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MarketLine Case Study
BlackBerry Limited Does it have a future in the consumer market?
Reference Code: ML00017-009
Publication Date: April 2014
WWW.MARKETLINE.COM
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OVERVIEW
Catalyst BlackBerry Limited (BlackBerry) has seen its position in the global smartphone market crumble in recent years,
especially in the consumer sector, resulting in disastrous annual losses. This has led the company to begin to refocus on
enterprise customers in a bid to return to profit. This case study analyzes BlackBerry's recent fall from prominence, the
factors influencing its poor performance, how it is looking to return to profitability and how it is aiming to retain at least a
modicum of standing within the consumer sector.
Summary Pressure from Android and Apple smartphones has significantly eroded Blackberry's share of the market over
the past couple of years. Loss of consumer appeal and the relative failure of its latest operating system,
BlackBerry 10, have resulted in plummeting hardware revenues and substantial losses. This has led to a
situation where the company has had to make significant operational changes. Following a failed attempt to go
private in November 2013, the company has changed its CEO, and outlined its plans to implement cost-cutting
and downsizing measures.
At present, BlackBerry's operations fall under one operational segment, which is less than ideal in a business
that is performing as badly as BlackBerry. However, the company has proposed a transition to an operating unit
structure, which will consist of: Enterprise Services, Messaging, QNX Embedded business, and Devices. A
movement to such a segmented structure would give the company a greater strategic focus, enabling it to
identify and address ongoing issues more easily. Furthermore, it would also enable BlackBerry to enjoy a
greater strategic focus on key areas of its business, such as enterprise services, security and messaging, within
which it has the greatest chance at a return to smaller-scale profitability.
Spurred on by its relatively enduring popularity, BlackBerry is looking to continue to leverage its BBM service in
spite of its newly announced focus on enterprise customers. Notably, the company has a number of dominant,
large-scale competitors in the area of instant messaging (IM), such as Whatsapp, which has recently been
acquired by Facebook. However, such competitors have also struggled to monetize their IM operations to a
significant degree.
In order to expand its capitalization of BBM, BlackBerry has taken the service multiplatform, offering it as a free
app on both iOS and Android, lessening the impact of consumer migration away from BlackBerry towards
competitor devices and allowing the company to continue to profit from the consumer sector. Furthermore, the
company aims to monetize the service by turning it into a social media hub through which companies can
advertise to subscribers through so-called BBM Channels. The company has also started to operate a
'freemium' revenue model with the introduction of the BBM Shop.
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TABLE OF CONTENTS
Overview ............................................................................................................................................................................. 2
Catalyst ............................................................................................................................................................................ 2
Summary ......................................................................................................................................................................... 2
BlackBerry has lost the hardware battle .............................................................................................................................. 6
BlackBerry's hardware sales have plummeted ................................................................................................................ 6
Falling revenues have led to crippling losses .................................................................................................................. 8
BlackBerry 10 failed to win back the consumer market ................................................................................................... 9
BlackBerry 10's app offering has been unable to compete with Google and Apple ..................................................... 9
Alicia Keys could not reverse BlackBerry's misfortune ............................................................................................... 10
BlackBerry 7 sales still outnumber BlackBerry 10 ...................................................................................................... 10
BlackBerry has been forced to cut costs and change .................................................................................................... 11
Attempts to become a private entity failed and leadership has changed.................................................................... 11
BlackBerry has been forced into cost-cutting and downsizing measures ................................................................... 11
BlackBerry to restructure operations ................................................................................................................................. 12
Services are BlackBerry's strongest asset ..................................................................................................................... 12
Consumer and enterprise services are conflated .......................................................................................................... 14
BlackBerry is set to focus on the enterprise and security sectors .................................................................................. 15
Services have become more difficult to monetize for BlackBerry .................................................................................. 15
BlackBerry's new structure should significantly enhance strategy ................................................................................. 16
BBM can continue to monetize consumers ....................................................................................................................... 17
BBM has stiff competition, but monetization remains an issue ...................................................................................... 17
BlackBerry is expanding BBM's reach to rival operating systems to stay in the consumer market ................................ 18
BBM channels offer backdoor ad revenues through social media ................................................................................. 18
BlackBerry is also looking to adopt a 'freemium' model with stickers and BBM Shop ................................................... 19
Conclusions ....................................................................................................................................................................... 21
BlackBerry can still tap the consumer market, but on a much smaller scale ................................................................. 21
Appendix ........................................................................................................................................................................... 22
Sources ......................................................................................................................................................................... 22
Further Reading ............................................................................................................................................................. 24
Ask the analyst .............................................................................................................................................................. 25
About MarketLine .......................................................................................................................................................... 25
Disclaimer ...................................................................................................................................................................... 25
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LIST OF TABLES
Table 1: Smartphone market share by operating system, 2012 and 2013, % ..................................................................... 7
Table 2: BBM's instant messaging competitors ................................................................................................................. 17
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TABLE OF FIGURES
Figure 1: BlackBerry revenue from devices, $bn, FY2005-13 ............................................................................................. 6
Figure 2: BlackBerry revenue, net income and operating expenses, $bn, FY2005-14 ........................................................ 8
Figure 3: BlackBerry profit margin and operating expenses % of revenue, %, FY2005-14 ................................................. 9
Figure 4: BlackBerry revenue mix, $bn, FY2005-13 .......................................................................................................... 12
Figure 5: BlackBerry revenue mix excluding devices, $bn, FY2005-13 ............................................................................ 13
Figure 6: BlackBerry gross margin by type of product, %, FY2005-13 .............................................................................. 14
Figure 7: BBM stickers on a Google Nexus 5 Android smartphone .................................................................................. 20
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BLACKBERRY HAS LOST THE HARDWARE BATTLE Pressure from Android and Apple smartphones has significantly eroded Blackberry's share of the market over the past
couple of years. Loss of consumer appeal and the relative failure of its latest operating system, BlackBerry 10, have
resulted in plummeting hardware revenues and substantial losses. This has led to a situation where the company has
had to make significant operational changes. Following a failed attempt to go private in November 2013, the company
has changed its CEO, and outlined its plans to implement cost-cutting and downsizing measures.
BlackBerry's hardware sales have plummeted BlackBerry's hardware business experienced a period of dynamic growth between 2005 and 2011, during which the
company's revenues from the sale of devices increased by over 1,600% to reach around $16bn. However, the
company's revenues from devices declined at a rapid rate over the past two financial years ended March 2012 and 2013,
as evidenced by Figure 1.
Figure 1: BlackBerry revenue from devices, $bn, FY2005-13
0.9 1.4
2.2
4.8
9.1
12.1
16.0
13.8
6.6
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
2005 2006 2007 2008 2009 2010 2011 2012 2013
R e v
e n
u e (
$ b
n )
SOURCE: BlackBerry M A R K E T L I N E
Clearly, BlackBerry's hardware business is struggling in the face of stiff competition from the likes of Apple and Samsung,
two companies that have continued to enjoy rapid growth in the sales of smartphones over the same period. In fact,
Apple enjoyed a 16% growth in iPhone revenues for its financial year ended September 2013 compared to the previous
twelve months, following growth of 71% in the preceding year.
Unfortunately for BlackBerry, this is not an isolated case. In fact, the smartphone market has continued to grow at a
significant overall rate during BlackBerry's period of decline, and this has resulted in a severe loss of market share for the
Canadian manufacturer, as evidenced in Table 1.
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Table 1: Smartphone market share by operating system, 2012 and 2013, %
Operating System 2012 Market Share 2013 Market Share
Android 69.0% 78.6%
iOS 18.7% 15.2%
Windows Phone 2.4% 3.3%
BlackBerry 4.5% 1.9%
Others 5.4% 1.0%
SOURCE: IDC M A R K E T L I N E
Clearly, the Android operating system has benefited the most from the rapid growth of the smartphone market over the
last two years. Not only has it eaten into the market share of BlackBerry, but also that of Apple.
Crucially, the Android ecosystem encompasses handsets from a wide range of leading manufacturers, including
Samsung, LG, Sony and HTC. By way of contrast, the iOS and BlackBerry operating systems rely on a much more
limited number of handsets that are exclusively manufactured by the owners of each respective system.
It is therefore no surprise that Android dominates the smartphone market: the greater degree of choice caters for all kinds
of consumers, ranging from those in the market for budget, low-end devices to consumers that are attracted to top-of-the-
range powerhouses, such as the Samsung Galaxy S5 and HTC One.
However, it is also worth noting that, although BlackBerry does offer a wider choice of smartphone models than Apple, its
market share is significantly lower. With Apple's iPhone models typically retailing at a premium over BlackBerry's
handsets – a BlackBerry Z30 16GB unlocked phone can be purchased for $499 following a substantial price cut, while a
sim-free 16GB Apple iPhone 5s costs $649 in the US – consumers seem to be willing to pay a premium for an Apple
device over a BlackBerry.
BlackBerry therefore seems to have lost a large amount of brand value, something that Apple – a company that has
striven to cultivate a strong, premium brand identity over the past few decades – has been able to retain. Apple
reductively offers one type of smartphone: the iPhone. Although there have been numerous iterations, and some degree
of differentiation, the iPhone has retained a unified, premium image. Even the 16GB unlocked iPhone 5c, Apple's attempt
at a 'budget iPhone', retails for only $100 less than the company's flagship iPhone 5s, while BlackBerry's second-tier
model, the Z10 is $200 cheaper than the Z30 on its online store.
BlackBerry's more fragmented smartphone lineup lacks the iconic image and prestige held by Apple's exclusively high-
end offering, and this has contributed to consumer migration away from BlackBerry towards Apple's ecosystem. On the
other end of the scale, BlackBerry's smartphone offering is much less diverse than that of Android, and it does not
service the lower end of the market to the same degree as Google's smartphone platform. As a result, BlackBerry
uncomfortably occupies the unwanted middle ground of the smartphone market – a no man's land that is unable to
satisfy either high-end or budget-focused consumers.
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Falling revenues have led to crippling losses Sometimes companies can become the victims of their own success. When BlackBerry saw demand for its smartphones
and services rise exponentially between 2005 and 2011, it inevitably scaled up its operations to a significant degree.
Crucially, this meant that its costs rose dramatically, as it took on a greater number of employees and raised production
volumes of its smartphones to keep up with demand. However, since revenues started to drop significantly, the company
has been unable to sufficiently scale back its operations, which has led to a disastrous net loss of around $5.9bn in
FY2014. Operational changes now, therefore, seem a necessity for BlackBerry, rather than a recommendation.
It should be noted that BlackBerry enjoyed a great deal of growth and profitability in the lead up to its current woes, and
the company achieved a record net profit of $2.5bn in FY2012. However, as revenues and profits rose, so too did
operating expenses, as evidenced in Figure 2.
