Marketing Management: Marketing Strategy Comparison - Apple's iPhone versus RIM's BlackBerry

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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

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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-

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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

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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.

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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

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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

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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,

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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.

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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.

Rank Order Likes (Influenced Purchase) Dislikes Likes (Influenced Purchase) Dislikes

# 1Usability and Access to Apps (54%

each)Battery life is too short (40%) Business Use (68%)

Battery life is too short and Other-‐ Few Apps/Screen Freezes/Slow web connectivity (40% each)

# 2 Touch Screen (51%) Network coverage is poor (33.33%)Other-‐ Employer issued/Free BBM with users in other countries (32%)

Camera (20%)

# 3Brand Perception and Referral

(47.5% each)Not durable enough (20%) Usability and Keyboard (28% each) Styling is old-‐fashioned (16%)

# 4Hardware and Business Use (42.4%

each)Monthly cost (18.33%) Hardware (24%)

Network coverage is poor, Not durable enough, Keyboard-‐buttons

too small (12% each)

# 5Access to own music and Camera

(39% each )Other-‐ Autocorrect/Outlook

functions (13.33%)Durability (20%)

Design appearance and Antenna issues (8% each)

iPhone Users Blackberry Users

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

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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

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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.

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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



Version/Pricing (Sprint) Bold 9930 Curve 9350 Tour 9630

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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 persuading and informing customers about the product features and functionality.

RIM informs, persuades, and reminds business customers of the functionality of its BlackBerry products.

Features such as “Siri” and the “iCloud” are portrayed in a sophisticated, yet cool-hip manner.

BlackBerry is trying to market and create brand awareness amongst younger generations, as seen with its “Be Bold” 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 structured around informing customers about the latest functionality and features available on the newest products.

BlackBerry’s message is focusing around the business user with slogans such as “Be Bold”, We need tools, not toys”, and “I’m about action, not distraction”.

Television and radio commercials use celebrities to endorse the product, and shape the message around a sophisticated and cool-hip product that is fun to use.

Along with the established business user, BlackBerry is trying to appeal to younger-hip generations with advertisements featuring younger business entrepreneurs, such as DJs and musicians, of which need professional tools to perform their work. BlackBerry is also pushing its security

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features.

Media The iPhone advertising is pushed through both traditional and new media outlets (including Facebook and Twitter.)

BlackBerry utilizes traditional and new media to advertise its products. (including Facebook and Twitter.)

From television advertising to internet advertising, Apple remains consistent with the message and uses features, such as specific music in that carries across the different media.

Much of the advertising is in conjunction with a specific service provider or distributor, such as AT&T or Best Buy.

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 smartphone industry in market share, however it continues to increase its advertising budget.

BlackBerry is losing market share, and appears to be increasing its advertising budget, with advertising expense, which 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 market with a strong loyalist following and growing number of switchers.

The BlackBerry product is quickly losing market share to various other smartphone providers. Although loyalists remain, switching is becoming a large problem for BlackBerry.

Customer satisfaction appears to high with features like the Apple Store providing support service, but also enticing new sales.

Many customers have dissatisfaction with the lack of creative new features and the mediocre internet and app functionality, as compared to many of the new phones, including the Droid, Nokia, and iPhone.

Table 5: 5M Analysis and comparison

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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

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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”.

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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.

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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

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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 –

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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.

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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 winner will be notified by email the same day. The last section of the survey will provide you with more details on how to be entered into the drawing. On the next page is our informed consent form, please read this through and submit your agreement before starting this survey. Thanks again, and Good Luck

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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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