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Discussion points… changing the consumer’s perspective of RIM 1. Data is the future for the consumer market 2. Design a new handset in anticipation of changing consumer needs 3. Create consumer-centric applications 4. Partner with carriers to provide data phone option 5. Combine innovative phone with creative direct advertising campaign 3
Data: the new mental model for smartphones The idea: Create a new consumer product and service that primarily uses data to transmit information, without the traditional phone capabilities. The evidence: Smartphone users are driving internet usage Associated with high application usage Skype and other VOIP providers enable phone capabilities over the internet iPhone customers are currently (relatively) satisfied BlackBerry is closely associated with the enterprise market Heavy data usage are making iPhones unprofitable for carriers RIM has the most efficient bandwidth capacity in the market 5
Data: the new mental model for smartphones Assumptions: Capture the consumer segment by offering something different, providing them with what they need now and will be using more of in the future RIM will not succeed in the market by simply mimicking the iPhone Guiding principles: Creating a new consumer perception requires a new approach Provide consumers with a product that matches the core competencies of the organization 6
Consumers are driving the smartphone market US smartphone users are driving mobile Internet usage Driven by high application usage The mobile Internet will become a greater factor in future consumer smartphone buying decisions Source: AdMob Mobile Metric report (February 2009) 7
Establish a new consumer perspective Sharp increase in smartphone demand among consumers The change is happening Similar to shift from landlines to cell phones RIM/BlackBerry are tightly associated with enterprise market 8
Customer base using primarily enterprise models 9 Curve is the most requested BlackBerry product (45%) Source: AdMob Mobile Metrics Report, February 2009
The technology environment is shifting to a Wi-Fi world Google to offer free Wi-Fi in San Francisco Currently offers free Wi-Fi services to Mountain View as testing ground China Telecom’s ChinaNet World’s largest and fastest growing Wi-Fi network; available in hundreds of cities across China Sources: http://wifi.google.com; http://en.chinatelecom.com.cn/products/t20060116_48406.html 10
US Wi-Fi usage is increasing, driven by increased smartphone usage Source: AdMob Mobile Metrics Report, January 2009 11
Develop a new handset for the new mental model Perception: RIM is too associated with business to be seen as a consumer model. E.g. Toyota versus Honda Storm was not an innovation; was launched as a competing model Product has not met with consumer expectations Need to develop an innovation that also meets customer needs to shape the market Differentiation of service and anticipation of demand has proven to successful in this market (e.g. Apple iPhone) 12
Is the BlackBerry Storm trying to be the iPhone? Storm was launched primarily to compete with the iPhone According to consumers, Storm has not lived up to the hype 13
Changing the way consumers think about RIM products What do Consumers want? (Consumption in order of usage) Perception of BlackBerry Storm among consumers Send/receive photos or videos Receive SMS Access news/info via browser Access email Buy ringtones Source: Metrics Press Release, May 21 2008 Poor image quality Bugs with phone technology Frustration with ‘click’touchscreen keyboard No Wi-Fi Good for email access, organizing Good for creating/editing documents Source: ConsumersReports.org review of BlackBerry Storm 9530; rated 65/100 (compared with 14
The future of the market in mobile internet usage through applications RIM to work with 3rd parties to launch applications until their market share increases High application usage is driving smartphone internet usage RIM applications currently business focused Developers need incentives to develop new applications More application usage will drive further application development (e.g. iPhone) 15
Partnering with carriers to provide anew service to consumers Carriers have an incentive to partner with RIM to provide an efficient data phone based on consumer trends Carriers are important: Subsidize phones to consumers Charge a flat rate for smartphone usage However, carriers are: Losing power in the value chain (e.g. Skype, VOIP) As internet usage increases, iPhone will be less profitable for carriers Carriers need to partner up or get pushed out of value chain Source: Scotia Capital Equity Research Daily Edge Company Comment, Research in Motion Ltd., August 13, 2008. 16
BlackBerry adds value through its bandwidth efficient devices 17 BlackBerry is between 8x to 20x more efficient than other technologies BlackBerry generates more revenue for carriers Source: Scotia Capital Equity Research Daily Edge Company Comment, Research in Motion Ltd., August 13, 2008.
Advertise to get consumers to ask for the product before they get to the store Combining creative consumer advertising with an innovative product will get consumers to ask for the product An innovative product will draw customers to retail stores RIM has traditionally focused on direct sales marketing; suitable for enterprise market Apple has achieved strong market by combining these two aspects Consumers respond to different advertising techniques than enterprise market http://www.youtube.com/watch?v=bhhbaaWBgnk http://www.youtube.com/watch?v=GmyVzoyY9Jo 18
Apple has the highest percentage of monthly handset requests in US Source: AdMob Mobile Metrics Report, February 2009 19
References 20 AdMob Mobile Metrics Report (January 2009). AdMob, Inc. 2009. 14 April 2009. < http://www.admob.com/marketing/pdf/mobile_metrics_jan_09.pdf> AdMob Mobile Metrics Report (February 2009). AdMob, Inc. 2009. 14 April 2009. <http://www.admob.com/marketing/pdf/mobile_metrics_feb_09.pdf> Brands. China Telecom Corporation, 2009. 14 April 2009. <http://en.chinatelecom.com.cn/products/t20060116_48406.html> ConsumersReports.org on BlackBerry Storm 9530. Consumers Union of US, Inc. 2009. 14 April 2009. < http://www.consumerreports.org/cro/electronics-computers/phones-mobile-devices/cell-phones-services/smart-phone-ratings/models/overview/99022386.htm > Google Wifi. Google. 2008. 14 April 2009. <http://wifi.google.com> M: Metrics Press Release (2008, May 21). comScore, Inc. 2008. 14 April 2009. http://www.mmetrics.com/press/PressRelease.aspx?article=20080521-smartbrowsing Papageorgious, G. (2008, August 13). Research in Motion Ltd., Scotia Capital Equity Research Daily Edge Company Comment.