How does one define whether a firm operating in the mobile phone industry is more or less successful? Some argue that success should be measured using the metrics defined by the titans of industry. Warren Buffet, one of the most successful investors of our time uses “Return On Invested Capital” (ROIC) as the key measure of enterprise success. However, using this measure Apple is only slightly (1.5%) more successful than Research in Motion (RIM) table 1 refers. However, for the purposes of this paper we have defined success as a firm's ability to strategically position its self as a high-end premium brand, with a reputation as the market leader in quality, customer satisfaction and steadily growing market share. Using these metrics, we propose that clearly Apple is the more successful of the two.../ The results from a 30 question quantitative survey with over 120+ respondents, and 2 qualitative focus groups were used to analyze perceptions, needs and wants of business users in California and beyond. Results were presented in the paper and a 20 minute presentation, alongside recommendations for both brands.

1. APPLE CRUSHES, BLACKBERRY BLEEDS…
…IT’S BUSINESS AS USUAL ;-)
Marketing Management 205 - June 1, 2012
team3z
Alexandra Brooks, Steve Chaky, Ruben Pedroza, and Sharon
Singleton
1

2. The modern history of mobile phones dates back to before World War II. The US Military used
mobile cellular radios for communication during World War II. Commercial use of cell phones
began in 1946 in St. Louis. AT&T was the first company to offer mobile telephone service and
since that time, the cell phone industry has grown into a $152 billion industry dominated by
fierce competition; there are several key cell phone makers including, Apple, Samsung, HTC,
Research in Motion (RIM), LG, and Nokia. The market has become segmented into two main
groups, smart phones and feature phones; Apple and RIM compete exclusively in the smart
phone segment.
Success
How does one define whether firm in this industry is more or less successful? Some argue that
success should be measured using the metrics defined by the titans of industry. Warren Buffet,
one of the most successful investors of our time uses “Return On Invested Capital” (ROIC) as
the key measure of enterprise success. Using this measure Apple is only slightly (1.5%) more
successful than Research in Motion (RIM) table 1 refers.
Company
Apple
RIM
5 Year Average ROIC
29.5%
28.0%
Table 1 ROIC comparison Apple and RIM
However, for the purposes of this paper we have defined success as a firm's ability to
strategically position its self as a high-end premium brand, with a reputation as the market leader
in quality, customer satisfaction and steadily growing market share. Using these metrics, we
propose that clearly Apple is the more successful of the two.
Since the introduction of the iPhone in 2007, Apple has been able to effectively market
the product’s main differentials as an all-in-one communicational device, revolutionary wide
touch screen, large storage space, customizable software, enhanced user experience and Apple-
2

3. made. Apple’s marketing strategy is the following has focused on pricing, a hybrid distribution
channel, unique selling proposition (innovation, customization, personalization, connectivity,
and music, photos and video storage.) The firm created an exclusive feel for the product through
its communication strategy and plan, while limiting the launch of the device to one model per
year (with 3 memory capacities) and selling them in limited locations: Apple Online Store,
Apple Store and limited service provider outlets. The premium price point for the device, which
retails for $699-899 off-contract and $199-399 on- is based on its technological offering and a
huge Apple fan base. Apple does not provide discounts to any retailers. Released as the first
commercially available smartphone in 2003 and now well into maturity within its lifecycle
BlackBerry RIM’s current marketing strategy offers a host of different models, launching since
2007 around 37 models. BlackBerry is retailed through many outlets including: RIM stores,
design dealer stores, service carrier stores, as well as ‘Big Box’ retailers like Walmart. Subject
to severe competition and downward pricing pressure, RIM retails its phones for a more
affordable $399-549 off contract/ $0-299 on contract. Until 2011 the firm’s launch publicity was
relatively low key with little hoopla, recently the firm has begun to issue press releases and
launch and customer introduction events in developing markets such as Indonesia.
In terms of customer satisfaction Apple’s IPhone leads the market. For the last two
years, it has ranked number one in customer satisfaction, receiving 5/5 in all areas of customer
satisfaction. It received top ratings in performance, ease of use, physical design, and features.
Over the past 5 years,
Apple’s strategy has
allowed it to steadily gain
market share. Figure 1
3

