Research in Motion Ltd - Consumer
Electronics - Canada
Research in Motion Ltd
Strategic Direction
·
While the BlackBerry is
expected to remain the leading smartphone choice for enterprise users in
Canada, Research in Motion (RIM) is looking at expanding its presence among
Canadian consumers, in particular high-end consumers. In fact, over the next
several years, Apple and RIM will be targeting the same customer base.
·
However, the current battle
between Apple and RIM can also be viewed in a larger context as an emerging
showdown between Apple and RIM smartphones against conventional mobile phones,
manufactured by Nokia, Samsung, and Motorola. The projected increase in
smartphone demand is expected to provide both Apple and RIM with strong growth
opportunities at the expense of well-established mobile phone players.
·
It was reported that around 65%
of current smartphone owners in Canada would consider to purchase another
“smart” model as their next phone. While smartphones will continue to grow in
popularity, their corresponding monthly service charges are definitely not a
hit with consumers. At present, smartphone owners pay about double for their
monthly services ($97 per month) compared to owners of “regular” mobile phones
($51 per month). Unless, monthly services for smartphone plans become more
affordable for Canadian consumers, this discrepancy in pricing plans may have
the potential to dampen demand for BlackBerry devices.
Key Facts
|
Full name
of company:
|
Research in
Motion Limited
|
|
Address:
|
295 Phillip
Street, Waterloo, Ontario N2L 3W8, Canada
|
|
Tel:
|
+1
519-888-7465
|
|
www:
|
www.rim.com
|
|
Activities:
|
Portable
consumer electronics
|
Source: Euromonitor International from
Company reports, Trade press
|
|
2006
|
2007
|
2008
|
|
Revenue (Canadian sales – US$ million)
|
$222.5
|
$438.3
|
$887.0
|
|
Net
profit (company wide – US$ million)
|
$631.5
|
$1,293.8
|
$1,892.6
|
|
Number of
employees (company wide)
|
6,254
|
8,387
|
12,800
|
Source: Trade press, Company research
Company Background
·
Since its founding in 1984, RIM
has emerged to become one of Canada’s leading high-tech companies. The company
designs, manufactures and markets wireless solutions. RIM provides integrated
hardware and software solutions for access to time-sensitive information
including email, phone, short message service, Internet and intranet-based
applications.
·
Based in Waterloo, Ontario, RIM
operates offices in North America, Europe and Asia Pacific. The company’s
common shares are listed on the Nasdaq and the Toronto Stock Exchanges.
·
RIM’s primary revenue stream is
generated by the BlackBerry wireless solution, which is comprised of Blackberry
smartphones, software, and services.
·
As of 2009, the BlackBerry
subscriber base stood at 25 million users worldwide.
·
Sales within Canada amounted to
US$887 million for the 2009 fiscal year (ending February 28, 2009). This is a
102% increase from the previous year. Canadian sales however only accounted for
8.0% of the company’s total revenue in fiscal 2009.
·
As of February 28, 2009, RIM
had approximately 12,800 full-time employees.
Production
·
Production of RIM’s mobile
devices takes place in the company’s Waterloo, Ontario facility.
·
In 2007, the company expanded
its manufacturing facility by 50,000 square feet to a total of 242,000 square
feet so it could meet ongoing demand for its mobile products.
Competitive Positioning
·
Although RIM’s Blackberry
smartphones have been available on the Canadian market for several years now,
it was the launch of the Apple iPhone in July 2008, which helped to reshape the
smartphone market in Canada as consumer interest in smartphones took off. While
smartphones have seen their prices drop steadily in 2008, they are making up an
increasingly larger share of overall mobile phone sales.
·
RIM currently markets various
models of its smartphones, including the BlackBerry Storm Series, BlackBerry
Bold, BlackBerry Curve Series, BlackBerry Pearl Flip Series, BlackBerry Pearl
Series, BlackBerry 8800 Series, and BlackBerry 8700 Series.
·
With about 5,000 of the
company's total workforce devoted to R&D, RIM places high importance on
developing new products. In fact R&D expenses have grown dramatically,
increasing from US$359.8 million in fiscal 2008 to US$684.7 million in fiscal
2009.
·
In October 2008, RIM aimed its
sights directly at the Apple iPhone with the launch of its BlackBerry Storm -
the company’s first touchscreen model. In fact, the Storm incorporates many of
the popular user-friendly features of the consumer-oriented iPhone.
·
In addition to RIM’s foray into
the touchscreen realm, the company also launched the BlackBerry App World in
April 2009, which allows users to download a wide range of applications
directly from their BlackBerry smartphone. RIM is trying to duplicate Apple’s
success in providing numerous applications for iPhone users. The extensive
selection of easily downloadable applications has been a key factor behind the
success of the iPhone in Canada.
·
While many of the traditional
mobile companies such as Samsung and Nokia all offer smartphone selections, the
real battle for this market segment is between Apple and RIM. Traditionally,
RIM has focussed its smartphone offerings to the corporate sector, but this is
starting to change as the company targets mainstream consumers. In fact, during
the fourth quarter of the company’s 2009 fiscal year, RIM added 3.9 million
subscribers worldwide, of which 70% were non-enterprise customers. Apple on the
other hand has from the beginning targeted the consumer segment given the
device’s robust entertainment features.
|
Subsector
|
Volume
share
|
Rank
|
|
Mobile
Phones
|
3.5%
|
5
|
Source: Euromonitor International
