberry Devices- When Blackberry licenses its software through Blackberry connect and Blackberry programs, Blackberry is able to grow dominance against other users who prefer Blackberrys platforms. Its easily addressable in global markets and features certain products in markets worldwide.

Threats: Competition- Blackberry is facing tougher competition more than ever before. The iPhone being one of the dominant phones in the market. There are a range of suppliers worldwide that compete with Blackberry every day. Blackberry also competes with its operators; many of them have launched their own branded e-mail service. Many people consider other mobile products alternatives and people will use these products as a substitute which Blackberry must compete with. iPhone Swot Analysis: Strengths: Innovative product- The touch screen is patented and very unique compared to all other mobile products. It also has features from all other mobile products combined into the iPhone. Compatible- The phone is very compatible and versatile and is able to work well with other parent products of Apple such as the iTunes and the Mac Computer and the Mac T. It is also compatible with many other software products and there is no limit into how far the upgrading can go. The new features that are compatible with Apple are limitless. Easy To Use- The brand new innovative touch is state of the art technology that is very easy to use. The touch features on the iPhone is different than other touch products and is an upgrade compared to other products. Brand Image- Apple is a well known brand and is known for its other innovative products such as the iPod and the Mac Computer. Good Price- for $350 it has all of the combined smart phones into the iPhone plus it has all the latest features and is more easy and accessible than other smart phones out there. It is a good value for the current price they are offering. Weaknesses: Corporate Brand Image- The apple brand is not as receptive towards business people. It does not have a strong reputation such as the BlackBerry does. Price Variety- The iPhone only has one set price and does not vary for other consumers in the market Using Touch Features- Long usage of the iPhone has known to have caused gorilla arm which results in uncomfortable mobility while using the iPhone Opportunities:

Increase in Demand and Expansion into New Target Segment- Apple will continue to target various markets that enjoy the use of an all in one easy accessible phone. As time passes, Apple will convert the iPod consumers into upgrading into the iPhone Upgrading- New innovative technology can always be added to the software and the new features will continue to update into the latest technology. New features will also be upgradeable and the cycle will continue Partnership- Apple can combine with other mobile phone companies and flood the market with iPhones. This will reduce the costs of marketing and will increase revenue with the company. Threats: Competition- Increased competition continues to flood the market. The amount of smart phones on the market is higher because they are easier to make than they ever were before. More companies are entering into the market and are working around the patents that Apple currently has. Difficulty Expanding into Asian Market- There is not much interest for iPhones in the Asian market. Many smart phones are already used and prefer other products instead. Competitive Analysis RIM has a strong customer base from professionals, whereas Apple attracts many average users. RIM has a good reputation in the smart phone business. Apple is new to the smart phone business, but with its strong electronic history and reputation, its sales and market share of the smart phone business are growing rapidly. Apple tends to target its phones to people who seek for media. Also, Apple has stronger foundation and capital to support its after-sale services. The prices for the new Blackberry and new iPhones are very close, but Apple is willing to drop iPhones price in order to increase its sale and market domination. If RIM follows, its profit will reduce, and it does not have as many other products as Apple to compensate the loss of profit. Target Market BLACKBERRY Business people o Email o Microsoft office o Higher business persons price Students o Web browsing and Facebook application o Blackberry messenger o More functionalities of a regular phone than originally o App world can download games Currently available with almost any phone carrier

Becoming more consumer based than just consumer based with style and function IPHONE Students o Email is helpful, but they also like phone & music in one device o Teenagers want newest & coolest. Video Game players o Applications of video games on the go Apple brand loyal customers Not as much targeted for business professionals o No office options o Cannot download third party programs Rogers & Fido customers Mostly consumer based as shown by looks, available application and marketing/advertising RECOMMENDATIONS Alternative 1 Product development strategy Improve RIMs App world Though Research in Motion's BlackBerry also run apps (including some of the same ones as for the iPhone), BlackBerry's App World offers only a little better than 2,000 apps. Apple's App Store boasts more than 65,000. This strategy will focus on developing all sorts of apps for the Blackberry to compete better with the iTunes Store, such as games, entertainment and those that enhanced business-travel productivity. Advantages Deftly morph from a business-focused handset to a more consumer-friendly device. Attract more entertainment-focused users opportunity to market App World as a high-end retail for on-the-go users allowing the company to polish its image as it creates a lucrative new revenue stream with premium mobile applications. Able to compete with iTunes Store in the market segment of hip consumers

Disadvantages Long term investment Risk of capital Repositioning failure

Alternative 2 Market development strategy develop the non-North American markets with a focus on European and Asian nations.

