As of the year 2006, the Global wireless market had staggering 2.7 billion wireless subscribers making it one of the most promising and yet relatively lucrative investment platform worldwide (Carayannopoulos 18). It is further noted in the works of Carayannopoulos (18) that an expert analysis of the market trend posits that the industry was anticipated to grow to 3 billion subscribers by the end of year 2007 with the fastest subscriber growth being experienced in countries like China, Japan, U.S. India and Russia among other markets (Carayannopoulos 18). Of these, two categories of purchasers were evident as terms like consumers and prosumers were adopted to differentiate in their diverse fields of interests (Carayannopoulos 18). Understanding each category of consumers is imperative to the development of novel products that meet their individual needs. According to Carayannopoulos (18), mainstream consumers were in the habit of looking for products that offered among other things, voice communication, internet browsing, e-mail capabilities and listening to music with an inclination to products that were attractive, graphical, easy to use as well as small in size.
Research In Motion (acronym RIM) was jointly started by Mike Lazaridis and Douglas Fregin back in the year 1984 with Jim Balsillie heavily investing in the company in 1992 to join the top notch of the company (Carayannopoulos 18). While Fregin sat on the Chairman’s seat, Lazaridis and Balsillie became co-CEO of RIM with Lazaridis focusing more on the technical aspects of RIM and Balsillie concentrating on business expansion (Carayannopoulos 18). At the inception of the company, RIM concentrated all its efforts towards the development of software and hardware in line with wireless data communication (Carayannopoulos 18).
RIM has over the past years increased its market stance. Among the latest developments of RIM’s product line is the development of BlackBerry Pearl (also known as BlackBerry 8100), and BlackBerry Curve (also known as BlackBerry 8300) (Carayannopoulos 18, 24). These two products were fashioned specifically in response to a growing customer concern and demand for products that had multimedia capabilities included in their BlackBerry (Carayannopoulos 24). Additionally, the development of the first ever professional grade tablet dabbed BlackBerry Play Book has yet boosted RIM’s market stance (Borden 68). Innovation and differentiation of its novel products has placed RIM at an advantage in the market place.
Another strength that is shown in RIM is in the fact that RIM can capture the market and any emerging opportunities that can yield profits for the company. Take for example, similar to its Apple rival, RIM has been able to captivate and cultivate a customer base that vehemently subscribe to its monthly charges that are an addition to the ordinary utilities in communication and data transfer (Carayannopoulos 18, 23). This has over time yielded surmounting returns for the company, which has enabled the company to invest back into diverse fields like in Research and Development (R&D) department.
Furthermore, the technological stance that RIM has developed so far has placed in such a position that companies like Samsung, Nokia and Motorola, to mention but a few, have been forced to purchase software licenses. This is especially in the “push” messaging system so that they can also incorporate such features in their new product lines (Carayannopoulos 21).
It is also noted that RIM’s products offered competitive products that were able to accommodate other company’s products like Microsoft, Good Technologies and Danger, Inc. because of their flexibility in their hand held devices, platform and network system (Carayannopoulos 21).
As of its launch, BlackBerry 8100 and BlackBerry 8300 were among the slickest of the BlackBerries produced coupled with a 2 and 1.3 mega pixel camera, respectively, with a 3 zoom levels with a built-in flash in addition to email, messaging and web browsing capability, a rare mix at the time (Carayannopoulos 24). Accompanying these was multimedia player with stereo head sets for AAC and MP3 music, with the choice from three colors (that is Black, Red and White) (Carayannopoulos 24).
As a sign of its increased market dominance, RIM ensured that it doubled its customer base every year (Carayannopoulos 24). For instance, in 2003 RIM’s customer base was 500,000 while as of 2004, the customer base had increased to 1 million, then to 2.4 million in 2005 and a further 4.9 million in 2006, a sturdy of its market pliability (see Carayannopoulos 26). To affirm this theory, as of 2006, RIM had way over 100,000 organizations and corporations under its leash with installed and serviced BlackBerry Enterprise Server (Carayannopoulos 26). The main reason for such a high customer base may be attributed to the fact that RIM has over time emphasized on security (Carayannopoulos 26), an essential ingredient especially for corporations whose backbone of operations lies in the ability to assure its customer bases of security all round. Additionally, RIM was able to provide products that were manageable, secure and ones that could be centralized for control with capabilities of corporations disabling multimedia capabilities from its employee devices, a prerequisite of most corporations at the time (Carayannopoulos 26).
It is also noted that RIM, as of the start of fiscal year 2004 increased its investment in Research and Development from the then figure of US $ 62.6 million to a whopping US $ 235 million by the end of fiscal year 2007 (Carayannopoulos 28). In addition to this, over 34 % (about 2,100) of its employee base majored in R&D (Carayannopoulos 28). It is also a fact that in an effort to increase innovation stance of its employees, every year there is always a banquet held in recognition of those employees that have innovatively contributed to the company for the entire year and such employees are rewarded handsomely (Carayannopoulos 28). This approach has placed RIM at an advantage with over 650 patents under its name as of 2007 (Carayannopoulos 28).
Another line of strength is seen in its exquisite employee turnover rate of less than 1 %, with a reputation in local universities as the employer of choice for most graduates (Carayannopoulos 28). This is complemented with RIM’s internal communication approach that surfaces as being more fluid than hierarchical (Carayannopoulos 29). The notion of “BlackBerry Killer” also indicated that BlackBerry is a product that has become a force to reckon (Carayannopoulos 29).