Figure 2: BlackBerry revenue, net income and operating expenses, $bn, FY2005-14
-10
-5
0
5
10
15
20
25
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$ b
n
Revenue Net income Operating expenses
SOURCE: BlackBerry M A R K E T L I N E
When revenue declined by 7.5% in FY2012, BlackBerry was not too badly affected and it still managed to report a net
profit. However, a significant revenue decline in FY2013 resulted in the company reporting a loss of $646m in the same
year. The primary driver of this was the fact that, while revenues declined by 39.9% between FY2012 and FY2013,
operating expenses were only reduced by 8.1% over the same period.
Unfortunately for BlackBerry, this issue was compounded in FY2014. Revenues shrank by a further 38.5% between
FY2013 and FY2014, while operating costs have actually risen by 52.5%, although this is mainly due to the impairment of
long-lived assets. However, research and development, and selling, marketing and administration costs still only dropped
by 6.4% between FY2013 and FY2014.
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Clearly, BlackBerry has been unable to adjust the scale of its operations in accordance with its disastrous revenue
generating performance over the past two financial years. This has, in turn, resulted in crippling losses and an extremely
unhealthy operating expense to revenue ratio in FY2014, as evidenced in Figure 3, and the company is now in desperate
need of operational changes in order to avoid further calamitous losses.
Figure 3: BlackBerry profit margin and operating expenses % of revenue, %, FY2005-14
-100%
-50%
0%
50%
100%
150%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Profit margin Operating expenses % of revenue
SOURCE: BlackBerry M A R K E T L I N E
BlackBerry 10 failed to win back the consumer market With Google's Android and Apple's iOS operating systems eroding BlackBerry's smartphone market share, the
manufacturer needed to put itself back on an even playing field with an update to its own operating system. However, the
company's new Blackberry 10 operating system, which was launched in January 2013 following a number of delays and
setbacks, failed to take off, and was not enough to rectify BlackBerry's sliding hardware sales.
When BlackBerry 10 was officially launched in January 2013, the company was optimistic that it could turn the company's
fortunes around. At the time, then CEO Thorsten Heins' claimed that the launch saw "a re-invented BlackBerry launching
an entirely new mobile experience". Evidently, the company saw the launch of BlackBerry 10 as a chance to re-invent the
BlackBerry brand as a whole, not just its operating system.
BlackBerry 10's app offering has been unable to compete with Google and Apple
When BlackBerry launched BlackBerry 10, it paid much attention to the fact that its newly rebranded app store,
BlackBerry world, already had 70,000 BlackBerry 10 apps. However, in terms of app availability, BlackBerry 10 has been
playing catch-up to iOS and Android, which both have over 1 million apps available. Although the number of apps
available for BlackBerry 10 has increased, many remain unavailable and those that do exist often provide consumers
with a lesser experience than their Android and iOS counterparts.
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With BlackBerry 10, the company was hoping to shed its image as a dinosaur within the industry, and that it could offer
consumers the same, on-the-pulse experience as its competitors.
It was no surprise that, upon the launch, BlackBerry drew attention to the fact that it had attracted the support of a
number of well-known developers:
"Facebook, Twitter, LinkedIn and Foursquare apps for BlackBerry 10 are preinstalled, and BlackBerry 10 customers will
have access to leading applications from across the globe. Leading application providers including Disney, Cisco,
Foursquare, Skype and Rovio have committed to the platform."
Although the availability of such apps at launch may have brought the company's app offering more in line with its
competitors, there remained notable omissions. Although the number of BlackBerry 10 apps available reportedly reached
over 130,000 in September 2013, some blockbuster social apps, such as Snapchat and Facebook-owned Instagram
continue to remain absent from the BlackBerry World store.
Furthermore, in August 2013, it was reported that almost 50,000 of a total of around 235,000 apps came from one single
developer. Such so-called 'app spamming' lessens the significance of BlackBerry's reported app growth and dilutes the
strength of its app offering. Additionally, many apps that have appeared on BlackBerry World are ports of apps that had
originally been designed for Android, and are thus more likely to be affected by performance issues.
Alicia Keys could not reverse BlackBerry's misfortune
Seeing BlackBerry 10 as a chance to re-invent its brand image, BlackBerry announced that it had appointed pop star
Alicia Keys as its new Global Creative Director during its launch event. However, this role came to an end in January
2014, less than a year after the initial announcement, following lack luster promotional activities and an embarrassing
tweet that threw into question the singer's allegiance to the BlackBerry brand.
It is worth noting the manner in which BlackBerry announced Keys' appointment to the world:
"At the close of its BlackBerry 10 launch event today, BlackBerry (NASDAQ:RIMM, TSX: RIM) CEO Thorsten Heins
introduced 14-time Grammy Award winning singer, songwriter and entrepreneur, Alicia Keys, as BlackBerry's new Global
Creative Director. As an official member of the BlackBerry team, Keys will lead an array of new business initiatives that
will drive engagement with BlackBerry and perception of the brand."
In spite of BlackBerry's wording, it does appear that Keys was always bound to act as more of a spokesperson than a
creative director, and that the sole purpose of the appointment was to improve consumers' "perception of the brand"
which, at the time of the announcement, was already fairly uninspiring. Nevertheless, sound bites were flying around
Blackberry 10's ability to "inspire creativity" amongst BlackBerry users, as well as app developers.
However, Keys' role following the announcement was somewhat muted: although being involved with the company's
"Keep Moving Project" and BlackBerry Scholars Program, her involvement with the company dwindled through 2013. In
addition to this, in February 2013, weeks after being appointed Global Creative Director and swearing allegiance to the
BlackBerry 10 platform, Keys reportedly sent a tweet from an iPhone.
Although the singer claimed that her Twitter account had been hacked, this was picked up by the press and tarnished
BlackBerry 10's reputation, the very thing that Keys had been hired to bolster.
BlackBerry 7 sales still outnumber BlackBerry 10
In spite of BlackBerry's best efforts to promote BlackBerry 10, and thus re-invent its brand image in the face of
competition from Google and Apple, sales of devices running the company's new operating system have been
uninspiring to say the least. In fact, according to the company's quarterly financial announcements, the vast majority of
BlackBerry devices sold through to end customers operate on the older BlackBerry 7 operating system, which launched
as far back as 2011.
According to figures in BlackBerry's Q2 and Q3 reports for FY2014, BlackBerry 7 smartphones accounted for almost
three quarters of the total number of BlackBerry smartphones sold through to end customers over the two quarters.
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Perhaps more worryingly, however, is the fact that the proportion of such sales accounted for by BlackBerry 7 devices
actually grew in Q3 as compared to Q2 (76.2% in Q3 as opposed to 71.2% in Q2).
Evidently, BlackBerry 10 has failed to take off, and even the company's ailing older models of smartphone have
outperformed BlackBerry's most recent offerings. Without the much needed growth in BlackBerry 10 device sales, the
company's hardware business is in free fall.
BlackBerry has been forced to cut costs and change Rapidly declining hardware revenues, crippling losses and market share woes have forced BlackBerry's hand into
shaking up its operations. Crucially, an attempt at privatization failed when a proposed takeover by the company's largest
shareholder, Fairfax Financial Holdings Ltd., fell through in November 2013. This also led to the resignation of the
company's CEO and subsequent appointment of John Chen in the same role. BlackBerry has also been forced into a
number of cost-cutting measures, including mass staff reductions and divestment of assets.
Attempts to become a private entity failed and leadership has changed
In an attempt to shield itself from the public eye during a major period of financial instability and operational change,
BlackBerry sought to become a private entity in 2013. In September, 2013, BlackBerry agreed to a potential takeover bid
by a consortium led by Fairfax Financial Holdings Ltd. (Fairfax), the company's largest shareholder, for $4.7bn.
However, in November 2013, the deal fell through as Fairfax was unable to raise the necessary funds. However, the
consortium led by Fairfax instead agreed to invest in BlackBerry through a $1bn private placement of convertible
debentures. Although the privatization attempt had failed, this at least gave BlackBerry some breathing space.
On the back of the failed privatization however, Blackberry's CEO, Thorsten Heins, resigned and outsider John Chen was
appointed as interim CEO in November 2013. The need for change had, evidently, reached its tipping point and the
departure of Heins – who had argued that there was no need for drastic change when he was appointed as CEO in
January 2012 – symbolized BlackBerry's recognition of this.
It is also worth noting that Heins was appointed as CEO from within the company. The appointment of Chen, an outsider
with a track record of tech turnarounds, therefore further demonstrated the company's recognition of the need for change.
Although faced with a decidedly uphill struggle, the appointment has at least given BlackBerry a chance at a potential
turnaround through a strategic transformation under Chen's leadership.
BlackBerry has been forced into cost-cutting and downsizing measures
In an effort to streamline its ongoing operations, BlackBerry has employed a number of cost-cutting measures under its
Cost Optimization and Resource Efficiency ("CORE") Program. The program, which commenced in March 2012, aims to
increase BlackBerry's efficiency through streamlining the company's smartphone product portfolio, reassessment of its
manufacturing operations, workforce cuts, and divestment of assets, as well as a number of other cost-cutting measures.
In September 2013, BlackBerry announced that it was planning to reduce its number of employees to 7,000 by cutting
4,500 jobs. Furthermore, in March 2014, BlackBerry announced that it had entered into an agreement to sell over 3
million square feet of its real estate holdings in Canada and that it expects the deal to close in Q1 2015.
In all, BlackBerry expects to incur approximately $475m in pre-tax charges related to its CORE Program before the end
of Q1 2015. However, given that the company made a net loss around 10 times that in Q3 2014 alone, it will undoubtedly
see this as a wholly necessary cost. Indeed, BlackBerry hopes to cut its operating expenditures by 50% before the end of
Q1 2015.
The company's CORE Program clearly shows BlackBerry's attempts to reduce costs in an effort to ameliorate the
disastrous losses that it has made in recent years while, at the same time, serving to point towards the company's future.
Evidently, BlackBerry's days as a major player in the global smartphone market are numbered, if not already over, and, in
order to function as a profitable entity at any point in the future, it will have to operate on a much smaller scale.
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BLACKBERRY TO RESTRUCTURE OPERATIONS At present, BlackBerry's operations fall under one operational segment, which is less than ideal in a business that is
performing as badly as BlackBerry. However, the company has proposed a transition to an operating unit structure,
which will consist of: Enterprise Services, Messaging, QNX Embedded business, and Devices.
A movement to such a segmented structure would give the company a greater strategic focus, enabling it to identify and
address ongoing issues more easily. Furthermore, it would also enable BlackBerry to enjoy a greater strategic focus on
key areas of its business, such as enterprise services, security and messaging, within which it has the greatest chance at
a return to smaller-scale profitability.
Services are BlackBerry's strongest asset There is no doubt that BlackBerry's hardware business has been the catalyst for BlackBerry's decline over the past few
years and BlackBerry's total revenues have suffered catastrophic declines in the company's past two financial years, as
evidenced by Figure 4. However, the company's services have been more resilient and enjoy a much healthier gross
margin, as shown in Figure 6, thus making them an integral part of BlackBerry's business strategy.
