Blackberry

Blackberry

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  1. THE RISE-EarlyYears at Blackberry It is evident that during the initial years RIM started off as firm with a focussed strategy, positioning Blackberry as an enterprise resource tool and targeting the corporate customers. Their novelty lied in ‘push-based’ email technology whereby subscriber would be notified on an email without having to access it. This was a breakthrough innovation and Blackberry soon became the way of doing business (Pritchard, 2006). They also gained a strong position using BBM (Blackberry Messenger) as a unique selling proposition amongst heavy text users They also made a radical change in their product design by introducing distinctive features like ‘Navigation Ball’ and the ‘QWERTY’ style of keyboard in their Blackberry Pearl range in the year 2006. Initially popular with the business community, by 2006 RIM was attracting major mass market attention. The 7100 "Charm" series marked a new focus on consumers and more features followed in the "Electron" and "Pearl" releases, including cameras, navigation, and chat features. Dubbed "CrackBerry" in the US because of its addictive nature, the BlackBerry brand was riding high and it looked like nothing could stop the keyboard revolution. By 2007, more than 1 of every 3 new smartphone purchases in the U.S. was a BlackBerry. Worldwide the company was second only to Nokia in the smartphone business, which was just gathering steam. BlackBerry’s market share would continue to grow but peaked in 2009 only to spiral downward over the next four years. 1.1 What happened? Apple The moment Apple unveiled the iPhone and declared it was taking on the mobile data market that BlackBerry had created, the Canadian company would have had to do everything right to avoid being crushed. It had little margin for error, but it made two major mistakes in the months after the iPhone was unveiled in 2007. Firstly, BlackBerry dismissed the threat of the iPhone and was unable to look past the Apple product's deficiencies to see that the Cupertino Company’s arrival would forever change the dynamic of the market it had created. And secondly, BlackBerry's competitive response, first the Bold which matched the resolution but not the screen size of apple, and then the clickable-touchscreen Storm using RIM's old operating system - showed it didn't appreciate how much Steve Jobs had redefined the smartphone business. The Storm was full of bugs and it also wasn't the right product for the emerging no-keyboard market. Its failure not only wasted time for BlackBerry, but created an opening for Google to establish Android as the rival platform to Apple's iOS. Then in April 2009, blackberry launched their own app store known as the Blackberry App World in response to Apple’s iOS and Google’s android app store. This smartphone app store opened in April 2009, nearly a year after Apple’s own store. Besides being late to the app game the store opened with just a few hundred apps. To complement the App World and shift focus from the not so effective storm, BlackBerry launched the Torch; a hybrid device with both a touchscreen and a hardware keyboard. While it offered a better experience than prior models thanks largely to better software, it wouldn’t compel current iPhone or Android device owners to make a switch. New software would be needed to rival or exceed the experiences offered on competing devices. 1.2 Strike three: QNX If the Storm and Torch were strikes one and two, BlackBerry’s entire QNX strategy would be strike three and seal the company’s fate. Knowing that its aging BlackBerry OS was beyond saving, BlackBerry bought QNX Software Solutions from Harman International in April of 2010. The idea was to integrate QNX software into BlackBerry hardware to create a more
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  compelling software experience.It was a sound idea but the implementation proved a challenge. While BlackBerry was working on QNX for its devices, it rolled out BlackBerry 7 software and new phones to run it on. This turned out to be a visible stop-gap measure because the new handsets would be incompatible with the new QNX platform. 2. Fallof blackberry(2011-2013) Blackberry had been facing a stiff competition from android and apple users since 2009. This reason had given rise to a plummeted growth in the year 2009,2010 and 2011. The revenue and sales were growing but that too at a very slow rate. But after 2011, the sales of blackberry started to decline. Let us review the revenue mix of blackberry from 2010 to 2013: 2.1 Revenue mix 2010 2011 2012 2013 Device 12116 15956 13794 6648 Service 2158 3197 4086 3910 Software 259 294 318 261 Other 420 460 237 254 Total 14953 19907 18435 11073 Now as it can be seen in the table, the company gain revenue from the following sources:  Devices  Services  Software’s  Other revenue from accessories, non-warranty repairs, BlackBerry World and gains and losses on revenue hedge contracts. So, it’s quite evident from the table that the fall of the company started from FY2011-12. The major impact was initially on the other revenue part and devices. Now since there was a fall in the revenue from devices, this led to a fall in other services because these are indirectly impacted by the sales of devices. But in FY2012-13, the revenue from the devices fell to half of what it was in 2012. Now let us go deeper in the revenue generation based on different geographies in FY2012-13 as compared to 2011-12 . 2.2 Revenue generation from different geographies Geographical area 2012-13 2011-12 Canada 661 1260 United States 2235 4182 UK 1238 1919 EU,Middle East&Africa 3264 5743 Latin America 2114 2646 Asia pacific 1561 2673 Total 11073 18423