4. shows how Apple's market share has risen steadily since iPhone’s introduction in 2007. Having
peaked in 2009, it is apparent that RIM’s market share has markedly declined from its zenith.
Figure 1 Cell Phone Market Share
Industry / Environmental Analysis
Smartphones were once the
domain of the business user,
accounting for approximately
100% smart phone market. Within
the last five years this has changed,
as consumer and business needs have converged. With the price of smartphone services falling
more consumers began to purchase smart phones. This changed the industry because consumers
did not care for features that were once considered critical for business. Now features like a
marketplace with access to a large library of productivity apps and a large touchscreen are
considered important; the features of the phones we now driven by the larger consumer market
that is hungry for gaming, entertainment, and mobile web browsing.
The smart phone industry was originally focused at providing business users with a tool
that enabled them to stay connected anywhere. Companies like RIM developed specialized
software and hardware that addressed the needs of the business user (BlackBerry Enterprise
Server). As the first in market with little or no competition, RIM became the market leader in
smart phones. However, as the cost of smart phone service fell, the lower cost of service enabled
consumers to purchase smart phones; today 40% of iPhones sold today are used for business use.
This has led to a shift in the business smart phone industry, it became more consumer driven;
consumers were demanding ease of use and more applications to personally assist them. The
need for more applications caused a second shift: the development of an application marketplace.
4

5. The application marketplace has allowed smart phone users to customize their devices
with 3rd party software. Apple was one of the first companies to launch its App Store and one of
the first cell phone makers to provide support for 3rd party developers. The iPhone now has the
largest library of 3rd party software of any phone. Consequently App Store and its large library
of software are now one of the key features of the iPhone.
The App Store and the availability of a vast library of applications began a third shift in
the industry; adoption of the iPhone by business users. When the iPhone was introduced in 2007
was initially marketed as a phone for gadget techies. The availability of the App Store and
Apple’s support for third-party developers, has allowed developers to customize the phone to be
used for more than entertainment purposes; users could be productive. Business users could
download apps that permitted the phone to view, print, edit, and create office documents. More
importantly, these applications could be added anywhere, at any time.
The smartphone industry has evolved, to the point where business users and consumers
demands have converged. All users now demand phones that are easy to use, constantly
connected and provide a marketplace where applications can be purchase and added to the phone
on the fly.
Technology Analysis
The cell phone industry has evolved from an environment where cell phones were merely mobile
telephones permitting users to place calls to multi-use devices (cameras, mini PCs, personal
assistants). This change is being driven by a change within the industry from a business user
focus to a consumer focus.
In the recent past, many of smartphone features were driven by the business user needs.
The need to perform tasks such as checking e-mail or texting, lead to the integration of a physical
5

6. keyboard. The need to be connected to the home office lead to companies like RIM developing
support for Microsoft’s Exchange server via its BlackBerry Enterprise Server. RIM marketed
and positioned itself as the business users cell phone of choice. Boasting the best support for
Exchange server and the industry’s best on phone keyboard.
In 2007 Apple introduced its iPhone as a phone for consumer gadget lovers and changed
the industry. It was the beginning of the consumer driven smart phone design. Google followed
Apple with the Nexus One (Android) phone and now Android and iPhone smart phones account
for over 75% of the smart phone market. Although both these products were initially focused at
the consumer market, they have been migrated over 4 to 5 generations (approximately 3 to 4
years) to work in the corporate environment. Apple’s pioneering strategy of designing consumer-
focused phone that could be used for business resulted in changes to the design of the phone and
technology integrated into it. Previously important business features such as physical keyboards
are gone, now replaced by touchscreen keyboards. A touchscreen permits the user to do more
with the phone, transforming it into a full-screen multimedia entertainment device. Users can
play games, watch movies, listen to music, or read a book. Apple has continued to push the
development of the consumer driven phone design through its use of the App Store.
Apple’s App Store was originally conceived as a marketplace for 3rd party software. It
was initially focused on consumers, but now includes many applications for business users.
Business users can use the App store to customize their phone into a Swiss Army knife for the
business user. One example is the development of high-resolution cameras. Initially developed
for taking pictures, developers have created apps that allow business users to perform tasks such
as video conferencing on the go and the scanning of documents and business cards. The
iPhone’s ability to use WIFI has allowed 3rd party developers to develop apps that allow the
6

