Mobile phone industry(Globally)• $ 1.18 trillion industry – 14% from handsets sale• 6 billion mobile phone subscribers at end of 2011 – 76% of them in developing world• Expected to rise to 8 billion by end of 2013• 87% percent - Global market penetration rate• 3.2 billion - Unique mobile phone subscribers• China world’s largest market. Followed by India and US
Mobile Handsets• Expected sales of 1.8 billion handsets in year 2012. Up from 1.7 million in 2011• 38.8% of sales will be from smartphones. A 10% increase YoY• Android accounted for 75% of smartphones sold in Q3 2012 – 91.5% YoY growth• Market growth rate for smartphones is at 46.4%
Mobile handset market in 2011 Market Share Nokia Samsung 23.80% Apple 33.70% LG Electronics ZTE 17.70% RIM HTC1.80% Huawei2.30% Motorola 2.30% Sony Ericsson 5.00% 4.90% Others 2.40% 2.90% 3.20%
Industry OverviewIn 2012 ,• Market size in units 80000 – 100000 mobile phones per month• In value : Rs 6 – 8 billion per annum• Market is mainly dominated by 3 key brands while Samsung is the market leader. Brand % Samsung 21% Nokia 20% Apple 8% ZTE 4% Others 47%• Within Past 2 – 3 years Samsung became the market leader taking the pole position from Nokia
• Market is mainly segmented by the income level while lower income group contributes around 70% of total revenue • Market penetration in north and east is around 10% and expects to boost up with the government heavy investment on infrastructure in those areas. • Income level growth , technology development & population growth are the key demand driven factors in any market segment. • With the new rules and regulations which are introduced by TRC it is expected to shrink gray market while the demand for branded phones increase. • Recent Change of tariff structure and the increase of government investment on technology results for favorable future of mobile industry. North and East Potential Penetration Under Market Penetration UnderNorth & East 693169 72200 620979 Penetrati Potential on Market 45% 50% Penetrati on 5%
Target Market Basic UsersThe cell phone is just another communication device for these consumers. Mobirati UsersThe mobile generation that has grown up with cell phones and cant imagine life withoutthem. Cell phones are a central part of their everyday lives. Paragmatic AdoptersCell phones emerged in their adult years and theyre now learning to use them for thingsother than talking. Cell phones are more a part of their everyday life than ever before, butstill mainly functional. Social ConnectorsCommunication is central to their lives and cell phones allow them to keep up to datewith friends and social events. The mobile device is the bridge to their social world. Paragmatic Adopters Social Connectors
Segmentation Strategy Potential Market Lower income Top Income Middle Income group Group Group Features Base Features Base Features Base
Customer Buying Behavior :Basic Users Lower and Middle Income Top Tier Groups 3G Features Camera Law & Middle Top Tier Office Price Wi-Fi BUY
Research in Motion History• Founded 1984‡• 1996 - Introduces the RIM 900Inter@ctivePager‡• 1999 - Launches BlackBerry service‡• 2004 - 1 million BlackBerry subscribers‡• 2007 - 10 million subscribers‡• 2010 Revenue: $14.9 billion‡• 2010 Net Income: $3.46 billion
BlackBerry• Started out as a two-way radio pager called the Inter@ctive Pager in the research labs of RIM in 1996• Pager was the fist pocket-sized two-way messaging pager and the predecessor to the BlackBerry• First phone-capable device was introduced in 2004 as the BlackBerry 7100t
Push technology & QWERTY• Email services serves as one of the main differentiating points• Push technology allows emails to automatically show up on the device without the lag time of having to refresh a web- browser to view new emails.• RIM designed and patented the now ubiquitous QWERTY keyboard
Purpose and Features of RIM• Providing access to communication and important information all across the globe• Build industry standards and improve performance of internationally mobile companies and their personnel.• BB smartphones have supports for Email, text, IM, Social networks, Web access, GPS etc.• Many offerings with variation in features• International support on CANTEL and BellSouth network as well as nationwide network coverage on Ericsson’s Mobitex.• Addon BlackBerry Enterprise Server for centralized administration ands support for laptop users
RIM vs. Google vs. Apple vs. Twitter Followers Following
RIM in NewsKeith Pardy (CMO) quit before launch of Playbook2011 Q4: - Shares Price plunged 11%
Blackberry - Evolution• The RIM 850 was the first device which became popular. It had a six line monochrome display and could send messages, emails and had calenders, address book, task list, calculator and alarm function• The company followed it up with the first Blackberry branded device, the 5810. It had a bigger monochrome screen and also allowed voice calls with the use of an external headphone and microphone• Blackberry 6710 was the first proper phone from the company with am inbuilt microphone and speaker
Blackberry Evolution – Contd.• The 7210 was the first smartphone from the company. It had a colour screen and had a browser on board for internet surfing. It could also open MS Word, Excel and Powerpoint files.• The 7100t launched during the was a slimmed down version aimed at the consumer market• The Pearl 8100 was the first to include a camera and media player applications• The 8800 was the first to include a GPS allowing making real time mapping a possibility.