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  2.3 Market share2013 Hence it can be seen that every other part in the world except Asia saw a huge Decrease in the revenue. The fall in revenue in Canada and US was almost 50% followed by EU,Middle East&Africa at about 40% and then the later. While the Company has as of late appreciated quick development in numerous global markets, for example, Thailand, Indonesia, Spain and others, especially in the consumer portion, the Company has seen its worldwide market share of the overall industry decrease from quite a long period while in respect to organizations, for example, Apple with its iOS community, and organizations that assemble cell phones in view of the Android biological system, for example, Samsung. In the United States, the Company has encountered a generous decrease in its biggest business market also, encountered a net abatement in its subscriber base. The major factors for the decline are as follows:  Less Application Base as compared to android and iOS.  Growing trend in Enterprises Regarding BYOD(Bring Your Own Device).  Increased desire by carriers to sell devices that operate on LTE networks. Now due to the above mentioned reasons there has been a decline in the Enterprise market of Blackberry. Apart from that, due to lack of Apps in there appstore, they are not able to capitalize on consumer markets. Samsung and apple has already gained a huge chunk of market and have capitalized on all of the reasons mentioned above. Hence, now venturing into new consumer segment and plummeting and changing needs of Enterprise environment has led to decline in the market share and subscriber base which in turn has affected the overall revenue of the company. 3. Revamping Strategies Post 2013 RIM tried to revamp itself and regain market share by the launch of their flagship product Q10. Unfortunately Q10 wasn’t a success in spite of it being a touch phone. Initially BlackBerry was positioned as a phone for the top level executive and managers. But their sales started to fall alarmingly post 2013 due to the growing popularity of android based phones and the Apple Iphone. Hence blackberry decided to re-position itself as phone for the youth and young business executives. To connect with the youth they signed Ranbir Kapoor as a brand ambassador. What BlackBerry tried to do to gain market share and increase popularity was that the tried to push its smartphone to business professionals through corporate discounts or gifts. This offer was even applicable for middle level executives. This was possible as BlackBerry had phones ranging from
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  12k-40k. A lotof promotional strategies were used along the way one of them was offering 20 times the discount the age of a women on women’s day. Offering a chance to win tickets to the Abu Dabhi grand prix on buying a new BlackBerry smart phone. BlackBerry launched its famous BBM on android and IOS to lure the youth back to BlackBerry smartphones. BlackBerry also took to youtube for the launch of their Q10 and Z10. Promotional videos were uploaded as early as 6 months before the launch of the product to create a buzz. The new blackberry inspite of having a keyboard of 35-keys and various modes of input and a longer battery life than most of the android phones and Apple’s I5 failed because of its poor pricing strategy. Q10 which was being promoted as a phone for the youth was for 44k which was very expensive. They did not have the brand proposition that came with buying an Apple or over a million free apps which one could enjoy when they bought an android platform phone. Most of the apps were to be paid for in the BlackBerry play store. When they later decided to incorporate android apps on the BlackBerry platform it lead to battery drainage and poor performance of the phones. Hence their strength of longer battery back up quickly turned into a weakness. The new segmentation was based upon the following 3 factors Occupation : The Business Executives and young professionals who look for Organizing data and doing analytics on their device as well as looking for all the other features in a smart phone. The features provided in the Q10 was easy access to sales and organizational database making desktop redundant, automatic alerts and planners to facilitate professionals. Decision making tools were also provided to capture this segment. Behaviour and lifestyle: People with innovative attitude and liking towards advanced technology became a major segment for Blackberry. These are generally high esteem extremely involved consumers who like to take charge of things. Income: As the product was a high end product they targeted individuals who had an income of over 30k a moth.