However, despite such alluring strengths, it is dejecting to note that the BlackBerry market is slowly dwindling in a subversive and vibrant market. RIM has shown slow progress and realization of a rapidly changing market place. For example, while the market shifted from the ancient divergent market to the current convergent and technically intense market, all that RIM did was to gawk as its market share was fervidly subdivided by large corporations and emerging players alike (Carayannopoulos 17) and (Cummins n. pag). When RIM entered the consumer market, it became exposed to vehement pricing wars and pressure (Carayannopoulos 17).
It is also noted that RIM has been in the habit of avoiding “rocks” in its quest and thus missing out on potentially rewarding ventures as compared to Apple’s risk taking approach that has thrust it into market dominance on several fronts (Carayannopoulos 17) and (Borden 68). It is further noted that RIM made deals with certain providers for which a switch from such providers led to subscribers being unable to switch from one provider to the next (also known as “number portability”) (Carayannopoulos 20).
RIM’s target on a corporation to produce its products meant that the company deprived itself of an opportunity to study vital aspects of individual consumers and thus they were left behind by large multinationals like Nokia, Motorola and Apple to mention but a few (Cummins n. pag) and (Carayannopoulos 20). A brief comparison between employees that purchased Apple’s iPhone and those in possession of BlackBerry yielded grave disparities especially in work places, an indication that RIM utterly misunderstood the needs of its individual consumers (Carayannopoulos 24) and (Borden 68). An indication of the claims of dwindling market share is shown in the decline in its World PDA market by vendor share from 21.4 % in 2006 to 20.0 % in 2006, a sharp unwarranted drop (Carayannopoulos 33).
RIM has had and still has enormous opportunities, and potential to bridge the gap that it has over time created between its products and the market acceptance as products of choice. By tightening the security stance of its products, ensuring that the products are reliable, and the ability for data integration, it is possible for RIM to woo more corporations to its stubble (Carayannopoulos 18).
Another opportunity that RIM gazes upon is the vastness of the market as analysts have predicted its robustness to continue to increase almost exponentially (Carayannopoulos 19). Analysts anticipated that as of 2010, in North America alone, subscribers would be spending a staggering US $ 10 billion annually on wireless enterprise data services, an opportunity that RIM could embrace and work towards profit optimization through novel products and services, including diversification (Carayannopoulos 20). By strategically using the BlackBerry Developer Zone, it is possible for RIM to make more money like it is the habit of Apple with its applications designed by innovative consumers (Carayannopoulos 26, 28).
Although recently adopted, outsourcing is another vital platform that possesses immense potential for RIM to embrace (Carayannopoulos 28). Strategic acquisitions may also provide a solid springboard for RIM to expand its tentacles in the market (Carayannopoulos 28).
RIM may have been a strong company, but its presence in the market is not effective in the vibrant technological prowess portrayed in today’s market place. One of the threats of RIM is Apple’s delve into BlackBerry’s enterprise market with its novel iPhone and other i-series products (Carayannopoulos 17). RIM continues to produce perceivably divergent products while the market mantle has shifted to convergent technology (Carayannopoulos 19). From the look of things, RIM is surrounded by large multinationals willing and ready to usurp its current market share in line with wireless hand held market (Carayannopoulos 20).
It is further noted that the entrance of Motorola and Nokia in the wireless data market was through leveraging their dominant positions especially in the cellphone industry, in addition to, their offering ‘cost-optimized’ handsets (Carayannopoulos 20). RIM’s problem was exacerbated with the entrance of Samsung and Apple into the wireless data market in late 2006 and early 2007, respectively (Carayannopoulos 20, 21) and (Borden 67).
Of all the challenges that emanate from RIM analysis, the one problem that is evidential is the lack of product diversification. RIM seems afraid to take risks.
Supporting Facts/ Assumptions
It is noted that RIM has the habit of avoiding “rock” (see Carayannopoulos 20+). RIM misdemeanor is further aggravated especially when one considers the fact that, RIM can only boast of two lines of products; BlackBerry and BlackBerry Play Book Tablet. The products are relatively unique compared to a rival like Apple that jousters the market with over twelve lines of products. The products of apple include: iPads, iPhones, iPod touch, iPod Nano, iPod shuffle, iPod classic, Apple TV Mac Book Air, Mac Book Pro, Mac mini, Mac Pro, AirPort Express among others (Borden 66-73) and (Cummins n. pag).
First, RIM has to shift its focus from corporations only to invest in individual customer products. Secondly, RIM can also invest in products that offer fewer features to capture the low income earners who earn less and thus can only afford low-priced products. Thirdly, RIM should expand its product line from just BlackBerries to other open and vibrant fields of future generation technology while ensuring they keep the current generation Y under lock and key.
Borden, Mark. "iPhone Envy? You Must Be Joking." Fast Company 2009: 66, 73,106. ABI/INFORM Complete. Web. 3 July 2012
Carayannopoulos, Sofy “Research In Motion – Entering a New Era.” Case Research Journal 27.2 (2007): 17-43. Ecch the case for learning. Web. 3 July 2012.
Cummins, Chip. "Losing Ground, BlackBerry Resets." Wall Street Journal (Online): n/a. ABI/INFORM Complete. Jul 26 2011. Web. 3 July 2012.