So, if you follow the BlackBerry industry at all you might be wondering what tangent am I about to go off on because you know that RIM already offers more than one BlackBerry at a time. What RIM doesn’t do, however, is release more than one BlackBerry at a time. Oh, sure. Each BlackBerry model comes out in 3 or 4 different variants, but, at the end of the day BlackBerrys pretty much just come out one new device at a time.
This snails pace BlackBerry release strategy has worked well for RIM. They recently cracked the top ten list for global handset manufactures, however, their 1.4% global market share pales in comparison to market leader Nokia who has about 40% of the market. Not only does Nokia sell roughly 30 times as many devices as RIM they release a lot more devices each year than the just one or two that come out from RIM. It may not be 30 times more but the number is a lot closer to 30 than it is to 2.
Now, to be fair, the BlackBerry is in a subcategory of all phones,smartphones, of which it is number one. I have to ask the question, though, would the BlackBerry enjoy a bigger piece of the pie if it had more variety. There has to be a tipping point where the number of device sales and revenue increases with an increase in the number of styles and form factors that come out at a particular time.
I was secretly hoping for a Kickstart release next to the 9000 at WES. Vain, I know.
As you pointed out, the BlackBerry is already number one when it comes to smartphones but that 1.4% is a very small slice of the pie. Granted, the smartphone market is growing, I would gather that it is growing fastest with consumers who want the coolest new phone. Consumers, unlike business users aren’t going to wait a year to get a BlackBerry in the form factor they want if there is a similar device that catches their eye and has the features they want.
I think that if 3 or 4 different BlackBerrys came out all at once that it could actually be a leg up on the new iPhone coming out. I really want a phone with a touch screen that I can get email on so I am going to look at it. I would probably stick with the BlackBerry though if they had one with the touch screen.
The essential point is to understand why RIM became the number one when it comes to smartphones: because they just understand how to make smartphones that are excellent for personal information management (email, calendars, notes, tasks) because they have years of experience. When I use my Blackberry sometimes I just think “wow, the developers have even been thinking about that one (especially with regard to the menu structure)”.
Now from a marketing perspective there are obviously three options:
* sell the same product in a different market (which they are doing, geographically and also in consumer smartphone markets)
* develop new devices for existing markets (there must be some potential left in the enterprise market)
* develop new devices AND new markets (i.e. “regular” mobile phones for the average communication needs)
The third option is obviously the one with most growth potential but also the one where RIM has little or no experience. When developing mobile devices for consumer markets, suddenly design, shapes and colors become essential drivers for buying decision and even though RIM has shown that they are good (Curve and BB9000 as an example) I am not yet convinced that they have the capabilities to strive with new products in new markets.
In order for RIM to sell more devices (and launch more products) I think they should strive for two things:
* Understand how their devices and their software platform needs to be adopted for emerging markets (like Nokia is doing in Africa and Asia)
* Focus on additional services that can help consumers and business users get even more out of their blackberry (Google Maps and GPS Tracker are killer apps, improve media management on the BB – I still know a lot of people who struggle with putting music on the BB)
* Think about their service platform strategy. Nokia bought several companies to integrate different mobile services into their own “Ovi” suite. RIM should build their own “service platform” that offers the core services (maps, media, photo, …)
These are just a few thoughts that come to my mind but at the end of the day, RIM should remember where they came from and that they are a smartphone company that builds fashionable mobile devices and not a fashionable mobile device company that (also) builds smartphones.
Bernhard makes several great points…it’s hard to top that.
I would just add this: Nokia has this huge market share overall not just because they make so many types of phones, but also because a good share of these phones are sold for very little or given away for free with contract.
I don’t know that RIM would want to start dumping all types of cheap phones on the market to build share.
Also, I think RIM always has to be careful, like all companies, in trying to be something it is not and abandoning its core strengths. Indeed, all companies have to balance between product expansion and product integrity; ideally both can be achieved.
Personally, I’d rather have RIM continue to release higher end smart phones and leave it to Nokia to release all the free flip phones across the world.
As RIM grows, I believe their line of phones should as well. We can all see from this board that we have different preferences when it comes to which BB we personally like. Certain BB’s may fit the needs for one person. Certain services, bells and whistles appeal more so to others. As RIM hits the consumer market, diversity is the key to their success. Palm kept their line pretty straight forward and minimal, which is a good history lesson for RIM if they want to success in the smart phone arena. The more options, the more appeal it brings to the consumer.
At the same time, RIM pretty much has a good hold on the corporate market. Better service, applications, and enhancements for processing applications will continue such growth in that market.
I don’t think it’s in RIM’s best interest to shoot for companies like Nokia. ‘Thought’ made a good point about how Nokia has a strong marketshare due to the giveaways and price points that are being offered. It’s not in the business model for RIM to give phones away uless they were in the ‘Palm’ situation of losing everything.
What would be interesting to see is if RIM offeres/pushes the BB service to other phones/manu’s such as Apple. Other phones may outsell RIM, but the BB application and service would be equal to Microsoft and what they have on the operating system. The ratio of consumers/users to server would be a fantastic ROI. But for now, more models is certainly a good idea in my opinion, for company growth and consumer satisfaction.
I don’t know what “Thought” is referring to but he is completely mistaken and obviously does not know the market.
He says that “a good share of these phones are sold for very little or given away for free with contract?” This is pretty much only done in the US, by the other vendors (including RIM) more so than Nokia, as Nokia has their lowest market share in the US.
Why Nokia has a huge market share is that they make phones for just about EVERY market segment, in EVERY market globally. That is a completely different thought process and business process from what RIM currently does. I think that is the author’s point – it will take some kind of mindshift for RIM to grow, but they don’t want to lose what they do well, what differentiates them.
“What??” does bring up a good point in that phone subsidies for contracts may be used less outside the US market, and my perspective is decidedly shaped by my experience in that US market.
However, while not definitive, I just checked the Vodaphone UK website, and they currently offer 14 Nokia phones with a monthly contract plan, and of those 14 phones it seems that 12 are sold for the price of “free.”
So I do admit ignorance in understanding the nature of all non-US markets, but I still believe that a huge number of Nokia phones are sold throughout the world at a reduced subsidized cost, even for “free.”
Now that does not mean that Nokia does not make quality phones…they most assuredly do. And no doubt part of their market share is indeed due to the fact that they release all types of phones for virtually every type of user. But again, I do think a part of their success is having low priced offerings in so many markets.