The Evolution of Blackberry

Final Report For Marketing 3300.501.13S

March 7, 2013

Chelsea Alexander David Do Jennifer James

Contents
1. Executive Summary 2. Background (David) 3. Situation Analysis (Chelsea)/ (Jennifer) 4. Possible Actions/Recommendations and Opinions (Everyone) 5. Conclusion 6. Sources

Executive Summary
-Blackberry RIM- (Research in Motion) RIM designed the very first smart-phones made to target ONLY business people. Since the beginning of this technology, these smart phones featured one of the most exclusive applications; "the enterprise activation" which in other terms is simply a connection to a special server for a specific company. This created the ability to communicate in a more efficient way throughout coded messages. Blackberry's Messenger application provides one of the most private ways to communicate because the text sent through it becomes a code chain (protected) rather than like a "SMS"(short message service) which is open, and traceable. Currently RIM is facing hardships, as the software lacks innovative features that are being seen in other devices. These devices have now integrated other mediums of communication through applications that work similarly to the "BBM". The lack of software updates, the poor level of actual useful applications available for download from the "Blackberry world"(version of appstore from apple, but for "Blackberry") have been greatly hindering their pursuance of being number one. Blackberry has been slowly dragged out of the circle of the top leaders of smart phones; however a few weeks ago they released new software called Blackberry 10. Its intent is to regain Blackberry's old customers loyalty, but at the same time new devices are coming out from competitors. One of their biggest strengths is that Blackberry's offer several devices the option to choose between technologies. GSM (Global System for Mobile comm.) which is the network

that AT&T, and T-Mobile uses where you see a "sim card" below the battery of your phone. The other is CDMA (Code Division Multiple Access), which is what Verizon and Metro uses, as this type of network doesnt need a sim card to work, because its an ANALOG network. Either way, some Blackberry's will let you pick which network you want to use, which translated in other terms its an advantage over any other cell phones. Why? This is why Blackberry's are super useful; Blackberry builds devices that are capable of handling both technologies and also handle several bandwidths through the world. So, connectivity its biggest advantage, as it will let you use the carrier from any country and work just like at home. This is also why Blackberry stands a chance in this market and could possibly come back to be a major competitor in the market with a few strong strategies to get them there.

Background
1. History of RIM a. Founded by Mike Lazaridis as Co-CEO alongside Jim Balsillie in 1984 until January 22, 2012. i. The current CEO of Blackberry (RIM) is Throsten Heins b. Canadian Telecommunication and wireless equipment company i. Headquarters is in Waterloo, Ontario Canada. c. Worked with RAM Mobile Data and Ericsson Company. i. Ericsson had developed the Mobitex wireless network for paging and email services. 2. BlackBerry Products a. In 1999 RIM introduced its Blackberry 850 Pager. i. Called a blackberry due to its keys resembling blackberry shapes. b. Blackberry catered to Business corporations and government industries i. Blackberry held high encryption networks ii. Perfect for sensitive information between employees and was safe. iii. Used the push email system from Microsoft by using the Blackberry Enterprise Server (BES) c. RIM introduced the Blackberry Pearl 8100 i. Had Multimedia and camera

ii. It was a successful phone iii. Lacked touchscreen and entertainment apps like the Iphone. d. Release of the Blackberry Storm in 2008 i. Failure e. Although the BB Storm was unsuccessful i. BB still owned 10.4% of the smartphone OS on the market in May 2010. ii. Steep stock drop for RIM in Aug 2008 f. In September 27th 2010, RIM announced the release of the BB Playbook Tablet Computer. i. Release date was set for April 2011. ii. Failure 1. Lack of apps and function similar to Apple Ipad and Android based Tablets. 3. RIMs Downfall a. Oct 2011 RIM encountered service outages. i. Backup core switch did not work. ii. Gave $100 package of free premium apps as incentive. b. Dec 2011 RIM shares dropped. i. 80% drop since January 2008. ii. Lowest price c. Jan 22 2012 CEOs Mike Lazaridis and Jim Balsillie stepped down, and replaced by Thorsten Heins d. March 2012 i. Shares were worth < $14 from $140 in 2008. ii. Loss favor of most consumers but kept relations with corporate businesses and government agencies. 1. BB devices had outdated technology 2. Still used Java based OS where other companies moved onto better OSs 3. RIM planned to develop a new OS from scratch (OS QNX) as new core. iii. New CEO Heins (blackberry business changes) 1. Doubled efforts to push the BB10 a. Rejected Windows integration with Microsoft b. Went against Googles Android OS iv. Shipped out 11.1 Mill phones 1. 21% drop in the previous quarter (Q4 2011) 2. Net loss of 125 Million 3. Biggest Market share loser of 2011 due to Googles Android OS. e. June 2012 i. Net loss of 518million ii. July = 7.09/share 4. RIMs Re-Entrance a. Jan 2013 b. BlackBerry 10 Launch i. Had 70K apps made for the new phone