7. phone to print documents and scan full color documents right to the phones. Apple’s support for
3rd party developers has allowed developers to build new features into the IPhone Apple did not
develop itself.
Customer analysis
In order to direct our analysis we selected a target segment identified as business users of mobile
device technology. The age demographic that we looked at spanned the usual work age of the
population 18 – 65 years. In order to inform the direction of our research we conducted a “quick
and dirty” review of comments appear on Twitter. We tabulated the comments for #BlackBerry
and #iPhone search terms ranking them as wants, needs, observations, and complaints.
This qualitative data guided the design of the focus group. Focus groups were made up of
a mix of 7 participants selected for their behavior (loyal, switching behavior and first time use.)
The sessions, run by a facilitator and recorded by two observers, lasted 40 minutes and included
an icebreaker. Participants were encouraged to respond to three main question areas focusing on
product likes, dislikes and unmet needs/improvements.
Using the observations made by the focus group as guidance, the group created an
anonymous online self-administered questionnaire with URL access. The survey was marketed
via the group’s own personal and business networks, including dissemination via Facebook,
Twitter, and a CraigsList.com listing. The group also incentivized full participation by offering
free entry into a $25 Starbucks gift card draw. Data collection took place between May 11-15
yielding 118 responses. The group based its analysis on 108 completed surveys. The screening
question asked respondents to indicate if they had ever owned an iPhone or BlackBerry. Other
variables were measured using closed and open ended questions. Data analysis consisted of one
way tabulations of every variable, listing frequency and percentage of the dependent variable,
7

8. and 2x2 cross tabulations between the screening question and other independent variables. A
printout of the questionnaire and cross-tabulations are included in appendix A.
Segment behavior
The survey asked six background segmentation questions including ownership of iPhone of
BlackBerry models, occupation, gender, age, education, and income. It also asked four
behavioral segmentation questions including amount of use, percentage of spent using, reasons
for using, and how users had acquired their smart phone (via personal resources or supplied by
business.) Upon answering the segmentation questions, the respondents were asked to share
their level of satisfaction and what features they liked best and least. The next section sought to
understand what features were important to users when selecting a smartphone. The next section
was made available only to those users who were current or past iPhone or BlackBerry users to
ascertain what attributes their decision to purchase their phones in the past. Finally respondents
were asked to specify at least one improvement to their current smartphone.
The question regarding smartphone ownership indicated that 66% respondents had
either owned or had owned an iPhone at some point, and 62% had owned, or owned a
BlackBerry. In terms of the share 27% of BlackBerry users own or have owned an iPhone in the
past, whereas nearly twice as many (53%) of iPhone owners have own or have owned a
BlackBerry. The gender split for iPhone revealed a slight bias towards a younger and slightly
more affluent user group, with a bias toward male ownership (60%) and BlackBerry (male
ownership 52%) for both brands. However, considering the small sample size we would seek to
confirm this in further research but will disregard its effect for the purposes of this study. Based
on the volume of survey results, we selected key areas to focus our analysis on which include
customer “likes and dislikes”, overall satisfaction, switching, and brand perception.
8

9. Our survey measured 15 dimensions of “likes”, which influenced the purchase of the
current smart-phone in use and 17 dimensions of “dislikes”. We created table 2 summarizing the
top 5 customer responses side by side comparing iPhone and BlackBerry products.
iPhone
Users Blackberry
Users
Rank
Order Likes
(Influenced
Purchase) Dislikes Likes
(Influenced
Purchase) Dislikes
Battery
l ife
i s
too
short
and
Other-­‐
Usability
and
Access
to
Apps
(54%
#
1 Battery
l ife
i s
too
short
(40%) Business
Use
(68%) Few
Apps/Screen
Freezes/Slow
each)
web
connectivity
(40%
e ach)
Other-­‐
Employer
i ssued/Free
BBM
#
2 Touch
Screen
(51%) Network
coverage
i s
poor
(33.33%) Camera
(20%)
with
users
i n
other
countries
(32%)
Brand
Perception
and
Referral
#
3 Not
durable
e nough
(20%) Usability
and
Keyboard
(28%
e ach) Styling
i s
old-­‐fashioned
(16%)
(47.5%
e ach)
Network
coverage
i s
poor,
Not
Hardware
and
Business
Use
(42.4%
#
4 Monthly
cost
(18.33%) Hardware
(24%) durable
e nough,
Keyboard-­‐buttons
each)
too
small
(12%
e ach)
Access
to
own
music
and
Camera
Other-­‐
Autocorrect/Outlook
Design
appearance
and
Antenna
#
5 Durability
(20%)
(39%
e ach
) functions
(13.33%) issues
(8%
e ach)
Table
2.
Side
by
side
comparison
of
top
likes
and
dislikes
by
smartphone
We found the results revealing, as the #1 “likes” for iPhone regarding its accessibility to
an extensive selection of applications was one of the #1 “dislikes” for BlackBerry users, as their
smart phone is limited on the number of applications available for download. It is clear that this
population of BlackBerry owners’ purchase decisions was influenced by Business use, as 68%
cited this as the #1 “likes”, which influenced the selection of their BlackBerry device. We also
thought it noteworthy that iPhone’s Brand recognition and Referral was rated more than 47% by
iPhone owners as a major reason why they made their purchase. Many respondents indicated
they decided to take the plunge to purchase their iPhone after friends recommended how easy the
device was to use. For example, one person commented in our survey that “I chose my current
smart phone because I had to see what all the iPhone hubbub was about” while others wrote,
“Everyone seemed to enjoy the iPhone” and “The brand is popular and it had great reviews”.
After understanding the iPhone and BlackBerry customers’ “likes” and “dislikes”, we
turn our research to both customer segments’ overall satisfaction with their smart phone. When
asked “How satisfied are you with your current smart phone?” 48.3% of iPhone owners were
9