Figure 4: BlackBerry revenue mix, $bn, FY2005-13
-
5
10
15
20
25
2005 2006 2007 2008 2009 2010 2011 2012 2013
R e v
e n
u e (
$ b
n )
Devices Service Software Other
SOURCE: BlackBerry M A R K E T L I N E
However, as evidenced by Figure 5, this decline seems much less severe when devices are removed from the equation.
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Figure 5: BlackBerry revenue mix excluding devices, $bn, FY2005-13
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
2005 2006 2007 2008 2009 2010 2011 2012 2013
R e v
e n
u e (
$ b
n )
Service Software Other
SOURCE: BlackBerry M A R K E T L I N E
Clearly, 'service', which includes BlackBerry's enterprise solutions and BlackBerry Messenger service, has started to
account for a much higher percentage of the company's revenues, and this trend has continued into FY2014, where it
has accounted for 36.8% of revenues in the first three quarters, as opposed to 35.3% in the same period of the previous
year.
Furthermore, the company's service offering has been, comparatively, much more robust in the face of the headwinds
that BlackBerry has come up against in FY 2012-13, and revenues from services even managed to grow 27% in FY2013,
when device revenues contracted by 13.5%. Although they have declined alongside all of BlackBerry's revenue streams
in FY2014, they remain more resilient than the company's struggling hardware revenues.
In addition to this, the company's services are much more profitable on a gross basis than its hardware sales, as shown
in Figure 6. In fact, the company's services and software business has, historically, been much more stable and around
twice as profitable on a gross basis as the company's hardware and other business. Furthermore, the company's
services and software business retained its steady gross profitability in FY2013, while hardware and other posted a
negative gross margin.
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Figure 6: BlackBerry gross margin by type of product, %, FY2005-13
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005 2006 2007 2008 2009 2010 2011 2012 2013
G ro
s s m
a rg
in Devices and other Services and software
SOURCE: BlackBerrye M A R K E T L I N E
Consumer and enterprise services are conflated Although it can be seen as BlackBerry's strongest asset, the company's service offering has, historically, been a
somewhat confused offering. Notably, BlackBerry's services encompass enterprise-only solutions, such as BES 10, as
well as BlackBerry Messenger (BBM) which, although having its roots as an enterprise application, has been popular
among consumers and was instrumental in driving the initial popularity of BlackBerry outside of the corporate sphere.
BlackBerry is now in the situation where more focused, separate strategies are required for business and consumer
services.
Although there are some differences between services offered to consumers and enterprise customers, the company's
historical – and present, for that matter – structure has not allowed for either to be specifically targeted. The company's
meteoric rise in popularity within the consumer market has also led to the company's enterprise offering becoming
diluted, and certain aspects of its recent strategy have been an attempt to strike a balance between its two main types of
end-users.
For example, one of the major features of BlackBerry 10 that the company drew attention to at the time of launch was its
"BlackBerry Balance technology" which, according to BlackBerry, "elegantly separates and secures work applications
and data from personal content on BlackBerry devices."
Evidently, BlackBerry hoped to continue to appeal to both business and consumer users with BlackBerry 10. However,
continued consumer migration to competitors' devices suggests that BlackBerry's services are no longer considered
attractive enough to drive hardware sales within the personal use sector. With its service offering failing to attract
consumer custom, it is now necessary for BlackBerry to refocus on the enterprise application of its services or, at least,
separate the two conflicting areas of interest.
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BlackBerry is set to focus on the enterprise and security sectors With consumer interest falling in its line of smartphones, on December 20, 2013, BlackBerry outlined its intention to
return to "its core strengths of enterprise and security". Evidently, BlackBerry has assessed its standing in the consumer
market, and sees its enterprise offering as the best route to returning to future profitability.
Notably, this focus is not confined to BlackBerry's service offering, and, in its Q3 2014 financial report, the company
states that it "plans to refocus its product and services offerings on its end-to-end solution of hardware, software and
services for enterprises."
This is a sensible route for BlackBerry to take: it has been unable to keep up with galloping trends in the consumer space
that have been driven by Apple and Google, the developers of BlackBerry's main two rival operating systems, as well as
in other areas, such as app availability. Meanwhile, the company's strong pedigree in the enterprise sector should mean
that it is more likely to retain business customers into the future.
Therefore, in order to reshape the BlackBerry brand in its prior corporate image, the company must focus its range of
operations – from devices to end services – on professional users. It is therefore no surprise that the latest 'flagship'
BlackBerry 10 smartphone, revealed after the company had revealed its intention to refocus on enterprise, seems to
have been designed with business users in mind.
Crucially, the BlackBerry Q20, which was revealed in February 2014 at Mobile World Congress 2014, Barcelona, marks
a return to the full 'QWERTY' keyboard design that had been synonymous with BlackBerry's original, business-focused
smartphones. Although announced alongside a new, all-touch BlackBerry 10 smartphone, the Q20 is being referred to as
the new 'flagship' device. The phone's intention to appeal to business customers was, at the time of its reveal, addressed
by BlackBerrry CEO John Chen:
"Today, we're delighted to announce the new BlackBerry Q20 smartphone, which is designed to give you the distinct
experience that every BlackBerry QWERTY loyalist and high-productivity business customer absolutely loves. With the
BlackBerry Q20 smartphone, you'll get the familiar hard buttons and trackpad that you want, along with the best email
service, the best keyboard experience and the best battery life possible. "
Clearly, the Q20 marks BlackBerry's attempt to return to its roots and produce what the company terms as a 'classic'
device that will appeal to business customers looking for 'high-productivity'. This is, therefore, likely to be emblematic of
BlackBerry's on-going strategy, as it looks to focus on its pedigree in the enterprise sector in order to attract business
customers.
Services have become more difficult to monetize for BlackBerry Although serving as the company's strongest revenue stream, it is worth noting that BlackBerry has found it more difficult
to generate recurring income from its services in recent months. Ironically, the migration to BlackBerry 10 has impacted
the company's ability to generate service revenues due to the way that such devices use the company's network
infrastructure. To compound the situation, monthly service access fee (SAF) revenues have been negatively impacted by
price reductions enacted by BlackBerry in order to remain competitive. However, business services remain easier to
generate revenue from.
Historically, BlackBerry charged carriers or resellers a monthly SAF for access to its network infrastructure, which would
then be passed on to customers using BlackBerry services. For consumers, SAFs mainly enabled access to the BBM
services, while enterprise customers were billed higher amounts in order to receive additional services, such as a higher
level of value-added security and encryption through the BlackBerry Enterprise Service (BES) platform.
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Although BlackBerry 7 devices continue to generate recurring monthly revenues in this way, the company's latest
BlackBerry 10 devices do not. Instead, in an effort to align its offering with its competitors, the company removed the SAF
requirement for consumers to utilize its basic services, such as BBM. Instead, BlackBerry 10 devices now utilize standard
data connections in order to access the service, nullifying the need for SAF. To compound the situation, BlackBerry has
been cutting its SAF prices in an effort to maintain and grow its existing non-BlackBerry 10 subscriber base. However,
these efforts have failed: subscriber numbers have fallen, severely hampering the company's ability to monetize BBM
which was, at one point, one of its greatest selling features.
However, enterprise users, which enjoy additional enhanced services through BES, still generate monthly recurring
revenue for BlackBerry, and this is set to continue into the future. Evidently, business customers are where the greatest
opportunity lies for future service revenue, and this increased ease of monetization has driven the company's strategic
decision to focus on enterprise and security, rather than consumers. It is therefore paramount that BlackBerry continues
to develop its enterprise service offering in order to stand a chance at a return to profitability with a service-led offering.
BlackBerry's new structure should significantly enhance strategy One of BlackBerry's most recently announced strategic initiatives is to transition to a new operating unit structure,
encompassing: Enterprise Services, Messaging, QNX Embedded business and Devices business. Critically, this should
enable the company to focus on the areas of its business with which it has the greatest chance to return to profit.
Historically, in spite of the company having a wide product offering ranging from hardware to services, the company has
conducted its business under one, all-encompassing operating unit. However, as the company started to operate on a
much greater scale this became impractical and, without a specific strategic focus on each of its revenue streams, the
company has been slow to react to the poor performance of its hardware operations, which has, in turn, jeopardized its
other operations.
However, the company's proposed new structure will enable its operations to operate in a more autonomous manner,
enabling a greater strategic focus and offering a greater degree of insulation against poorly performing business areas.
Furthermore, it will also enable BlackBerry to place a greater strategic focus on the business areas through which it
stands the greatest chance of returning to profit: services and software.
In fact, the new structure should enable BlackBerry to continue to operate within the consumer space, while maintaining
its new focus on enterprise and security. For example, although reducing its involvement with the consumer market,
BlackBerry has stated its intention to continue to offer consumer handsets. Furthermore, the company's new Messaging
segment will service both business users looking to effect intra-company communication, as well as consumers hoping to
utilize BBM as a personal messaging application.
Although this means that, once again, consumer and business users are conflated to a degree, the fact that BlackBerry
will have a separate Enterprise Services unit will enable it to manage such high-value, core services separately, thus
simplifying and maintaining its strategic focus on its business customers.
BlackBerry Case Study ML00017-009/Published 04/2014
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BBM CAN CONTINUE TO MONETIZE CONSUMERS Spurred on by its relatively enduring popularity, BlackBerry is looking to continue to leverage its BBM service in spite of
its newly announced focus on enterprise customers. Notably, the company has a number of dominant, large-scale
competitors in the area of instant messaging (IM), such as Whatsapp, which has recently been acquired by Facebook.
However, such competitors have also struggled to monetize their IM operations to a significant degree.
In order to expand its capitalization of BBM, BlackBerry has taken the service multiplatform, offering it as a free app on
both iOS and Android, lessening the impact of consumer migration away from BlackBerry towards competitor devices
and allowing the company to continue to profit from the consumer sector. Furthermore, the company aims to monetize
the service by turning it into a social media hub through which companies can advertise to subscribers through so-called
BBM Channels. The company has also started to operate a 'freemium' revenue model with the introduction of the BBM
Shop.
BBM has stiff competition, but monetization remains an issue In spite of BBM's reputation as an IM service, it is worth noting that, in terms of subscriber numbers, it is essentially
dwarfed by the competition. However, like BlackBerry, competing IM operators have been unable to fully capitalize on the
staggering usage of their services.
On October 29, 2013, BlackBerry reported that BBM had over 80 million monthly active users – an impressive feat given
the decline in popularity that its hardware has suffered over the past few years - and this figure now stands at around 85
million. However, when the competition is taken into account, this number is much less impressive, as evidenced in
Table 2.
