Research in Motion

Jenice joy sumaway Genilyn gaan September 24, 2011

Situation Analysis

Industry
11% in global wireless market (3B in 2007) Market Segments: Personal use, Prosumer and Enterprise Japan and Korea non-business 30% messaging; 70% MMS, browser traffic and infotainment Europe business 70%-80% messaging; 20%-30% others Introduction of Smartphones in 2000 Manufacturers focus on both software & hardware capabilities

Competitor
NOKIA 39% market share 174 million smartphones sold in 2009 launched free satellite navigation to boost smartphone sales APPLE 14% market share became a consumer phenomenon and led the mobile industry to shift focus on software and applications Expanding into new markets such as China HTC Plans to introduce lower-priced models to target developing markets such as China Manufactures Google's own-brand Nexus One smartphone SAMSUNG 3% market share aims to at least treble its smartphone volume this year and plans to offer phones running on Android, Windows Mobile and Linux

Competitor
SONY ERICSSON Japanese-Swedish venture has struggled to build position in the smartphone market, with Windows-phone X1 Symbian, Android and Windows

LG ELECTRONICS World's No.3 mobile maker It has an ambitious target to achieve a double-digit share of the global smartphone market by 2012.

Source: www.reuters.com

Worldwide Market for PDA and Smartphones

Worlwide Market Sales
200 150 100 50 0 2000 2003 2004 PDA Sales 2005 2006 2007 2008 100 80 60 40 20 0 2004 Research in Motion Palm 2005 Hewlett-Packard 2006 Nokia T-Mobile Others

Worldwide PDA Market Share

Smartphone Sales

Source: Gartner Dataquest Feb 14, 2006; Oct 9, 2006

Source: Smarthones to outsell PDAs by 5:1 eT Forecasts, March 28, 2006

When Smartphones were introduced in the market theres significant sales growth of 528%, 48%, 65%, 42% and 6% respectively.

RIM market share increases 23% from 04 to 05 grabbing from Palm & HP. But -7% decreases from 05 to 06, maybe Nokia and others increase market share.

Market Overview
Market Demand vs Replacement Units
2500 2000 1500 1000 500 0 2005 2006 Market demand 2007 2008 3500 3000 2500 2000 1500 1000 500 0 2005 2006 2007 2008

Global Subscriptions

Replacement units

Current Subscriptions

Net New Subscriptions

Source: M. Hoffman and J. Baxter Wireless Equipment Mobile Phone Industry Still Seeking Balance, Cowan & Company, April 13, 2007

Market demand and replacement units were increasing from 2005 to 2008

Current subscription were increasing, but theres a slow growth in new subscriptions

Handset Sales Growth by Region

45% 40% 35% 30% 25% 20% 15% 15% 10% 5% 0% -5% -10% North America -7% 2006 2007 2008 Latin America Western Europe EMEA Asia Pacific Total Unit Sell-in 11% 9% 6% 4% 4% 6% 5% 11% 14% 15% 11% 11% 13% 27% 22% 42%

Theres 22% increase in handset sales from 05 to 06, AP and EMEA contributes to biggest growth in 06. But sales growth drop to 13% and 5%, in 2007 and 2008 respectively.

Organization

The Company
Fast Facts Founded in 1984 Headquarters in Waterloo, Ontario, Canada Offices in North America, Asia-Pacific and Europe Launched the BlackBerry smartphone in 1999 Led by Co-CEO Jim Balsillie and President and Co-CEO Mike Lazaridis Young image and culture

RIM Executives
Since 1992, Jim Balsillie has been co-CEO at Research In Motion (RIM), maker of the world renowned BlackBerry wireless solution. At RIM, Jim is responsible for driving corporate strategy, business development, marketing, sales, and finance. As President and Co-CEO of Research In Motion (RIM), a company Mr. Lazaridis founded while a student at UW, he is responsible for product strategy, research and development, product development, and manufacturing. Mr. Lazaridis is also a leader in his community and a passionate advocate for education and scientific research. Mr. Lazaridis supports his community and country through generous philanthropic gifts made possible by his success in business.