10. found to be Very Satisfied, while only 23% of BlackBerry owners responded they were Very
Satisfied. In fact, the majority of BlackBerry owners reported they were Satisfied with their
device, interestingly though, no BlackBerry respondents reported being dissatisfied with the
product. Table 3 below summarizes our survey findings about customer satisfaction.
Based on these results, it appears that
Apple’s iPhone devices are delighting
customers, while RIM provides
functional smart phone devices, but is
not differentiating the BlackBerry
brand from its largest competitor. We
believe the level of customer
satisfaction with the BlackBerry
brand is directly correlated to the secondary market research presented earlier which showed the
BlackBerry brand continuing to lose market share to iPhone in the smart phone market. We
thought it important to take our analysis a step further to understand how these satisfaction
results may impact BlackBerry customers’ loyalty to the brand or potential desire to switch, and
also to confirm whether iPhone customers are loyal to the brand or looking for the next block
buster device to hit the market.
Our survey results showed 83.3% of iPhone owners are not thinking of switching while
only 42.3% of BlackBerry owners are committed to their phone. Of the 13.3% of iPhone users
that indicated “Yes” for switching, their text comments showed all but one respondent is
considering switching to a newer version of the iPhone and not to another brand. This
demonstrates the strong customer loyalty of iPhone users to the brand. Of the 38.5% of
10

11. BlackBerry owners that indicated “Yes” for switching, their text comments showed all but two
respondents were considering switching to an iPhone. This shows that overall brand loyalty to
BlackBerry is low, and we believe the surveyed BlackBerry owners would possibly switch
sooner if their employers offered the iPhone as an option for their company issued phone.
Since value perception is primarily a combination of quality, service, and price, we
wanted to learn more about how BlackBerry customers perceived the BlackBerry brand and the
iPhone brand, as well as how iPhone customers perceived the iPhone brand, and the BlackBerry
brand. Using the results presented in the tables below, it is clear that BlackBerry users perceive
the BlackBerry brand as Business, Professional, Connected, Convenience, and Value. iPhone
users also view BlackBerry as Business and Professional, but have additional perceptions about
the BlackBerry brand such as Dated, Low Tech, and Cheap. iPhone users view the iPhone brand
as Convenience, High Tech, Entertainment, Cool, Connected, Fun, Professional, Business, and
Friends. Likewise, BlackBerry users view the iPhone brand as High Tech, Entertainment, Fun,
Cool, Connected, and Convenience, but fewer BlackBerry users perceive iPhone as Business or
Professional. This perception may correlate with why many companies are slow to adopt the
iPhone as the standard for employer provided smart phones, however, additional research beyond
this survey would be required to make that determination.
11