Blackberry Evolution – Contd.• The Curve 8300 was launched with a front facing camera which allowed video calls and also Wifi• Bold 9000 started offering expandable memory for data use and a large colour display• Joined the touchscreen bandwagon with the Storm. It had no physical keypad.• The Playbook tablet was launched to meet the growing demand for tablets.
• BBM encouraged the entry of younger customers and the prepaid segment into BlackBerry services in India.• BlackBerry Services – historically targeted at the corporate market – had a proven track record in commanding high ARPUs.• With BBM, the impact is a lot more personal as compared to facebook and twitter with a one-on- one and group communication possible.• They introduced the single interface point where multiple applications (like FB, Twitter) are integrated to enhance user experience.
• To tap into the young ‘BlackBerry Boys generation, RIM had launched models such as Curve 8520.• Although pre-paid commanded the lowest ARPU, research found that the youth liked to be seen as affluent, tech-savvy and constantly in touch with friends.• Vodafone decided to tap into BBM’s attraction as a free alternative to more expensive text messaging and introduced pre-paid BlackBerry Services.• The add-ons include colourful skins and packaging, while services were being added o at the back end for the ‘always connected generation.
• Vodafones Rs 5 per day or Rs 129 per month BlackBerry Messenger plan were introduced to attract more youngsters.• The objective of the campaign was to increase the appeal of BlackBerry services on Vodafone to a larger audience with special emphasis on the younger generation.• Results: Vodafone increased its share of BlackBerry users by 96%, nearly double its 50% target and within the first four months of the campaign it signed up nearly 154,000 additional subscribers (of which 35,000 were pre-paid)• Its post-paid customer base grew 74% from 160,000 pre-campaign to 279,000 post-campaign
Strategic Issues• Operating Performance Declined• Lost Product Innovation• Changing Business Environment• Increasing Competition
Operating Performance DeclinedNew Subscribers Per Quarter turndownNew Subscribers Added Per Unit Soldcontinue dropDevice Gross Margin Percentage getthinnerRevenue Per BlackBerry Device Solddeclined
Lost Product innovationFull Qwerty Touch Screen Playbook- Classical BB Strength - Response to iphone - Response to iPad2
Changing Environment Mobile Trends 1/3rd of Americans access mobile browser and socialnetworking sites on mobile phones Mobile Application Touch User Experience Web Trends: Email Social Media Traditional portals, Online leisure Activities Changing Customers Enterprise Mass market Shifting Age Profile Twitter Facebook
Increasing Competitionbeat old competitor or address new comer
Increasing Competition - cont`dMobile App Store
Strategic Issues Analysis RIM Operating Innovation Competition Environment Performance Device UserSubscriber Talent New Trend Customer Margin Experience
Root Cause Analysis• Root Causes – Shift Ageing Mobile activities – Customer Satisfaction – Web experience shift Email to Social mobile App – Touch screen pricing strategy – Recruit talent corp culture
Sales and market shareGartner’s figures showsBlackBerry sales whichis increasing until thesecond half of 2010.This year, BlackBerrysales seem to be in freefall.
Share of mobile web browsing• A smart phone is a mobile powerhouse, and many are used to browse the web- BlackBerry devices were used for just over 1% of mobile web browsing in the US in July 2012.