BlackBerry Torch:Lighting RIMs FireReliability, Security, Flexibility

Jaime Vergara Jessica Stanford Jonida Kapo Priya Sridhar Shekhar Pareek MBA 2012, Brandeis IBS

OUTLINE Current Situation Analysis Value Proposition Strategy Recommendations

COMPANY: BACKGROUNDResearch in Motion, Canada (1984)First Blackberry (1999) 14k employees worldwide Growth and value (84% profit in 2009) Revenue: 15 ml to 15bn Subscribers: 500k to 50bn 3rdparty developers and manufacturers R&D spending not efficient ( 2% in 2008)

COMPANY Image: #1 selling smart-phone in the US Signature: Qwerty Keyboard & push email Key Value Proposition: A reliable, secure, and flexible business phone

Goals: Cater to the evolving needs of existing and new market segments. Sustain growth by expanding the customer base and fostering innovation.

COMPANY: Product Line

COMPANY: TorchFEATURES Traditional BlackBerry features Slider + touch screen BlackBerry 6 OS Enhanced Security BBM, Social Networks WebKit-based browser Advanced Messaging Business Apps At Your Fingertips Bloomberg, LinkedIn Better memory management Fun features Wireless synching of music 5 MP camera

COMPANY: TorchCost and PricingFunction Materials Only Estimated Manufacturing Costs Total Cost/Unit Price 149.99 Distributor 99.99 Best Buy AT&T Price 149.99 99.99 Cost ($) 171.05 12.00 183.05

Both $ 199 and $99 are A&T subsidized prices Two year contract, min. $15/month and new activation. Minimum $380 revenue/person RIM is not necessarily making a loss

COLLABORATORS: SuppliersRIMs five biggest suppliers 90% of production costs 2009 cut suppliers costs Worldwide presence Example: Torch suppliers Samsung(JP), Digital Seminconductors(GER), Texas Instruments(US), CRS(UK)

COLLABORATORS: Alliances Supporting Enterprise Solutions

Others

COLLABORATORS: Distributors

US Market Share9% 11% 17% 31%

32%

AT&T

Verizon

Sprint

T-Mobile

Others

COLLABORATORS: Distributors1 year exclusive contract RIMs #1 distributor a year ago Technical support Businesses and group consumers

No technical support Mainly individual customers

COLLABORATORS: DistributorsAT&T Sales Strategy

Smartphone MarketProduct innovation Price drops after 3 months of launch period

Sales ForceCommission on service 1% at end of value contract Commission on Apps sold

CUSTOMERSBlackBerry: 37% Segments Enterprises (Core) over 50% Prosumers (Potential) Individuals (Potential)Age Demographics Age Group 18-34 35-44 45-54 55-64 65+

CUSTOMERS

CUSTOMERS and COMPETITION

Comparative Customer Loyalty

COMPETITIONRIM Apple Samsung HTC Motorola

Device 2 yr contract price Carrier (exclusively) Operating System

BlackBerry IPhone 4 Torch $99.99 AT&T $199.99 AT&T

Captivate $199.99 AT&T Android

EVO $199.99 Sprint Android

Droid 2 $149.99 Verizon Android

Blackberry iOS4 OS 6

COMPETITION

32%

MARKET & SALES Media Distorted Comparison IPhone & BlackBerry First Consumers are different Weekend Enterprise buying process is Sales (units) slower Torch launched only in US with AT&T Price Revenue per unit around $300 149.99 million shipment in Q3 US: 5.1 2010 99.99million Torch sales or 1.14 3.8 million in revenue or GM =40%Phone BlackBerry Iphone 4 Torch 150K 1.7 million

CONTEXT Growing Smartphone Market (Globally) 89.5% ( 3Q09-3Q10) "Smartphone makers have the wind behind their sails,Kevin Restivo, Senior Analyst, IDC Smart Security (41% top, 40% high priority) Economic downturn: cost-cutting Product cycle up to 1 year US: SMEs employ half the private labor force 153m

CONTEXT

CONTEXT OS Competition RIM, Apple, Google, and Microsoft

Carrier exclusivity Smartphone consumer behavior Business + Pleasure Phones (44%) Employees buy their own Smartphones (IDC) Global Mobile workers 1bn by 2011(IDC)