ii. Estimated to have over 100K apps by March 2013 during its launch. c. New BB10 Look i. Also new rebranding for RIM ii. Changed from RIM to BLACKBERRY iii. TSX NASDAQ to BB/BBRY Feb 4th 2013 d. Announced and debut during Super Bowl XLVII e. BlackBerry 10-- Z10/Q10 i. New OS ii. Smart Intelligent Camera iii. Perfect Shot feature iv. Adaptive and predictive keyboard v. New Interface with a Flow theme vi. Over 100K apps vii. 2 Versions for Business and Home Use

Situational Analysis
Strengths In the past, Blackberry made a name for themselves as a professional phone, which gives their brand familiarity with the corporate consumer Blackberry has diversified by touching the world. Apple has taken over the U.S., but Blackberry is still widely known overseas Weaknesses They are behind apple and the android phones, because they havent done applications first or found something to differentiate in a positive way Not efficient for social media, and the common consumer

Opportunities They still have loyal customers, or people who would like to see Blackberry come back. (They need to tap into their interests to find a way to impress old customers and win new) Threats Other companies that have the same target market, and have the customer loyalty. There are many other markets that they could gain with new technologies and strategies

Quick release of new applications from other companies

Possible Actions/ Recommendations and Opinions

What went wrong? They have kept a strong focus on consumers in business, when they should have differentiated and pursued styles that would be efficient for social media as well as visually appealing to the common consumer. Their focus on business efficiency has left little room for fun applications and games that are becoming more and more a way into the game, rather than a game changer.

What did they do right? Blackberry was the first smart phone, so they jumpstarted the technology and got their name in the market first. Their past success has labeled them in the mind of the generations that were using them then, but have left them lacking for the generations that are just now coming into the technology. Their Blackberry world was before the Apple store, buy Apple has somehow passed them by. Blackberry has fallen behind in staying ahead and now seems to be maintaining itself.

Factors that have lead to their success?

Blackberry not only produced the very first smartphone, but they also created a brand name that customers were able to continually rely on. They were able to build an extremely loyal customer base, which lead to their great success.

Factors that have lead to their failure? Blackberry was extremely successful after producing the first smartphone, however they failed to continue to develop and expand their idea further, which allowed other companies to enter the market. Blackberry also failed to expand their target market and only focused on the business consumer, while they should have broadened their target market to general users.

How can they improve? Blackberry could improve by diversifying their target market. Aiming for the younger upcoming generations with a phone would get their brand heard as long as they incorporated something new and innovative. Their competitors are competing with brands that are over multiple products, and so Blackberry must become the top in one area, or diversify with multiple products to beat out other brands. Also, Blackberry doesnt have advertising and promotions that the common consumer sees very easily. This year Blackberry had their first Super Bowl commercial ever, and that must have helped their visibility. Advertising can also include creating more visible service with a more interactive Blackberry world that compares to the Apple Store, or their own physical store.

Conclusions

Sources

Lyons, Dan. "R.I.P. Rim?" Newsweek 6 Feb. 2012: 14. Health Reference Center Academic. Web. 20 Feb. 2013.

Molina, Brett. "The Evolution of the BlackBerry." USATODAY.com Interactive. USA TODAY, n.d. Web. 20 Feb. 2013.