Table 2: BBM's instant messaging competitors
Service HQ Country Number of monthly users
Whatsapp USA 450 million
Line South Korea 370 million
Viber Japan 300 million
WeChat China 272 million
KaoKaoTalk South Korea 130 million
BBM Canada 85 million
SOURCE: Facebook: The Whatsapp acquisition, MarketLine Case Study, TechCrunch M A R K E T L I N E
Clearly, competitor Whatsapp, which was acquired by Facebook in February 2014 for a staggering $19bn, is far ahead of
BBM in terms of the sheer volume of its users. However, the number of users does not necessarily directly translate into
huge revenues. Whatsapp, for example, only accrued around $20m in yearly revenues prior to its acquisition in spite of
its vast customer base which has grown at a rapid rate. Crucially, this boils down to its monetization strategy.
Whatsapp is an IM service for smartphone users across OS platforms. It offers free SMS communication for a year, and
then adds a modest price of $0.99 as an annual subscription fee. Furthermore, there is no advertising with the service,
which significantly limits its revenue potential. However, the lack of ads likely serves as a boon to many customers, and
the implementation of ads would likely drive users to other free or low cost options. With BlackBerry unable to generate
SAF revenue from BlackBerry 10 BBM users, most probably in response to competition from low-cost services as
Whatsapp, it faces a similar monetization conundrum, which it is addressing through its BBM Channels and BBM Shop
strategies.
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BlackBerry is expanding BBM's reach to rival operating systems to stay in the consumer market Having lost the operating system battle to Android, iOS and – to a lesser extent – Windows Phone, BlackBerry has
attempted to use its rivals' popularity to drive the expansion of its consumer BBM subscriber base and, therefore, boost
its revenues from the service.
In October 2013, BlackBerry released BBM on Apple's App Store and Google Play as a free app download. Notably, the
new Android and iOS BBM app saw instant success, achieving over 10 million downloads within its first 24 hours of
availability. Furthermore, this had a profound impact on BBM's subscriber base, with 20 million new users coming from
Android and iOS in the first week of the service's availability on the platforms.
Although developing distaste for BlackBerry's hardware, consumers seem to have retained an appetite for BBM as a
service. BBM's future, within the consumer market at least, therefore appears to lie as a service that, although
unavoidably linked to BlackBerry smartphones, is able to flourish in its own right on a range of devices. With the
company's pride well and truly brushed aside, BlackBerry can now turn its rivals' success to its own advantage in its
quest for profitability.
This is clearly a strategy that BlackBerry is looking to expand on. In February 2014, the company announced that BBM
will be made available on Microsoft's Windows Phone platform in summer 2014, as well as for Nokia's upcoming Nokia X
platform. In addition to this, BlackBerry has also reached agreements with a number of original equipment manufacturers
(OEMs), including LG, for BBM to come preinstalled on their Android smartphones.
BBM channels offer backdoor ad revenues through social media With the implementation of blatant ads likely to be a sure-fire turnoff for many IM users, BlackBerry has devised an
alternative monetization strategy for BBM. Interestingly, it still involves advertising – of sorts – under the guise of social
media activity.
In May 2013, BlackBerry announced BBM Channels, its own take on social media interactivity integrated within its
flagship messenger service. At the time of its announcement, BlackBerry drew attention to its potential marketing
applications, alongside how consumers could use the new feature:
"Today, BlackBerry takes BBM to the next level with BBM Channels extending the BBM experience to brands, artists,
businesses and communities, you will now be able to connect with individuals and groups in real time. Stay up to date on
your favorite things. Receive timely updates and participate by commenting on, liking and sharing posts. Or choose to
express yourself and create a channel of your own – and create, edit & publish in an instant."
In essence, BBM Channels seems to be a marriage of two of the most popular social media platforms: Facebook and
Twitter. Businesses, or individuals, are able to create a channel profile that will give viewers information, as well as push
direct updates and messages to 'followers'.
In order to monetize this new social network, BlackBerry charges businesses a fee to ensure the prominence of their
channel on BBM. Firstly, BBM channel owners are able to secure space on a 'Featured Channels' tab within BBM,
essentially promoting their product or service to the entirety of BBM's subscriber base. Additionally, businesses can pay
for 'sponsored invites', which are, reductively, targeted advertising. Through sponsored invites, businesses can 'invite'
BBM users – selected on the basis of certain characteristics, such as age, location and interests – to join their channel.
Such invites appear on a specific 'invites tab' in BBM, and do not interfere with the basic IM service.
Finally, BBM Channel owners are able to pay for 'sponsored posts', which appear alongside updates from BBM users'
BBM Contacts and BBM Channels that they already subscribe to.
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With these perhaps being the most overt 'ads' on BBM Channels, BlackBerry has attempted to give BBM users more
control over which posts they see:
"Just as we give BBM users control over their privacy and contact list, we're extending this control to which channel
owners are able to present sponsored content in your updates feed. Allow me to explain. Let's say you're a Toronto
Maple Leafs fan and you are presented with a sponsored update from a competing hockey team. You can easily block
future sponsored updates from this other team. The benefit to you, the user is clear – you won't see sponsored updates
from channels you're not interested in. But the benefit also extends to channel owners as well as they won't be wasting
time and resources reaching uninterested BBM users."
This is an interesting strategy which, in theory, strikes a balance between alleviating consumer concerns over privacy
and control, while giving BBM Channel owners a much more streamlined route to targeted promotional activities.
It is worth noting that BlackBerry has made an ostensible effort to be transparent with its advertising strategy on BBM,
and the company has sought to reassure users that their strategy does not compromise the basic IM experience. It does,
therefore, appear that the company has been mindful of the negative effect that ads are likely to have on the popularity of
BBM. Time will tell if it has been able to strike the optimum balance with BBM Channels.
The company does, however, appear confident in BBM Channels, and the service was added to the iOS and Android
versions of BBM in February, 2014.
BlackBerry is also looking to adopt a 'freemium' model with stickers and BBM Shop In addition to ad revenue from BBM Channels, BlackBerry is also exploring the 'freemium' revenue generation model for
BBM, a model that has been adopted by many app developers for Android and iOS devices. This involves the sale of
add-on items, such as 'stickers', in a new BBM Shop, which exists within the BBM app.
The idea behind the freemium model is similar to that of the razor/razor blade revenue model. Under this, the idea is that
companies will often make little or no profit or, in some cases, a loss on the initial sale of a product – a razor, for
example. However, the profit is made on additional, consumable goods that tend to be purchased on a recurring basis –
such as razor blades.
With the freemium model, app developers distribute their product on a free basis. In order to give the apps the feel of a
'paid-for' piece of software, they most often do not contain ads, thus further limiting developers' ability to monetize their
offering. However, freemium apps accrue revenue from in-app purchases of additional content, i.e. extra levels, early
upgrades or in-game currency.
In February 2014, BlackBerry announced that it was adding an in-app store, BBM Shop, to its Android and iOS BBM
apps, through which users can purchase 'packs' of 'stickers'. At the time of the announcement, BlackBerry was keen to
point out that these were different to the 'emoticons' already available for free on BBM, claiming that "unlike emoticons,
stickers are bolder, more beautiful images that you can add right in to your chat". Although the material benefit of these
stickers is debatable, there is no doubt that, given their intention to make "BBM chats more fun", they exist as an entirely
consumer-centric offering. Furthermore, the focus appears to be on Android and iOS BBM users, rather than native
BlackBerry subscribers.
While BBM Channels seem to cater for both consumer and business customers, the BBM Shop seems to be exclusively
focused on the company's consumer subscribers. With consumer sales of hardware faltering, the BBM Shop, and the
freemium strategy that comes with it, may well offer BlackBerry a lifeline and enable the company to continue its
involvement in the consumer sector in a scalable and profitable manner.
BlackBerry Case Study ML00017-009/Published 04/2014
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Figure 7: BBM stickers on a Google Nexus 5 Android smartphone
SOURCE: BlackBerry M A R K E T L I N E
BlackBerry Case Study ML00017-009/Published 04/2014
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CONCLUSIONS
BlackBerry can still tap the consumer market, but on a much smaller scale BlackBerry's poor hardware performance has devastated its standing in the smartphone market. Disastrous declines in
the sales of its devices over the past two financial years have meant that it has lost a greater amount of market share to
Google and Apple, and its devices have lost their consumer appeal.
The company's attempt at reinvention with BlackBerry 10 has failed to reverse the slide and, with BlackBerry 7 devices
continuing to outsell BlackBerry's latest offering, the new operating system can be deemed a failure. Critically,
endeavours to regenerate consumer engagement with the BlackBerry brand, such as the appointment of Alicia Keys as
Global Creative Director, have failed. BlackBerry is now resigned to the fact that it is unable to compete on the same
level as Apple and Google in the smartphone market and it has had to enforce operational change out of necessity. This
has culminated in a new CEO, cost reduction and downsizing measures and an operational restructure.
The company's newly proposed operational restructure is certainly a positive development. By splitting its operations
between Enterprise Services, Messaging, QNX Embedded business, and Devices business units, BlackBerry will be able
to employ a more effective strategic focus on its key areas of services and software, while isolating its toxic hardware
business during a particularly rough period of operational transition. Furthermore, it will also enable the company to
effectively refocus its efforts on the enterprise services and security by giving these a standalone, dedicated business
unit.
It should, however, be noted that, in spite of the company's plans to refocus on enterprise services and security, it will be
able to continue to tap the consumer sector through its messaging business unit. Although it faces significant competition
in the IM market, larger rivals, such as the recently Facebook-acquired Whatsapp, have still not been able to monetize
their existing user bases to the fullest capacity.
BlackBerry stands a chance at monetizing consumer subscribers through BBM, and it is continuing to target such
customers through the service. In order to boost the growth and uptake of BBM, it has cut its losses and released a BBM
app on Android and iOS, leveraging its competitors' popularity amongst consumers. This has already boosted the
number of subscribers to the service significantly. Furthermore, it has the potential to recoup some custom from
consumers that have migrated from BlackBerry to rival smartphone platforms.
BlackBerry's vision to monetize BBM through BBM Channels, a new form of social media, is especially astute. BBM
Channels enable businesses to pay for what is, essentially, targeted advertising directed towards BBM users, while
giving consumers a degree of control over which promotional material they receive. BlackBerry is clearly aware of the
negative impact overt advertising could have on BBM's popularity, and BBM Channels are a marked attempt at
circumnavigating this issue. The company is also attempting to accrue revenues directly through the BBM Shop, which
operates through a freemium model similar to other free apps. Time will tell if these measures will be enough to bolster
the company's messaging revenues, and contribute towards future profitability, but it does at least offer BlackBerry a way
to continue to tap the consumer sector through the popularity of its messaging app, albeit on a much smaller scale than
before.