SWOTStrengths: Product Features Brand Equity Weaknesses: Apps Screen Resolution Slow processor High manufacturing costs

BlackBerry TorchOpportunities: Industry Growth Social Networking Software Updates Threats: Consumer Trends Competition Product life cycle Poor Customer Loyalty

VALUE PROPOSITION Compelling values (Work meets fun) Communication, Security, Encryption BlackBerry with a Slider and Touch screen

For whom? Enterprises Prosumers Positioning Reliability, Security, Flexibility

PRODUCT Strategy High demand for smart-phone with QWERTY and Touch screen Incremental R&D Innovate Adjust to market product life cycles Optimize manufacturing

PRICE StrategyPrice and Corporate discount$250$200 $150 $100 $50 $10% 10% 8%

Discount Price

Torch (AT&T)$(50)

HTC EVO (Sprint) Droid 2 (Verizon)

$(100)

Percentages indicate service discount

PRICE StrategyRecommendations Current At launch: Differentiate: $199.99 w/2 yr Price discount for contract enterprises & prosumers 3 months: $99 w/2 yr contract. Keep the price at $99 for the next three months Purpose: Further discount after 1 Volume Sales year Price Competitiveness

PLACE Strategy (AT&T)Current Commission: Service (1%) Demo Phones in stores No experience Employees lack knowledge on: Target market Torch key features Recommendations Commission : Devices & Apps Tester phones in stores Employees Training Offer trial phones to prosumers

PROMOTION: AIDAAwareness Who Young Professionals and IT executives Interest Young Professionals and IT executives Desire Young Professionals and IT executives Action Decision makers: CEOs and IT executives

What

New Product Key Features

Security Applications

Tester Phones Functionality User FriendlinessBTL Advertising Events and sponsorship: CTIA Golf Tournaments Career fairs

Discounts

How Where

Broad Advertising Television Radio Internet: YouTube, Facebook, Twitter, LinkedIn

Specific Advertising Magazines Direct email to IT executives Internet: BlackBerry.com and ATT.com

Sales Meeting AT&T

PROMOTION: CustomizationLove What You Do Where Fun Meets Business

PROMOTION: CEO Kit BlackBerry CEO Kit - Extra battery - Charging pod - Leather carrying case - Extended warranty

PROMOTION: To AT&T Increase the margin for AT&T Tester phones to company IT employees

FINAL RECOMMENDATIONS Product: Incremental investment in R&D Price: Comparable price at launch, decrease after 3-6 months relative to sales success Place: Commission on device sales Tester phones to push sales Training Promotion: AIDA Customization CEO Kit AT&T

Thank you!!

SOURCEShttp://www.theglobeandmail.com/news/national/time-to-lead/work-life-balance/users-admit-it-blackberry-increasesproductivity/article1779794/ - PRODUCTIVITY INFO http://tech.fortune.cnn.com/tag/blackberry/ the market share in the US for each smartphone http://www.linkedin.com/answers/technology/software-development/TCH_SFT/70852554428968?searchIdx=1&sik=1289670458137&goback=.asr_1_1289670458137 linked in research http://www.mobilemarketingwatch.com/torch-song-8223/ market trends context http://www.mobilemarketingwatch.com/at-least-you-can-sell-them-stuff-under-the-boss-nose-7634/ context http://www.brighthub.com/mobile/blackberry-platform/articles/86723.aspx http://en.wikipedia.org/wiki/Research_In_Motion http://uk.blackberry.com//campaign/appplanet/ MWC_AP_2010_ROOM1_1330_Optimal_App_Plus_App_World_LUTE_LAUGHLIN_FormattedBrandApproved_FINALv2.pdf http://knowledgenetwork.thunderbird.edu/research/2010/08/13/research-in-motion/ http://www.webpronews.com/topnews/2010/11/04/global-smartphone-market-makes-big-gains utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+webpronews/all+(WebProNews:+Index+Feed) http://www.blackberry.com/newsletters/connection/business/i310/smartphones.shtml http://www.netqin.com/en/security/newsinfo_2882_3.html http://www.juniper.net/us/en/company/press-center/press-releases/2010/pr_2010_10_26-10_02.html, http://portablevillage.com/android/mary-meeker-internet-trends-mobile-internet-will-overtake-desktop-one-in-five-years Source: NPD Group/Consumer Tracking Service