RIM Milestones
2011 2010 Acquired BlackBerry applications developer Viigo and QNX Software Systems Announced the long rumoured BlackBerry PlayBook tablet computer Held 10.4% of the smartphone operating system market BlackBerry PlayBook was officially released to US and Canadian consumers RIM's shareholders lost almost $70 billion or 82% Axed 2,000 jobs, the biggest lay-off in its history or 11% from 19,000 to 17,000

2009 Expand Global operations 2006-2008 Free Pocket Mac for blackberry 1995-1999 Canadian Fund Inc invest C$5M C$30M in pre-IPO financing RIM launch Blackberry One of Canadas Top 100 Employers Acquire Dash Navigation, Torch Mobile Fortune Magazine fastest growing company

Sales, Operating Income and Net Income (2002-2011) (2002Research in Motion

25,000,000,000

20,000,000,000

15,000,000,000

10,000,000,000

5,000,000,000

0 2002 -5,000,000,000 Sales Operating Income Net Income 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: Wikipedia

Marketing Strategies
1999 launched Blackberry handheld mobile phone with pushed technology easy to use has encryption software. RIM Non-server & BB Enterprise Server (BES) Corporate Solutions Centre Free trial to CEOs (Jack Welsh, GE) 2002 Proprietary brand that companies asked for by name Popular and indispensable solution in organizations Made its way to Pop culture, shown in movies and TV shows 20% of all PDA sales 59% of corporate wireless e-mail traffic 2006 2007 Initiated BB tradeup program Increase R&D Slipstream, increase Budget to $235M internet browsing Inventors Banquet efficiency Mobile & Desk Launched BB Pearl Phone integration 8100 and BB Curve 8300

SWOT Analysis

SWOT Analysis
STRENGTHS
Leading position in handheld market Product offerings for personal, prosumer and enterprise markets 270 network operators in 110 countries Awarded the FIPS 140-2 validation by USNIST for encryption technology Low employee turnover rate (1%) Consider customers before any product changes Formed controls to monitor work efforts globally Continuous product innovation Strong experience in data transmission Pioneer in PUSHED technology Blackberry hardware & software system is easy-to-use Advanced ENCRYPTION SOFTWARE (met Intels security benchmark)

WEAKNESSES
Small enterprise market Dependent on network providers Weak market share in consumer and prosumer Over production vs subscriber signed No validation in Europe, Australia & New Zealand (purchase criterion for government and military) Challenges in product innovation vs security

SWOT Analysis
OPPORTUNITIES
Growing wireless market, approximately 3B in 2007 Increasing demand for multiple functions phone Network providers sizable investments for upgrade, fit for new devices Fast subscribers growth in China, India, Japan, Russia and US Partner network in Europe, Asia Pacific, Africa and Latin America Market penetration in Australia, India, Singapore and Hongkong

THREATS
Large competitors were starting to target RIM enterprise market Business subscribers approaching saturation Strong pricing pressure in consumer market Apple iPhone consumer phenomenon Large competitor in consumer market Nokia & Motorola Motorola & Nokia offerings of costoptimized market and increasing market share

Which market should RIM emphasized?

RIM should still prioritize dominating enterprise market because RIMs competitive advantage is its "Encryption Technology, Data security differentiates them among competitor. RIM must develop enterprise related software applications for various business functions that can be easily integrated with firms current technology. They might also consider having a different marketing strategy for Small Enterprise market segment who are smaller organizations with lesser budget but would like to adopt Blackberry technology. However, offering retail-friendly and lower-profit phone models such as Curve will also contribute additional sales. They should also expand in international markets particularly in Europe, Asia Pacific, EMEA, and Latin America. They must also work on winning validation in Europe, Australia and New Zealand so they will be the preferred brand in government and military market.