BlackBerry Case Study ML00017-009/Published 04/2014
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APPENDIX
Sources BlackBerry Quarterly and Annual reports, financial documents and press releases
http://us.blackberry.com/company/investors/documents.html
Apple Inc. Investor Relations
http://investor.apple.com/
Facebook: The Whatsapp acquisition, MarketLine Case Study, ML00017-002
http://store.marketline.com/Product/facebook_the_whatsapp_acquisition_?productid=ML00017-002
IDC: Android and iOS Continue to Dominate the Worldwide Smartphone Market with Android Shipments Just Shy of 800
Million in 2013, According to IDC
http://www.idc.com/getdoc.jsp?containerId=prUS24676414
BlackBerry: BlackBerry Z30 (GSM Unlocked) – Black
http://store.shopblackberry.com/store/bbrryus/en_US/pd/productID.298806900/categoryID.66826600/parentCategoryID.6
6826200
Apple: iPhone 5s
http://store.apple.com/us/buy-iphone/iphone5s
BlackBerry: BlackBerry Z10 (Unlocked) – Black
http://store.shopblackberry.com/store/bbrryus/en_US/pd/productID.287837000/categoryID.66826300/parentCategoryID.6
6826200
Apple: iPhone 5s
http://store.apple.com/us/buy-iphone/iphone5c
Appbrain: Number of Android applications
http://www.appbrain.com/stats/number-of-android-apps
The Verge: Apple announces 1 million apps in the App Store, more than 1 billion songs played on iTunes radio
http://www.theverge.com/2013/10/22/4866302/apple-announces-1-million-apps-in-the-app-store
BlackBerry: BlackBerry 10: Re-designed, Re-engineered, and Re-invented
http://press.blackberry.com/press/2013/blackberry-10-re-designed-re-engineered-and-re-invented.html
NDTV: BlackBerry World now contains over 130,000 BB10 apps
http://gadgets.ndtv.com/mobiles/news/blackberry-world-now-contains-over-130000-bb-10-apps-424613
Mashable: Almost 50,000 BlackBerry Apps Come From One Developer
http://mashable.com/2013/08/21/blackberry-10-app-spam/
BlackBerry: Alicia Keys Joins BlackBerry as Global Creative Director
http://press.blackberry.com/press/2013/alicia-keys-joins-blackberry-as-global-creative-director.html
CNN Money: Alicia Keys out as BlackBerry's 'creative director'
http://money.cnn.com/2014/01/02/technology/enterprise/blackberry-alicia-keys/index.html
BlackBerry Case Study ML00017-009/Published 04/2014
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The Verge: BlackBerry Creative Director Alicia Keys tweets from iPhone, pins blame on hackers
http://www.theverge.com/2013/2/11/3977958/blackberry-creative-director-alicia-keys-tweeting-iphone-hacked
BlackBerry: Research In Motion Introduces New BlackBerry 7 Smartphones
http://press.blackberry.com/press/2011/pressrelease-5071.html
Yahoo! Finance: BlackBerry Historical Prices
http://uk.finance.yahoo.com/q/hp?s=BBRY&b=4&a=01&c=1999&e=25&d=02&f=2014&g=w
BBC News: Blackberry in $4.7bn takeover deal with Fairfax
http://www.bbc.co.uk/news/business-24214301
Bloomberg: BlackBerry Takeover Bid Collapses; CEO Heins Ousted
http://www.bloomberg.com/news/2013-11-04/blackberry-takeover-bid-collapses-ceo-is-ousted.html
BlackBerry: BLACKBERRY RECEIVES INVESTMENT OF U.S. $1 BILLION FROM FAIRFAX FINANCIAL AND OTHER
INSTITUTIONAL INVESTORS
http://press.blackberry.com/financial/2013/blackberry-receives-investment-of-u-s---1-billion--from-fairfax-.html
BlackBerry: BLACKBERRY ANNOUNCES UPDATE ON SALE OF CANADIAN REAL ESTATE HOLDINGS
http://press.blackberry.com/press/2014/blackberry-announces-update-on-sale-of-canadian--real-estate-hol.html
BlackBerry: BlackBerry Unveils New Flagship BlackBerry 10 Smartphone Designed to Deliver the Full Classic QWERTY
Experience
http://press.blackberry.com/press/2014/blackberry-unveils-new-flagship-blackberry-10-smartphone-designe.html
BlackBerry: Over 10 Million Downloads of BBM for Android and iPhone in the First Day
http://press.blackberry.com/press/2013/over-10-million-downloads-of-bbm-for-android-and-iphone-in-the-f.html
BlackBerry: BBM Welcomes Over 20 Million New Active Users in the First Week
http://press.blackberry.com/press/2013/bbm-welcomes-over-20-million-new-active-users-in-the-first-week.html
TechCrunch: BBM Now At 85M Monthly Active Users, 113M Registered Users, 500,000 Channels
http://techcrunch.com/2014/03/28/bbm-usage/
BlackBerry: BlackBerry Announces BBM for Windows Phone and Nokia X Platforms
http://press.blackberry.com/press/2014/blackberry-announces-bbm-for-windows-phone-and-nokia-x-platforms.html
BlackBerry: Leading OEMs to Preinstall BBM on Android-Based Smartphones
http://press.blackberry.com/press/2013/leading-oems-to-preinstall-bbm-on-android-based-smartphones-.html
BlackBerry: BBM Channels Announced at BlackBerry Live 2013
http://blogs.blackberry.com/2013/05/bbm-channels-announced/
BlackBerry: The Truth About Advertising and BBM
http://blogs.blackberry.com/2014/03/bbm-ads/
BlackBerry: BBM Voice and BBM Channels Now Available for Android and iPhone Customers
http://press.blackberry.com/press/2014/bbm-voice-and-bbm-channels-now-available-for-android-and-iphone-.html
BlackBerry: Coming next to BBM: Stickers
http://blogs.blackberry.com/2014/02/bbm-stickers-beta/
BlackBerry Case Study ML00017-009/Published 04/2014
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Further Reading BlackBerry: Losing the Battle Against Apple and Google, MarketLine Case Study, January 2012
Facebook: The Whatsapp acquisition, MarketLine Case Study, March 2014
Apple Inc.: Life after Steve Jobs, MarketLine Case Study, February 2014
BlackBerry Limited (formerly Research In Motion Limited), MarketLine Company Profile, February 2014
Global – Telecommunication Services, MarketLine Industry Profile, January 2014
Global – Mobile Phones, MarketLine Industry Profile, April 2014
BlackBerry Case Study ML00017-009/Published 04/2014
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proposal/Company Report BlackBerry Limited FEB2014 via MarketLine.pdf
COMPANY PROFILE
BlackBerry Limited (formerly Research In Motion Limited)
REFERENCE CODE: 09B9554F-030F-4E53-9C58-AE97FC84E2AC PUBLICATION DATE: 21 Feb 2014 www.marketline.com COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED.
TABLE OF CONTENTS
Company Overview..............................................................................................3
Key Facts...............................................................................................................3
Business Description...........................................................................................4
History...................................................................................................................5
Key Employees...................................................................................................11
Key Employee Biographies................................................................................12
Major Products and Services............................................................................17
Revenue Analysis...............................................................................................18
SWOT Analysis...................................................................................................20
Top Competitors.................................................................................................26
Company View.....................................................................................................27
Locations and Subsidiaries...............................................................................31
BlackBerry Limited (formerly Research In Motion Limited)
Page 2
© MarketLine
BlackBerry Limited (formerly Research In Motion Limited) TABLE OF CONTENTS
COMPANY OVERVIEW
BlackBerry Limited (formerly Research In Motion Limited) (BlackBerry or "the company") is engaged in the research, design, manufacture and sale of wireless communications products, services and software. The company operates offices in North America, Europe, Asia Pacific and Latin America. It is headquartered in Ontario, Canada and employed approximately 12,700 people as of March 2, 2013.
The company recorded revenues of $11,073 million during the fiscal year ended March 2013 (FY2013), a decrease of 39.9% compared to FY2012. The revenues decreased primarily due to lower shipment volumes and lower average selling prices. The operating loss of the company was $1,235 million during FY2013 compared to an operating profit of $1,497 million in FY2012. The net loss was $646 million in FY2013 compared to a net profit of $1,164 million in FY2012.
KEY FACTS
BlackBerry Limited (formerly Research In Motion Limited)Head Office 2200 University Avenue East Waterloo Ontario N2K 0A7 CAN
1 519 888 7465Phone
1 519 888 7884Fax
http://www.blackberry.comWeb Address
11,073.0Revenue / turnover (USD Mn)
MarchFinancial Year End
12,700Employees
BBToronto Ticker
BBRYNASDAQ Ticker
BlackBerry Limited (formerly Research In Motion Limited)
Page 3
© MarketLine
BlackBerry Limited (formerly Research In Motion Limited) Company Overview
BUSINESS DESCRIPTION
BlackBerry Limited (formerly Research In Motion Limited) (BlackBerry or "the company") designs, manufactures and markets wireless solutions for the worldwide mobile communications market. The company supports multiple wireless network standards by developing integrated hardware, software and services. BlackBerry provides platforms and solutions for accessing information, including e-mail, voice, instant messaging, short message service (SMS), internet and intranet-based applications and browsing. BlackBerry's products and services are used by both retail consumers and organizations. The company has operations in the US; the UK; Canada; Europe, Middle East and Africa; Latin America; and Asia Pacific regions.
The company's product lines include BlackBerry wireless solution, the BlackBerry Wireless handheld product line, BlackBerry PlayBook tablet, software development tools and other software and hardware. The company sells its products through collaboration with strategic partners and distribution channels, as well as its own support sales and marketing channels.
BlackBerry operates through four business lines: devices, service, software, and other.
The devices segment includes the sale of BlackBerry wireless hardware products, including BlackBerry handheld devices and BlackBerry PlayBook tablets. BlackBerry smartphones are designed to operate on a variety of carrier networks, including high speed packet access (HSPA)/HSPA+/ universal mobile telecommunications system (UMTS), global system for mobile communications (GSM)/general packet radio service (GPRS)/enhanced data rates for GSM evolution (EDGE), code division multiple access (CDMA)/evolution-data optimized (Ev-DO), and integrated digital enhanced network (iDEN).
The service business encompasses the billing services provided to its BlackBerry subscriber account base which is primarily a monthly infrastructure access fee charged to a carrier or reseller, and the carrier or reseller in turn bills the BlackBerry subscriber. BlackBerry service is provided through a combination of the company’s network operations center (NOC) and the wireless networks of the company’s carrier partners.
The company’s software offering includes BlackBerry Enterprise Service (BES) enterprise mobility management solution. BES brings together device management, security and mobile applications management for BlackBerry smartphones, BlackBerry PlayBook tablets and BlackBerry smartphones in a consolidated solution. It also provides a single console for managing BlackBerry, Android and iOS devices.
The company’s other segment includes revenue from accessories, non-warranty repairs, BlackBerry World and gains and losses on revenue hedge contracts.
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BlackBerry Limited (formerly Research In Motion Limited) Business Description
HISTORY
Mr. Michael Lazaridis and Mr. Douglas Fregin founded Research In Motion Limited (now BlackBerry) (RIM or "the company") in 1984. The company was incorporated in 1984 in Waterloo, Ontario under the Ontario Business Corporations Act. In 1988, RIM became the first wireless data technology developer in North America. The company introduced the Mobitex mobile point-of-sale solution in 1992. Four years later, RIM introduced the Inter@ctive Pager and the RIM original equipment manufacturer (OEM) Radio Modem.