12.
Figures 2 & 3 How BlackBerry and iPhone customers perceive BlackBerry and iPhone
Product/Service Analysis – Features including pricing
The Apple iPhone is sold globally, but has highest brand recognition and penetration in Apple’s
main market of Europe and North America. Domestically, the iPhones come in 3 standard price
options based on hard-drive size and do not allow for memory upgrades. There is one phone that
is available that is not the latest model and Apple only distributes it in the 8GB capacity.
Version/Pricing
16GB
32GB
64GB
iPhone 4s with Contract
$199.00
$299.00
$399.00
iPhone 4s w/o Contract
$649.00
$749.00
$849.00
iPhone 4 with Contract (only 8GB)
$99.00
Table 4 iPhone version and pricing
BlackBerry phones come in various models and pricing with expandable memory upgrades
available. BlackBerry phone are available via certain network provider (ATT, Verizon, Sprint,
etc.) and models vary amongst carriers. Customers have the option of buying older model
phones at a discount and through alternative distribution channels, such as Best Buy, Target, and
RadioShack, table 5 demonstrates the variety of plans available at AT&T.
Version/Pricing (AT&T)
Bold 9900
Curve 9360
Torch 9860
BlackBerry with Contract
$199.99
$29.99
$99.99
BlackBerry w/o Contract
$549.99
$379.99
$449.99
Version/Pricing (Verizon)
Bold 9930
Curve 9370
Torch 9850
BlackBerry with Contract
$229.00
$99.99
$179.99
BlackBerry w/o Contract
$509.99
$409.99
$459.99
Version/Pricing (Sprint)
Bold 9930
Curve 9350
Tour 9630
12

13. BlackBerry with Contract
$199.99
$49.99
$99.99
BlackBerry w/o Contract
$499.99
$349.99
$249.99
Version/Pricing (Best Buy)
Bold 9900
Curve 9300
Torch 9810
BlackBerry with Contract
$99.99
N/A
$0.01
BlackBerry w/o Contract
$699.99
$349.99
$599.99
Table 5 BlackBerry version and pricing at AT&T stores
5Ms Advertising Analysis):
iPhone BlackBerry
Mission iPhone advertising is centered on RIM informs, persuades, and reminds
persuading and informing business customers of the functionality of its
customers about the product BlackBerry products.
features and functionality.
Features such as “Siri” and the BlackBerry is trying to market and create
“iCloud” are portrayed in a brand awareness amongst younger
sophisticated, yet cool-hip generations, as seen with its “Be Bold”
manner. campaign using cartoon superhero’s, of
which RIM was hoping to associated with
younger users.
With the slogan “the best
business decision you’ll ever
make” the Apple iPhone is
targeting both business user and
the younger generations.
Message The iPhone message is BlackBerry’s message is focusing around
structured around informing the business user with slogans such as “Be
customers about the latest Bold”, We need tools, not toys”, and “I’m
functionality and features about action, not distraction”.
available on the newest products.
Television and radio Along with the established business user,
commercials use celebrities to BlackBerry is trying to appeal to younger-
endorse the product, and shape hip generations with advertisements
the message around a featuring younger business entrepreneurs,
sophisticated and cool-hip such as DJs and musicians, of which need
product that is fun to use. professional tools to perform their work.
BlackBerry is also pushing its security
13

14. features.
Media The iPhone advertising is pushed BlackBerry utilizes traditional and new
through both traditional and new media to advertise its products. (including
media outlets (including Facebook and Twitter.)
Facebook and Twitter.)
From television advertising to Much of the advertising is in conjunction
internet advertising, Apple with a specific service provider or
remains consistent with the distributor, such as AT&T or Best Buy.
message and uses features, such
as specific music in that carries
across the different media.
Media advertising such as TV, billboards,
and Web 2.0 are all utilized by RIM and
their BlackBerry products.
Money iPhone is currently leading the BlackBerry is losing market share, and
smartphone industry in market appears to be increasing its advertising
share, however it continues to budget, with advertising expense, which
increase its advertising budget. includes media, agency and promotional
expenses totaling $1.1 billion, $791 million,
$719 million for 2011, 2010 and 2009,
respectively.
Advertising expense was $933M,
$691 million and $501M for
2011, 2010 & 2009, respectively.
Measurement iPhone has the largest share of The BlackBerry product is quickly losing
the market with a strong loyalist market share to various other smartphone
following and growing number providers. Although loyalists remain,
of switchers. switching is becoming a large problem for
BlackBerry.
Customer satisfaction appears to Many customers have dissatisfaction with
high with features like the Apple the lack of creative new features and the
Store providing support service, mediocre internet and app functionality, as
but also enticing new sales. compared to many of the new phones,
including the Droid, Nokia, and iPhone.
Table 5: 5M Analysis and comparison
14

