Blackberry is an iconic brand. Owned and promoted by the Canadian company Research In Motion (RIM), it made the concept of a smartphone appealing to the world. RIM launched the Blackberry phones that every person aspired to buy. Initially these premium phones were expensive but eventually cheaper versions were launched which these phones affordable for the middle class. The phones people once aspired to buy were now affordable. This meant high volumes and majority of the market share in the smartphone category. The company flourished to such heights that it literally supported one-third of the town it was based in.
This is the story of RIM till 2010. Post-2010 the company is in doldrums. Recently, news of the company laying-off 5,000 of its employees and a steep drop in its market share was published. Also, its stock prices decreased a lot over the past year. This despite new phone sets being launched which were decent and the successful phone sets still in the product line. What is the reason behind this change in fortunes for RIM?
The main reason is that RIM faltered in identifying its target market. Initially Blackberry phones had features like e-mail and qwerty keypads and were expensive. Through this RIM targeted the business executives. It was a status symbol to own a blackberry. At this point the company had a focused target market. But, in an effort to increase their market share, RIM launched cheaper phones making it affordable for youngsters and middle-class people to buy them. Now almost everybody had a blackberry. It worked well for some time but then there were serious problems because of an unfocussed target market. It seemed like the business’s target market was the whole society with products dispersed in every price range. The Android phones with a focused target market hit the company badly. The Android phones were affordable, had a large app library, touch screen and all the features that Blackberry phones had. So people now started buying Android phones. Blackberry phones weren’t able to compete because the Androids offered much more at competitive prices. This led to the fall of the Blackberry phones. In the quest to increase their market share, RIM even lost their initial customers, the business executives, who started switching to ‘smarter’ phones like the Apple IPhone. Had RIM not introduced cheaper versions and maintained the status symbol of their phones, today they would not have been in the situation they are now.
With stiff competition from competitors like Android-platform phones in the low-price market and the Apple IPhone in the high-price market, RIM needs to make its Blackberry phones more competitive. Despite low investor confidence, I am hopeful that RIM will make a turn-around. After all, the smartphone category was literally created by the Blackberry phones. This means RIM have the potential to make a new phone category. Maybe a super-smart phone is on its way!