In 1998, the company went public and its shares were listed on the Toronto Stock Exchange. In the same year, it also introduced the RIM Wireless PC Card. Subsequently, RIM 850 and RIM 950 pager-sized handhelds were introduced. RIM introduced its BlackBerry wireless e-mail solution in 1999. In the same year, the company's stock began trading on the NASDAQ Stock Exchange.
RIM launched BlackBerry 5810 with built-in phone, and T Support, a suite of technical support and software maintenance programs, in 2002. In the following year, the company introduced new devices with color displays. In 2004, RIM launched BlackBerry in several new markets in alliance with various carriers. In the same year, it introduced a program that allowed other device manufacturers to incorporate BlackBerry software. Subsequently, RIM introduced SureType, a combination of phone keyboard and QWERTY keyboard in the BlackBerry 7100 series. PalmSource (acquired by Japan-based ACCESS) and RIM launched e-mail application programming interface (API) with first version of the PalmSource mail client to enable development of secure mobile data applications.
In 2005, the company entered into collaborations with internet corporation Yahoo! and mass media company, America Online (AOL) to offer Yahoo! services and AOL instant messaging on the BlackBerry platform. In the same year, RIM expanded BlackBerry networks to Hungary, Czech Republic, Poland, Russia, Romania, Switzerland, Israel, and Latin America covering Argentina, Brazil, Chile, Colombia, Ecuador, Guatemala, El Salvador, Nicaragua, Panama, Peru, Mexico, Uruguay and Venezuela. In 2006, the company acquired enterprise voice mobility solutions provider, Ascendent Systems and introduced BlackBerry Pearl smartphone.
RIM and Eatoni Ergonomics, a provider of hardware and software for text entry on handheld devices agreed to work jointly on the next generation of predictive text technology in ambiguous keyboards, in 2007. In the same year, Spanish broadband and telecoms provider, Telefonica, and the company introduced BlackBerry Unite!, a free PC-based software offering that allows small groups to stay connected. Further, the companies also introduced BlackBerry Professional Software, a wireless communications and collaboration solution for small and medium-sized businesses. Subsequently, RIM launched Facebook application for BlackBerry smartphones.
In 2008, the company launched BlackBerry Certification Program, which provides certification testing service in support of the BlackBerry wireless platform. In the same year, German software company, SAP, and RIM entered into a co-innovation partnership to work on enterprise mobility, which enables mobile access to SAP enterprise applications through BlackBerry platform.
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During the same year, the company added a host of capabilities to its BlackBerry platform, including Microsoft Windows Live; and IBM Lotus collaboration software and information on demand solutions powered with Web 2.0. RIM launched BlackBerry Bold, the first BlackBerry to support tri-band high-speed downlink packet access (HSDPA) networks around the world and integrated global positioning system (GPS) and wireless fidelity (Wi-Fi). RIM partnered with Slacker to provide a free Slacker Personal Radio application, which would enable listeners to use radio even when not connected to a wireless network. The company also partnered with TiVo to provide customized TiVo services; and with MySpace to develop an integrated and customized MySpace Mobile service. British multinational telecoms company, Vodafone and RIM launched BlackBerry Storm, a clickable touch-screen smartphone.
In 2009, RIM acquired Chalk Media, a developer of mobile content deployment systems. In the same year, the company expanded its retail distribution in India through collaboration with Redington India to establish national retail distribution channels for BlackBerry smartphones. Subsequently, the company settled its historical stock option granting practices review commenced in 2006 with the Ontario Securities Commission, Canada, and the US Securities and Exchange Commission. In the same year, RIM acquired Certicom, a provider of software and hardware solutions for protecting content, applications and devices.
During the same year, RIM extended its push technology to consumer market with the launch of BlackBerry push application programming interface that enables developers to make push real-time content to BlackBerry smartphones, in 2009. In the same year, the company established a strategic alliance with an IT company, Hewlett-Packard to deliver a portfolio of solutions for business mobility on the BlackBerry platform. Subsequently, SAP and RIM introduced integrated solution that provides customers with access to the SAP Customer Relationship Management application on BlackBerry smartphones. Computer software vendor, Adobe and RIM collaborated to bring Adobe Flash Player support to the BlackBerry platform. The company signed a distribution agreement with Digital China Holdings for distribution of BlackBerry smartphones in China.
In 2010, RIM launched a new BlackBerry Client for IBM Lotus Quickr. The company also unveiled a new version of the BlackBerry Client for IBM Lotus Connections for enterprise social networking. In the same year, RIM introduced BlackBerry Enterprise Server Express, free server software that wirelessly and securely synchronizes BlackBerry smartphones with Microsoft Exchange or Microsoft Windows Small Business Server. Subsequently, the company signed an agreement to acquire QNX Software Systems from audio and infotainment equipment company, Harman International. In the same year, China Telecom and RIM launched the BlackBerry solution for China Telecom enterprise customers in China.
RIM and Motorola (owned by Google) entered into a settlement and license agreement to settle all outstanding worldwide litigation between the two companies, in 2010. In the same year, Yonhap News Agency launched Yonhap News application for BlackBerry smartphones in South Korea. Subsequently, an ecommerce company, eBay and RIM extended eBay application for BlackBerry smartphones in six more countries, including Australia, France, Germany, Italy, Spain and the UK. In the same year, RIM introduced BlackBerry-6, a version of the operating system for BlackBerry smartphones. During 2010, the company launched BlackBerry Podcasts, a free application and
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service that allows BlackBerry smartphone users to access podcasts from content providers. The company launched its advertising service for the BlackBerry Application Platform which helps developers integrate advertising in their BlackBerry smartphone applications. RIM also launched BlackBerry Enterprise Application Middleware, an application development platform that would enable commercial enterprise and corporate developers to build enterprise applications and services for BlackBerry smartphones. In the same period, RIM launched BlackBerry PlayBook tablet and BlackBerry Tablet OS.
In 2011, RIM launched two additional BlackBerry fourth generation (4G) PlayBook tablets, featuring support for long term evolution (LTE) and evolved high-speed packet access (HSPA+) wide area wireless networks. In the same year, RIM launched BlackBerry smartphones with BlackBerry Balance, a technology that makes possible the convenience of using a single BlackBerry smartphone for both work and personal purposes. Subsequently, Tune Talk, a mobile virtual network operator (MVNO) in Malaysia and the company launched the BlackBerry solution for Tune Talk customers in Malaysia. Also, China Telecommunications and RIM launched BlackBerry services for small businesses in China.
Communication products distributer, Telling Telecom signed a distribution agreement with the company for BlackBerry smartphones in China, in 2011. In the same year, Groupe Outremer Telecom, an alternative telecom operator in the French Overseas Regions, and RIM launched the BlackBerry solution for Outremer Telecom customers in Martinique, Guadeloupe, French Guyana, Reunion and Mayotte. In the same year, a consortium of certain technology companies, including RIM, won a bid for all of Nortel Networks' remaining patents and patent applications for a cash purchase price of $4.5 billion.
During the same year, RIM launched BlackBerry Management Center for small businesses. The company and China Mobile added the BlackBerry Bold 9788 smartphone to China Mobile's BlackBerry smartphone offering and the first to support the China's TD-SCDMA wireless network. Wataniya Telecom Maldives and the company introduced BlackBerry service in the Maldives. RIM and Tech Data, a wholesale distributor of technology products, signed an agreement that enables Tech Data to distribute BlackBerry devices, software and technical support services to its customers comprising over 60,000 value-added resellers in the US. The company introduced the BlackBerry Client for Microsoft SharePoint. RIM and MobiFone, a mobile operator in Vietnam launched BlackBerry services for MobiFone customers in Vietnam. The company launched BlackBerry Business Cloud Services for Microsoft Office 365, a RIM-hosted online service for midsized businesses and enterprises. RIM entered into the multi-platform Mobile Device Management marketplace with the introduction of BlackBerry Mobile Fusion, a next-generation enterprise mobility solution.
RIM unveiled the new BlackBerry 7.1 OS as well as updates to the BlackBerry Messenger (BBM), BlackBerry Traffic, and BlackBerry Travel applications, in 2012. Subsequently, the company launched BlackBerry Business Cloud Services for Microsoft Office 365, a service for business and government organizations that extends Microsoft Exchange Online to BlackBerry smartphones and allows customers to manage their BlackBerry deployments in the cloud.
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Further in the first quarter of 2012, BlackBerry 7 and BlackBerry 7.1 smartphones were awarded federal information processing standards (FIPS) 140-2 certification by the National Institute of Standards and Technology and the Communications Security Establishment, Canada. Subsequently, the company launched BlackBerry PlayBook OS 2.0. Further, in the first quarter of the same year, BlackBerry 7 Operating System was awarded a security certification by TUV Rheinland i-sed. Subsequently RIM introduced the BlackBerry Mini Keyboard, an accessory for the BlackBerry PlayBook tablet. In addition, Chinese state-owned telecoms operator, China Unicom, launched BlackBerry services for consumers in China.
During the second quarter of 2012, the company launched BlackBerry Mobile Fusion, a mobile device management solution for enterprise customers. Subsequently, RIM launched BlackBerry Mobile Voice System 5.1 for OpenScape Voice V6 from Siemens Enterprise Communications (now known as Unify). In the same quarter, the company and Globe Telecom launched BlackBerry 7 smartphones in the Philippines.
In the third quarter of 2012, the company launched its BlackBerry Curve 9320 smartphone in South Africa, Malaysia, Nigeria, Hong Kong, and Singapore. The company launched its 4G LTE BlackBerry PlayBook tablet with built-in support for cellular networks, in the same quarter. Subsequently, RIM partnered with e-Cycle to offer a new trade-up and recycle program to customers in the US. Further in the third quarter of 2012, the Global Enterprise Mobility Alliance (GEMA) and RIM agreed to jointly deliver global managed mobility solutions for multinational customers. Subsequently, RIM expanded its presence in Nigeria, with the opening of a BlackBerry-branded retail store in Lagos.
The company together with Bandung Institute of Technology officially opened the BlackBerry Innovation Center at the university's central campus in Bandung, Indonesia, in the last quarter of 2012. Subsequently, RIM was selected by EnStream, a joint venture of Bell Mobility, Rogers Wireless Partnership and TELUS Communications, to provide its Secure Element Manager (SEM) solution to manage credentials on wireless handsets in Canada that support Near Field Communication (NFC) services. Further in the same quarter, Visafone, a mobile operator based in Nigeria, and RIM launched BlackBerry services on Visafone's code division multiple access (CDMA) mobile network in Nigeria.