15. Distribution/Sales force Analysis
In researching distribution/sales force for the iPhone and BlackBerry, several service provider
stores were visited, such as AT&T and Verizon. One reoccurring observation was the iPhone
was readily available and displayed in prime viewing locations in stores, while the BlackBerry
phones were not. Additionally, both phones took a back sit to the Droid and Nokia phones when
it came to prime shelf space.
When visiting the Verizon store, no BlackBerry products were displayed on the sales-
floor. When asked about the product, the salesmen indicated they had some in the back, but they
were not that popular anymore. He also indicated that BlackBerry hadn’t released anything new
and exciting in quite some time. In discussing the iPhone, the salesmen indicated that it was a
really good phone and that it could provide the emailing and texting, as well as superior data.
When visiting an AT&T Store, the salesmen discussed the benefits of the BlackBerry
phone and indicated that it was a good phone for email and texting, but not good with the data.
The key feature of the BlackBerry was the keyboard and the customer’s ability to type more
efficiently. A few of the phones were located on the sales floor, but not in the prime locations.
The salesmen indicated that the iPhone was also a good email and texting phone but had a strong
advantage over BlackBerry in the data handling and functionality.
When visiting Costco the salesmen stated to rsearchers, “You don’t want the BlackBerry,
you should look at the Droid phone, and it does everything the BlackBerry does and more.” He
then continued to push against a BlackBerry purchase. Even when brought back to the topic of
the BlackBerry, the salesperson begrudgingly looked up the availability of the phone on the
computer and indicated the BlackBerry Bold could be mailed to me with a week or two. When
15

16. bringing up the iPhone, he once again pushed the Droid phone, and pushed that it was the best
phone on the market.
Subsequent anecdotal research online indicated to us that the salesman’s enthusiasm to
sell Droid over iPhone and Blackberry is related to the salesperson incentivising programs in
place – resulting in a top down push from Droid. iPhone not needing to incentivise due to its
popularity and loyalty is pulling customers towards it, whereas BlackBerry appears to be in a
marketing limbo with respect to this channel.
Sales Promotions
iPhone sales its phone through three major networks service providers (AT&T, Sprint,
Verizon) and some brick and mortar distribution. Regardless of the distribution channel, the
iPhone had very formal pricing structure. Promotions are very rare and discounts are limited and
coincide with new version and releases. Verizon was offering only one discounted iPhone, the
iPhone 4 (8GB), otherwise customers had to go with the iPhone 4s (16GB, 32GB, 64GB).
Although Apple limits its iPhone promotions, it provides additional services, such as the
Apple Store and iCloud that add value to the customer. BlackBerry has a wide swath of sales
promotions and is available through numerous distribution channels. In addition to the channels
the iPhone was sold through, BlackBerry phones could be purchased through big box retailers
like Best Buy, Target, and RadioShack. Promotions are often and vary among the distribution
channel. With a confusing array of sales promotions on we would submit that this could also
confuse salespeople who will most probably sell customers the product with the easiest “sell”.
16

17. Figure 4 SWOT BlackBerry
SWOTs
BlackBerry’s strengths are its brand, which is strong in the US, Europe and in developing
markets worldwide including the Far East. It is associated with business and viewed as a serious
business tool. It is priced as a more affordable competitor to other smart phones such as iPhone
and Android phones. The biggest weakness for BlackBerry is the consumer perception that it is
a dead platform - with consumers and purchasers for corporates. Another weakness includes its
closed operating system, which until late 2011 did not support 3rd party apps (currently 60,000
are available, with 2Bn downloads to date.) Opportunities for BlackBerry include aggressive
marketing in developing countries as the lower-cost alternative to Android and iPhones phones.
17

18. Threats for Blackberry come primarily from the iPhone and Android phones. Both of who have
consumed, at BlackBerry’s expense, large pieces of mar÷ket share (over 75%).
Figure 5 SWOT iPhone
iPhone strengths include brand, Apple is viewed as a status symbol and the iPhone is perceived
as being high tech, a market leader primarily because of its App Store (600,000 apps available,
85Bn downloads), and its support from 3rd party app developers. iPhone weaknesses include
perceptions of fragility, expense, and difficult to use as a basic phone. It is also not
ergonomically optimized (holding of items in an unsupported position can result in “Gorilla
arm”.) Opportunities include expanding the corporate market, expanding into developing world
servicing business and consumer users. Due to Apple’s size it also benefits from its clout, able to
18

