Blackberry Strategy

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BlackBerry’s strategy to gain market share in the mainstream market and The use of promotions to achieve its goals

Team JMARCS
Bozak, Dasgupta, Feng, Kumar, Sharma, Tu
SET: 1G     MKTG-1102    Instructor: Don Linder     October, 22, 09

Introduction:
Research In Motion (RIM) is a leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communications market. (Reseach In Motion) RIM was founded in 1984. RIM now has offices in North America, Europe and Asia Pacific.

BlackBerry is a line of wireless handheld devices that was introduced in 1999 as a two-way pager. In 2002, BlackBerry was released, which supports push e-mail, mobile telephone, text messaging, internet faxing, web browsing and other wireless information services. It delivers information over the wireless data networks of mobile phone service companies. BlackBerry holds the world's second highest market share in the smart phone platform, capturing 21% of worldwide smart phone sales in Q2, 2009. On 30 May 2009, RIM announced the number of BlackBerry subscribers has reached approximately 28.5 million. (Wikipedia)

BlackBerry’s competitor Apple introduced the iPhone in 2007 which was named the Invention of the Year by Time Magazine. Apple iPhone is growing at a very impressive rate and with introduction of iPhone 3GS, Apple looks all set to overtake RIM by mid of 2010 and become number two player in smart phone market. Analysts were saying that RIM is unlikely to maintain its over 50% share in North America due to growing competition from Apple, Motorola, and Palm, among others. (Wikipedia)

Problem:
How does RIM gain market share in the consumer smart phone market?

Key Findings:

Consumer behaviour

• Two types of users for smart phone customers:

➢ Enterprise customers- BlackBerry was a "company decision".

➢ Non-Enterprise customers- BlackBerry was a “personal decision”.

• According to Canalys Research, touchscreens became the preferred interface, representing 40% of all shipments. Upon recognizing Apple’s success with the iPhone touch screen interface, RIM introduced its own touch screen device called BlackBerry Storm in end of 2008. (Canalys Research)

• According to Canalys Research, Smart phones have been opposing the industry norm, with shipments growing despite the global recession. (Canalys Research)

Company information

• An aggressive “buy-one-get-one” promotion by Verizon Wireless helped RIM’s BlackBerry Curve move past Apple’s iPhone to become the best-selling consumer smartphone in the U.S. in the first quarter (Q1) of 2009. (NPD Group)

• iPhone is exclusive to major carriers such as AT&T (in US), Rogers and Fido (in Canada) and O2, T-Mobile, Vodaphone (in Europe) and many smaller carriers around the world.

• Verizon and Vodafone are heavy promoters of BlackBerry.

• Palm exclusive to Sprint until 2010.

• RIM has successfully expanded its product portfolio to include a wide selection of devices and interfaces that appeal to a range of customers at different price points.

Market Share

• The battle between iPhone and BlackBerry is over the Non-Enterprise market, as the users of smartphones are increasing in this segment.

• RIM’s consumer smartphone market share increased 15 percent to nearly 50 percent of the smartphone market in US in Q1 2009 versus the prior quarter, as Apple’s and Palm’s share both declined 10 percent each. (NPD Group)

• According to NPD’s “Smartphone Market Update” report, U.S. consumer sales of smartphone handsets in first-quarter, 2009, ranked in the following order: 1. RIM BlackBerry Curve (all 83XX models); 2. Apple iPhone 3G (all models); 3. RIM BlackBerry Storm; 4. RIM BlackBerry Pearl (all models, except flip); 5. T-Mobile G1. (NPD Group)

• According to Gartner’s research, the smartphone sales grew 27 percent during the period. In...
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