Later in the same year, the company launched BlackBerry Partners for enterprise portal to support independent software vendors, system integrators, application hosters, professional services organizations as well as corporate developers looking to enable or deploy BlackBerry 10 applications and services for enterprise customers. Subsequently, Nextel Mexico and RIM launched BlackBerry 7 smartphone for the new Nextel Evolution Network. Also in 2012, the Communications-Electronics Security Group (CESG) approved BlackBerry 7.1 operating system for the UK government use.
RIM's SEM solution for NFC mobile payments was approved by multinational financial services corporation, Visa, in January 2013. In the same month, the company launched its Enterprise Mobility Management (EMM) solution, BlackBerry Enterprise Service 10. Subsequently, ooVoo, an independent social video chat provider and RIM announced that ooVoo will introduce its next-generation high-definition (HD) video communications service on the BlackBerry 10 platform. During the same month, the company launched BlackBerry 10, a new BlackBerry platform.
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In February 2013, RIM changed its tickers on Toronto Stock Exchange and NASDAQ to BB and BBRY, respectively. In the same month, the company partnered with Trend Micro to incorporate Trend Micro Mobile Application Reputation Service in BlackBerry's internal, proprietary system for analyzing applications. Subsequently, Indonesian financial institution, PT Bank Permata, RIM, and mobile money leader Monitise, launched the BBM Money.
In March 2013, the company's BlackBerry Enterprise Service 10, a multi-platform enterprise mobility management solution was selected to manage the Secure Work Space for iOS and Android. In the same month, RIM added television content from broadcast television network, Univision and mass media company, Viacom for BlackBerry 10 customers in the US.
In May 2013, the US Department of Defense (DoD) approved BlackBerry 10 smartphones and BlackBerry PlayBook tablets with BlackBerry Enterprise Service 10 to be used on DoD networks. Subsequently, RIM unveiled BlackBerry Enterprise Instant Messaging (Enterprise IM) 3.0, a free update of the company's enterprise instant messaging solution. In the same month, the company launched the BlackBerry Q10 Smartphone in Philippines.
In June 2013, international law firm, Akin Gump Strauss Hauer & Feld chose to deploy 500 BlackBerry 10 devices and BlackBerry Enterprise Service 10 solution. In the same month, the company launched a new security solution that separates work and personal applications and data on iOS and Android devices.
RIM's shareholders approved a special resolution to change the company's name to BlackBerry, in July 2013. Subsequently, the company began operating under the name of BlackBerry Limited (formerly Research In Motion Limited) (BlackBerry or "the company").
In August 2013, medical device company, MAKO Surgical selected BlackBerry Enterprise Service 10 as its single enterprise mobility management solution. In the same month, Fixmo, a provider of mobile security and risk management solutions, partnered with the company, under which Fixmo Sentinel device integrity verification and tamper detection solution will be integrated with BlackBerry 10 platform. Subsequently, the company launched its fourth BlackBerry Tech Center in Brazil.
BlackBerry joined the Fast IDentity Online (FIDO) Alliance, an industry consortium revolutionizing online authentication with the first standards-based specifications, in September 2013. In the same month, the company signed a letter of intent agreement under which a consortium led by Fairfax Financial Holdings offered to acquire the company for approximately $4.7 billion. Subsequently, Empresas POLAR, a food and beverage company based in Venezuela, agreed to upgrade to the latest version of BlackBerry's enterprise mobility management solution, BlackBerry Enterprise Service 10.
In October 2013, the National Police of Colombia upgraded their BlackBerry smartphones and migrated to BlackBerry’s Enterprise Service 10. In the same month, BlackBerry Enterprise Service 10 and BlackBerry 10 smartphones were approved by NATO for classified communications up to the level of Restricted. Also in the October 2013, BlackBerry previewed a new multi-platform
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cloud-based EMM solution that will enable businesses to secure and manage corporate and personal devices.
Further in October 2013, professional services company, KPMG in Italy purchased 3,500 BlackBerry10 smartphones and migrated to BlackBerry’s new EMM solution Enterprise Service 10. Subsequently, Spanish banks NCG Banco selected BlackBerry Enterprise Service 10 as the company’s single EMM solution. Further in the same month, the Australian Transport Safety Bureau migrated to BlackBerry Enterprise Service 10.
In November 2013, BlackBerry entered into an agreement pursuant to which Fairfax and other institutional investors invested in BlackBerry through a $1 billion private placement of convertible debentures. Under the deal, Fairfax agreed to acquire $250 million principal amount of the company’s debentures. During November 2013, BlackBerry introduced the new BlackBerry Z30 smartphone with five inch display and BlackBerry 10.2 OS in Spain.
Further in November 2013, Indian financial services company, Financial Technologies, upgraded their mobile fleet to BlackBerry 10 smartphones and invested in BlackBerry’s enterprise mobility management solution. Subsequently, the company announced that BBM will be preinstalled on a variety of Android-based smartphones from leading OEMs across Africa, India, Indonesia, Latin America and the Middle East.
During December 2013, human services company, Rocky Mountain Human Services (RMHS), selected BlackBerry's EMM solution, BlackBerry Enterprise Service 10 along with BlackBerry Z10 smartphones in order to enhance its mobile productivity. In the same month, French multinational manufacturer of automobiles and motorcycles, PSA Peugeot Citroen announced plans to deploy 10,000 BlackBerry Z10 smartphones for its operations in France and Spain.
Further in December 2013, BlackBerry announced a bundling agreement with LG Electronics under which BBM will be preinstalled on LG smartphones. Subsequently in the same month, the company formed a joint device development and manufacturing agreement with Taiwanese multinational electronics contract manufacturing company, Foxconn, for the development of consumer smartphone for Indonesia and other fast-growing markets in 2014.
In January 2014, BlackBerry filed a lawsuit against Typo Products (Typo) claiming Typo Keyboard violated BlackBerry's intellectual property rights. In the same month, Fairfax agreed to purchase, through its subsidiaries, an additional $250 million principal amount of BlackBerry’s 6% unsecured subordinated convertible debentures. In the same month, DATEV, a software company and leading IT service provider in Europe for tax advisors, auditors and lawyers, selected BlackBerry Enterprise Service 10 (BES10) as its Enterprise Mobility Management (EMM) solution.
In February 2014, the company announced its intent to strategically divest majority of its real estate holdings in Canada in partnership with CBRE, a commercial real estate services firm serving owners, investors and occupiers. This initiative will further enhance the company’s financial flexibility, and will provide additional resources to support its operations as the business continues to evolve.
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KEY EMPLOYEES
CompensationBoardJob TitleName
Executive BoardInterim Chief Executive OfficerJohn Chen
240000 CADNon Executive BoardChair of BoardBarbara Stymiest
283333 CADNon Executive BoardDirectorTimothy Dattels
200000 CADNon Executive BoardDirectorClaudia Kotchka
166666 CADNon Executive BoardDirectorRichard Lynch
166666 CADNon Executive BoardDirectorBert Norberg
200000 CADNon Executive BoardDirectorPrem Watsa
Senior ManagementChief Financial OfficerJames Yersh
Senior ManagementPresident, Global Enterprise Services
John Sims
4974301 USDSenior ManagementChief Legal OfficerSteven E. Zipperstein
Senior ManagementPresident, Devices and Emerging Solutions
Ron Louks
Senior ManagementExecutive Vice President, Corporate Development and Strategic Planning
James S. Mackey
Senior ManagementSenior Vice President, MarketingMark Wilson
Senior ManagementPresident, Global SalesEric Johnson
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KEY EMPLOYEE BIOGRAPHIES
John Chen
Board: Executive Board Job Title: Interim Chief Executive Officer Since: 2013
Mr. Chen has been the Interim Chief Executive Officer at Blackberry since November 2013. Prior to joining BlackBerry, he served as the Chairman and Chief Executive Officer at Sybase. Mr. Chen previously held a series of executive positions at Siemens, Pyramid Technology, and Burroughs. He started his career as a Design Engineer at Unisys. In 2006, Mr. Chen was appointed as the co-Chair at the Secure Borders and Open Doors Advisory Committee. Additionally, he chaired the US-China Policy Advisory Roundtable for the Center for Strategic and International Studies (CSIS). Mr. Chen serves as a Director at Walt Disney and Wells Fargo. He is also a Trustee at Caltech and a Board Member at the National Committee on the US-China Relations. Mr. Chen is also a Member at CFR, the National Trustee at the First Tee and the Governor at the San Francisco Symphony.
Barbara Stymiest
Board: Non Executive Board Job Title: Chair of Board Since: 2012 Age: 56
Ms. Stymiest has been the Chair of Board at Blackberry since 2012. She has been a Director at the company since 2007. From 2004 to 2011, Ms. Stymiest was a Member of the Group Executive at the Royal Bank of Canada. Prior to that, she held positions as the Chief Executive Officer at TSX Group, the Executive Vice-President & Chief Financial Officer at BMO Nesbitt Burns and as a Partner at Ernst & Young. Ms. Stymiest is currently a Director at George Weston, Sun Life Financial, University Health Network and the Canadian Institute for Advanced Research.
Timothy Dattels
Board: Non Executive Board Job Title: Director Since: 2012 Age: 53
Mr. Dattels has been a Director at Blackberry since 2012. He is a Senior Partner at TPG Capital. Prior to joining TPG, Mr. Dattels served as a Partner and Managing Director at Goldman Sachs and
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was the Head of Investment Banking for all Asian countries other than Japan. He is a Trustee at the San Francisco Ballet, San Francisco Jazz and the World Affairs Council.
Claudia Kotchka
Board: Non Executive Board Job Title: Director Since: 2011 Age: 60
Ms. Kotchka has been a Director at Blackberry since 2011. She is an Independent Consultant to Fortune 500 companies on innovation, strategy and design. Ms. Kotchka is also a Guest Lecturer at business schools and universities, including Stanford University, Syracuse University, the University of Miami, and Wake Forest University. She retired from Procter and Gamble in 2009 after holding various executive roles, including the Vice President, Design Innovation & Strategy from 2001 to 2009 and the Vice President, eBusiness Ventures in 2000. Ms. Kotchka also held the position of the Vice President, Marketing of Global Feminine Care from 1999 to 2000 and the Vice President, Design & Marketing Knowledge for P&G Worldwide from 1997 to 1999. She is a Member of the Board of Trustees at the Smithsonian Design Museum and an Advisor at Stanford University Institute of Design. Ms. Kotchka also served as a Member of the Board of Directors at Audubon Society and Reading for Life.
Richard Lynch
Board: Non Executive Board Job Title: Director Since: 2013 Age: 64
Mr. Lynch has been a Director at Blackberry since February 2013. He is the President at FB Associates, which provides advisory and consulting services. Prior to his current role, Mr. Lynch served as the Executive Vice-President & Chief Technology Officer at Verizon Communications and the Executive Vice-President & Chief Technology Officer at Verizon Wireless. He is a Fellow at the Institute of Electrical and Electronic Engineers and currently serves as a Director at TranSwitch and Ruckus Wireless. Mr. Lynch has also served on a number of professional organizations, including the GSM Association, the CDMA Development Group, the Federal Communications Commission Technical Advisory Committee and the Communications Security Reliability and Interoperability Council.