19. influence partner firms like software developers. Primary threats are that it operates in a highly
competitive environment requiring constant innovation. Also competitors with a lower price
point with features mirroring many of the same functions and features of iPhone may challenge.
Recommendations:
Our research shows iPhone is in an enviable position of having an extremely loyal, heavy
using customer, therefore we recommend that Apple a) continue focusing its current target
populations and allow the popularity of iPhone to work the product into large corporations b)
continue to develop new product differentiators i.e. natural language processing and interactivity,
also other customization / personalization features, like those foster “identity” characteristics c)
we would also recommend considering the user preferences of the next generation of users – use
of social media as opposed to email, and finally d) mid-long term we would expect the delivery
of a seamless “it just works” experience – allowing the sharing of content across all Apple’s
mainstream products like iPhone, iPod, iPad and Macs.
On the other side of the coin, the challenge facing RIM is that of retaining customers long
enough to reduce “churn”. Recognizing that once a customer has switched regaining them is
difficult; the firm needs to dis-incentivize switching quickly so as to stem the flow of customers
leaving. In the short term therefore we would advise tying in customers with attractive pricing
and upgrade options, this would prove expensive to the firm’s bottom line but this would ‘buy’
RIM time to reposition BlackBerry to its customer base in the following ways over the next 3
months to 18 month time frame. We propose revisiting the brand’s product positioning,
slimming down the product line up, and communicating an elegant “less is more” message. We
would also refocus on BlackBerry’s brand image to communicate its “mastery of messaging
tools” - extolling the hardware’s reliability, durability, security, and purely business tool focus –
19

20. including BlackBerry Messenger, battery life and keyboard. We recommend that RIM drop its
attempt to compete head on with iPhone and aggressively differentiate itself as the premier
serious business communications device - not an iPhone “Angry Birds” infotainment player or
“surfer dude” throw away fashion accessory. It could do this with celebrity endorsement and
limited special editions with luxury brand associations (bearing in mind the aforementioned
slimmed down product line-up.) Finally, considering the amount of competition in the over-
saturated US market, we advise that RIM should continue to target and grow its market
penetration in new markets outside of North America (especially developing countries such as
Indonesia) where its brand is better known.
20

21. Appendix A
iPhone versus BlackBerry Survey
Q1. Dear Survey Taker,
Thank you for taking part in our market research project. We estimate that this survey will take
between 7-9 minutes to complete, and to thank you for your participation, we're entering every
fully completed questionnaire into a free sweepstake for a $25 Starbucks gift card.
This survey will close at 11:55pm (PT) May 15th, and the draw will take place on May 16th, the
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Q2. Electronic Consent Form
Q3. Have you ever owned an iPhone smartphone?
Q4. Have you ever owned an BlackBerry smartphone?
Q5. Please select your current brand of Smartphone:
Q6. Please select your network provider:
Q7. How long have you had your current phone (in months)?
Q8. Is there another brand or model you are thinking of switching to:
Q9. In 2-3 sentences, please explain why you chose your current smartphone.
Q10. How satisfied are you with your current smart phone?
Q11. What features of your smartphone, if any, do you like LEAST ? (Please select all that
apply)
Q12. How important are the following features to you when selecting a new mobile device /
Smartphone ?
Q13. What do you primarily use your device for?
Q14. Which of the following iPhone models have you owned in the past and/or currently own?
Q15. What or Who influenced your decision to select an iPhone?
Q16. Select the attributes that you more closely associate with iPhone
Q17. Which of the following Blackberry models have you owned in the past and/or currently
own?
Q18. What influenced your decision to select a Blackberry?
Q19. Select the attributes that you more closely associate with Blackberry
Q20. Please specify at least one improvement you would like to see in your current smartphone:
(For example, higher resolution camera, better memory, music player, better/more fashionable
range of accessories, video calling, multiple tasking apps open as windows, games, etc.);
Q21. On a typical week many hours do you spend using your smartphone?
(For example: checking email, texting, phone calls, gaming, Internet searches, using Apps, etc.)
Q22. What percentage of your time is spent on the following activities
23. Was your device provided by your employer?
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22. Q24. What area primarily best describes your occupation? Please choose one:
Q25. Please select your age from the ranges shown below.
Q26. Gender:
Q27. How much education have you completed?
Q28. Please indicate your annual income:
Original survey can be accessed at www.Qualtrics.com
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