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  EXHIBIT 1: PRODUCTRANGE BlackBerry 10 Devices: Latest Models  BlackBerry Leap (2015)  BlackBerry Classic (2014)  BlackBerry Passport (2014)  BlackBerry Porsche Design P'9983 (2014)  BlackBerry Z3 (2014)  BlackBerry Z30 (2013)  BlackBerry Porsche Design P'9982 (2013) [54]  BlackBerry Q10 (2013)  BlackBerry Z10 (2013)  BlackBerry Q5 (2013) BlackBerry 7 devices:  BlackBerry Bold series (2011): BlackBerry Bold 9900/9930/9790  BlackBerry 9720 (2013)[55]  BlackBerry Porsche Design (2012): BlackBerry Porsche Design P'9981  BlackBerry Torch series (2011): BlackBerry Torch 9810  BlackBerry Torch series (2011): BlackBerry Torch 9850/9860  BlackBerry Curve series (2011): BlackBerry 9350/9360/9370/9380  BlackBerry Curve 9320/9220 (2012) BlackBerry 6 devices:  BlackBerry Torch series (2010): BlackBerry Torch 9800  BlackBerry Curve series (2010): BlackBerry Curve 9300/9330  BlackBerry Style 9670 (2010)  BlackBerry Pearl series (2010): BlackBerry Pearl 3G 9100/9105  BlackBerry Bold series (2010–2011): BlackBerry Bold 9780/9788 BlackBerry 5 devices:  BlackBerry Bold series (2008–2010): BlackBerry Bold 9000/9700/9650  BlackBerry Tour series (2009): BlackBerry Tour (9630)  BlackBerry Storm series (2009): BlackBerry Storm 2 (9520/9550)  BlackBerry Storm series (2008): BlackBerry Storm (9500/9530)  BlackBerry Curve series (2009–2010): BlackBerry Curve 8900 (8900/8910/8980)  BlackBerry Curve series (2009): BlackBerry Curve 8520/8530 Blackberry 4 devices:  BlackBerry 8800 series (2007): BlackBerry 8800/8820/8830  BlackBerry Pearl series (2006): BlackBerry Pearl 8100/8110/8120/8130  BlackBerry Pearl Flip series (2008): BlackBerry Pearl Flip 8220/8230  BlackBerry Curve series (2007): BlackBerry Curve 8300 (8300/8310/8320/8330/8350i) Earlier devices
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   First SureType phone series: 7100  First color series: 7200, 7500, 7700  Monochrome Java-based series: 5000, 6000  Early pager models: 850, 857, 950, 957 EXHIBIT 2: TIMELINE (2007-2011) January 2007 - Apple Inc's Steve Jobs unveils first iPhone, and the company launches the BlackBerry competitor in June. Time magazine honors the phone as Invention of the Year. October 2007 - RIM passes 10 million subscribers. News of a China distribution deal boosts shares, making it for a time the most valuable company in Canada by market capitalization. November 2007 - Google's open source Android platform is unveiled. It launches in October 2008. May 2008 - RIM introduces the Bold, a major redesign and still one of its top-tier products. The new model matches the resolution, but not size, of Apple's iPhone screen. July 2008 - Apple opens App Store in 22 countries and releases iPhone 3G, preloaded with App Store support. November 2008 - RIM launches BlackBerry Storm, its first touchscreen and keyboard-less device. The screen uses a tactile feedback technology known as haptics, allowing a user to click down to select actions. The model bombs. April 2009 - RIM's App World goes live. June 2009 - Apple announces and releases iPhone 3GS. June 2010 - RIM pays C$200 million for QNX Software Systems, getting an industrial- strength operating system used in massive Internet routers, nuclear power plants and car infotainment systems. In same month Apple launches iPhone 4. August 2010 - RIM launches BlackBerry Torch, a touchscreen phone with slide-out keyboard and improved web browser. Sept 27, 2010 - RIM announces the PlayBook tablet, running on a version of the QNX system. December 2010 - RIM acquires user interface company The Astonishing Tribe. February 2011 - Nokia, the world's largest smartphone vendor by volume, abandons its Symbian operating system to form alliance with Microsoft Corp. March 2, 2011 - Apple unveils iPad 2 and ships it later in the same month.
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  April 19, 2011- RIM launches PlayBook in United States and Canada. Early reviews pan the tablet for lacking core BlackBerry functions such as email and organizer functions. The company says it plans to add them in February 2012. April 28, 2011 - RIM slashes an already dismal financial forecast for current quarter but maintains a full-year earnings outlook of $7.50 a share. June 16, 2011 - RIM misses its lowered quarterly revenue target, gives more limp forecasts and resets the full-year outlook to between $5.25 and $6 a share. It says it will slash more than 10 percent of its workforce and buy back stock. July 12, 2011 - Executives deflect criticism at annual general meeting after an activist shareholder withdrew a motion to force co-CEOs Lazaridis and Balsillie to relinquish their other shared role as board chairmen. Sept 6, 2011 - A second activist shareholder asks the board to wrest control from Lazaridis and Balsillie and consider RIM putting itself up for sale or spinning off units. Sept 15, 2011 - RIM reports another poor quarter including a sharp drop in phone and tablet shipments. It points to the low end of latest full year earnings outlook. Oct 10-13, 2011 - Millions of BlackBerry users on five continents are left without email, Internet and instant messaging service by a massive failure of RIM's infrastructure. Nov 29, 2011 - In an acknowledgement of its slipping grip on the corporate sector, RIM offers to manage rival devices including Apple's iPhone and iPad. Dec 2, 2011 - The company books a huge write-down on PlayBook inventory, which it is discounting heavily to provoke sales. Dec 15, 2011 - RIM delays its QNX-based BlackBerry 10 phones until late 2012 and gives tepid short-term outlook. The co-CEOs agree to an immediate pay cut to $1 each.
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  EXHIBIT 3: Global smartphoneshipments by BlackBerry (RIM) from 2007 to 2013 (in million units) EXHIBIT 4: Graph: Sales revenue and Operating Profit in USD ($) for the year 2006-2012. Also shows the percentage of growth rate for the same period. Source: Annual report of RIM ltd (2006 -2012)