RIM sold 7.8 million BlackBerrys during its fiscal fourth quarter, which ended Feb. 28, 2009. Apple sold 7.4 million iPhones, up 7 percent in its fourth quarter ended September 26, 2009. Widespread availability of the Curve in the US helped its market share jump a yearly 15 percent more; in comparison to the 10 percent drop in US market share of the iPhone. Rim is taking back the smart phone market from Apple. But Apples CFO Peter Oppenheimer told investors that the company intends to sell the iPhone to Chinese consumers as part of its global rollout plan. In Canada Rogers Communication Inc. is currently the only mobile company that is offering the iPhone. Apple intends to bring the phone to both Bell Canada Inc. and TELUS Corp. to help boost revenues. The top 10 devices for January were: 1. BlackBerry Curve 2. Apple iPhone 3. BlackBerry Storm 4. LG Voyager 5. LG Dare 6. BlackBerry Bold 7. Samsung Rant 8. Samsung Behold 9. Samsung Instinct 10. LG Env2 We believe if RIM wants to continue its dominance in the market it needs to market its devices more over in Asia and Europe. Companies such as Nokia and Samsung largely dominate the European and Asian Markets. RIM should follow Apples footsteps and hit the Chinese consumers. As well and work on Research and Development to make the smart phone more adaptable for European and Asian markets. The devices are increasingly being used in developing nations as substitutes for home computers and Internet connections. One hot market for BlackBerry is Indonesia. This strategy will focus on developing RIMs Smartphone to grow the market share of other countries, such as Indonesia and China. Advantages Make RIM become a more globally known brand. Large potential market

Disadvantages The company must deal with differences in government regulations, cultural traditions, supply chain considerations, and language. Require a large amount of money and time investment. Competition from Smartphone manufacturers within the countries

Alternative 3 Cooperate with competitor.

Form a partnership with Nokia, the best selling phone company in the world, to get a win-win strategy for both companies. If it is successful, RIM will have lesser competitors in the field and more resources and technology support by Nokia. Advantages Lesser competitors in the phone industry Combine Nokias media technology with RIMs business technology into one to reduce the cost of products development Lesser risk of repositioning failure RIM can benefits the current market share that Nokia has in other country to reduce the risk and cost of market development Disadvantages Higher risk to be taken over by Nokia Private information and technology will be disclosed to Nokia RIM will be no longer a unique brand Policies, strategies, and other activities need to be agreed by both companies. Solution Alternative 2, the marketing development strategy plan. This alternative would be the best plan because RIM would get more international popularity and exposure, and would have potential for growth. In addition, it is the most cost effective and the most direct approach. Blackberry already holds the highest market share for smart phones, and in order to continue to hold it, they should further enter and expand on the market that Apple holds, which is more consumer, based. Implementation Plan Branding is the first steps. RIM need to position itself as the leading smart phones for professionals in other countries such as China, India and Indonesia by investing in advertisements. The second step is to make negotiations with major phone services provider in other countries, so they will help RIM to promote their phones. The third step is to get better operational excellence. Operational excellence helps RIM to reduce the cost of the long supply chain, so RIM can reduce its selling price to meet the living standard in other countries. The lower the price of RIM phones, the more they will sell and the more market dominance they will have. Plan B Improve RIMs App world This strategy aims to make Blackberry a more consumer-friendly device, and to attract more entertainment-focused uses. This strategy enables RIM to compete with iTunes Store in the market segment of hip consumers, so that to expand its target market. Course Concepts SWOT Analysis

We use this method to analyze the strengths, weaknesses, opportunities and threats of both iPhone and Blackberry. Market Development Strategy employs the existing marketing offering to reach new market segments, whether domestic or international. This concept we use it in the second alternative of recommendations to market Blackberry to other countries Product Development Strategy offers a new product or service to a firms current target market We use this strategy as our first alternative to develop the app world to target more entertainmentfocused users. References SWOT ANALYSIS : SOURCE FOR IPHONE ANALYSIS http://74.125.155.132/search?q=cache:bf18amFazgYJ:www.iphonefans.com/general-iphonediscussion/268-iphone-marketing-plan.html+Apple+Iphone+swot+analysis&cd=2&hl=en&ct=clnk SWOT ANALYSIS : SOURCE FOR BLACKBERRY ANALYSIS http://docs.google.com/gview?a=v&q=cache:a_IlfyzYpEcJ:www.blackberry.com/select/get_the_facts/pd fs/vendor/OVUM_RIM_in_the_mobile_enterprise_market.pdf+rim+swot+analysis&hl=en&gl=ca&sig=AF QjCNHf3uyVoExOx8aWd4T4zEh1gJLxaQ http://74.125.155.132/search?q=cache:6LBe18UDdAwJ:mobileanalystwatch.blogspot.com/2006/05/mo bile-platforms-blackberry-mobile-e_26.html+Blackberry+strengths&cd=1&hl=en&ct=clnk&gl=ca http://en.wikipedia.org/wiki/Research_In_Motion http://mobilitytoday.com/news/009444/sales_blackberry_50 http://www.apple.com/pr/library/2009/04/22results.html http://press.rim.com/release.jsp?id=1835 http://www.electronista.com/articles/09/08/18/rim.fastest.growing.firm/