Bert Norberg
Board: Non Executive Board Job Title: Director Since: 2013
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Age: 56
Mr. Norberg has been a Director at Blackberry since February 2013. From 2009 to 2012, he served as the President and Chief Executive Officer at Sony Ericsson. For few months in 2012, Mr. Norberg served as the Chairman at Sony Mobile. Prior to that, he held various executive roles at Ericsson. Mr. Nordberg currently serves as the Chairman at Vestas Wind Systems and as a Director at Svenska Cellulosa Aktiebolaget (SCA) and Electrolux. He serves as a Representative at the Chamber of Commerce & Industry of Southern Sweden and as a Member of the Hewlett Packard Communications, Media & Entertainment Board of Industry Advisors.
Prem Watsa
Board: Non Executive Board Job Title: Director Since: 2012 Age: 63
Mr. Watsa has been a Director at Blackberry since 2012. He is currently the Chairman and Chief Executive Officer at Fairfax Financial Holdings (Fairfax). Mr. Watsa is also the Vice President at Hamblin Watsa Investment Counsel, the Chairman at Odyssey Re, Crum & Forster and Northbridge Financial. He also serves as a Director at Zenith National. Prior to joining Fairfax, Mr. Watsa held various positions at Confederation Life Insurance Company and GW Asset Management. He is also a Member of the Board of Trustees at the Hospital for Sick Children Foundation and a Member of the Advisory Board at Richard Ivey School of Business. Mr. Watsa is also a Member of the Board of Directors at the Royal Ontario Museum Foundation, and the Chairman of the Investment Committee at St. Paul’s Anglican Church in Toronto.
James Yersh
Board: Senior Management Job Title: Chief Financial Officer Since: 2013
Mr. Yersh has been the Chief Financial Officer at Blackberry since November 2013. He previously served as the Senior Vice President and Controller at BlackBerry. Mr. Yersh was also the company’s Head of Compliance and advised the Board and executive management on strategic initiatives. Prior to joining BlackBerry in 2008, he held various senior positions at Cognos and Deloitte.
John Sims
Board: Senior Management Job Title: President, Global Enterprise Services Since: 2014
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Mr. Sims has been the President, Global Enterprise Services at Blackberry since January 2014. He joined the company from SAP where he served as the President at SAP’s Mobile Services business. Before joining SAP, Mr. Sims held leadership positions at 724 Solutions, TANTAU Software, Intrado and Tandem Computers. He also serves on the Board of Directors and Executive Committee at CTIA.
Steven E. Zipperstein
Board: Senior Management Job Title: Chief Legal Officer Since: 2012
Mr. Zipperstein has been the Chief Legal Officer at Blackberry since 2012. He has over 30 years of legal experience and most recently served as the General Counsel at Verizon Wireless from 2003 through 2011. Prior to the formation of Verizon, Mr. Zipperstein served as the Deputy General Counsel at GTE. Before joining GTE/Verizon, he worked for almost 10 years at the US Department of Justice as a Federal Prosecutor. Previously, Mr. Zipperstein served as the Law Review Editor and Member of the Moot Court Board at U.C. Davis Law School.
Ron Louks
Board: Senior Management Job Title: President, Devices and Emerging Solutions Since: 2014
Mr. Louks has been the President, Devices and Emerging Solutions at Blackberry since January 2014. He was previously the Chief Executive Officer at OpenNMS Group. Prior to that, Mr. Louks held many leadership positions, including as the Chief Strategy Officer at HTC America and the Chief Technology Officer at Sony Ericsson.
James S. Mackey
Board: Senior Management Job Title: Executive Vice President, Corporate Development and Strategic Planning Since: 2013
Mr. Mackey has been the Executive Vice President, Corporate Development and Strategic Planning at Blackberry since December 2013. Previously, he was the Senior Vice President of Corporate Development at Open Text, as well as the Head of Corporate Development at SAP.
Mark Wilson
Board: Senior Management
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Job Title: Senior Vice President, Marketing Since: 2014
Mr. Wilson has been the Senior Vice President, Marketing at Blackberry since January 2014. Previously, he was the Chief Marketing Officer at Avaya. Mr. Wilson previously served as the Senior Vice President of Corporate and Field Marketing at Sybase, and has extensive experience in marketing roles at AT&T and KPMG.
Eric Johnson
Board: Senior Management Job Title: President, Global Sales Since: 2014
Mr. Johnson has been the President, Global Sales at Blackberry since January 2014. He most recently served as the Senior Vice President and General Manager at SAP’s Global Database and Technology. Prior to that, Mr. Johnson was the Senior Vice President and General Manager of Platform and Analytics Sales for North America, at SAP. In the years preceding, he served in several capacities at Sybase, including as the Senior Vice President and General Manager for North America and the Senior Vice President and General Manager Europe, Middle East and Africa. Mr. Johnson also served as the Senior Vice President and the General Manager for Financial Services.
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MAJOR PRODUCTS AND SERVICES
BlackBerry Limited (formerly Research In Motion Limited) (BlackBerry or "the company") is engaged in the research, design, manufacture and sale of wireless communications products, services and software. The company's key products and services include the following:
Consumer:
Smartphone devices Chat applications Voice applications Video applications Application software BlackBerry wireless platform Software development tools
Enterprise solutions:
Device management Security solutions Unified communications Applications Devices Cloud solutions Enterprise instant messaging Mobile voice system
Brands: Blackberry BBM PlayBook
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REVENUE ANALYSIS
Overview
The company recorded revenues of $11,073 million during the fiscal year ended March 2013 (FY2013), a decrease of 39.9% compared to FY2012. For FY2013, the US, the company's largest geographic market, accounted for 20.2% of the total revenues.
BlackBerry is organized and managed as a single reportable business segment. However, the company generates revenues through four business lines: devices (60% of the total revenues during FY2013), service (35.3%), software (2.4%) and other (2.3%).
Revenues by division
During FY2013, the devices business line recorded revenues of $6,648 million, a decrease of 51.8% compared to FY2012.
The service business line recorded revenues of $3,910 million in FY2013, a decrease of 4% compared to FY2012.
The software business line recorded revenues of $261 million in FY2013, a decrease of 17.9% compared to FY2012.
The other business line recorded revenues of $254 million in FY2013, an increase of 7.2% FY2012.
Revenues by geography*
The US, BlackBerry's largest geographical market, accounted for 20.2% of the total revenues in FY2013. Revenues from the US reached $2,235 million in FY2013, a decrease of 46.6% compared to FY2012.
The UK accounted for 11.2% of the total revenues in FY2013. Revenues from the UK reached $1,238 million in FY2013, a decrease of 35.5% compared to FY2012.
Canada accounted for 6% of the total revenues in FY2013. Revenues from Canada reached $661 million in FY2013, a decrease of 47.5% compared to FY2012.
Europe, Middle East and Africa (excluding the UK) accounted for 29.5% of the total revenues in FY2013. Revenues from Europe, Middle East and Africa (excluding the UK) reached $3,264 million in FY2013, a decrease of 43.2% compared to FY2012.
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BlackBerry Limited (formerly Research In Motion Limited) Revenue Analysis
Latin America accounted for 19.1% of the total revenues in FY2013. Revenues from Latin America reached $2,114 million in FY2013, a decrease of 20.1% compared to FY2012.
Asia Pacific accounted for 14.1% of the total revenues in FY2013. Revenues from Asia Pacific reached $1,561 million in FY2013, a decrease of 41.6% compared to FY2012.
*Percentages are rounded off.
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SWOT ANALYSIS
BlackBerry Limited (formerly Research In Motion Limited) (BlackBerry or "the company") is engaged in the research, design, manufacture and sale of wireless communications products, services and software. Strong product design, engineering and R&D capabilities allow BlackBerry to develop products that will enable the company to defend and enhance its market share in a highly competitive market. However, intense competition could impact the company's market share and future growth avenues.
WeaknessesStrengths
Delayed product launches could negatively impact business
Strong product design, engineering and R&D capabilities
Declining financial performanceDiversified geographic presence
ThreatsOpportunities
Intense competition could impact the company's market position
Positive outlook for smartphone and tablet markets
Declining average selling prices may strain margins
Partnership with Foxconn to provide strong volume growth
Rapid technological changes and short product life cycles
Growing enterprise customer base to boost topline
Strengths
Strong product design, engineering and R&D capabilities
The company has strong product design, engineering, research and development (R&D) capabilities. BlackBerry's R&D strategy seeks to provide broad market applications for products derived from its technology base. As of March 2, 2013, the company's R&D team consisted of approximately 6,000 full time employees. During FY2013, BlackBerry's R&D expense was approximately $1.5 billion, representing approximately 13% of the company's overall revenues. The company's R&D efforts are focused primarily on developing new devices for current and emerging wireless network technologies and market segments; developing core technology and platforms for next generation air interfaces and networks, including evolution of 3G and 4G wireless networks; developing server and desktop software for enterprise and consumer environments; developing infrastructure systems to provide the underlying support for wireless network and internet connectivity; and improving manufacturing and testing technologies, among others. In addition, BlackBerry is also engaged in longer term fundamental research both directly and by selective funding of university research projects.
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The company developed and employed a range of technologies and processes that resulted in the development of competitive products. BlackBerry's component packaging and attachment technology combined with proprietary software and firmware features allowed it to customize its core proprietary hardware designs to address new applications, network protocols and transmission frequencies. Its radio transceiver technology supports multiple protocols in the wireless data communications market, supporting its position as a primary supplier of wireless and related hardware and software products. BlackBerry's robust R&D capabilities have also allowed it to develop its own radio code stack and incorporate this radio code stack into the processors that are deployed in BlackBerry smartphones. Additionally, QNX, a subsidiary of the company, has developed a mobile computing platform utilizing the unique micro kernel POSIX certified tablet operating system (OS). This OS supports the first generation of professional grade BlackBerry PlayBook tablets and is the basis for BlackBerry 10 smartphones.
Strong product design, engineering and R&D capabilities allow BlackBerry to develop products that will enable the company to defend and enhance its market share in a highly competitive market.
Diversified geographic presence
Blackberry has a diversified geographic presence. The company has operations across the globe, including in the US; the UK; Canada; Europe, Middle East and Africa; Latin America; and the Asia Pacific regions. Further, Blackberry has a balanced revenue mix in terms of geographies. During FY2013, the US, the company's largest geographic market, accounted for 20.2% of its overall sales. This was followed by the UK (11.2%), Canada (6%), Europe, Middle East and Africa (29.5%), Latin America (19.1%), and Asia Pacific (14.1%). The company's wide geographic footprint reduces its exposure to risks associated with a particular market. It also provides Blackberry with benefits such as cost reductions through economies of scale. In addition, this geographic diversity provides proximity to customers, enabling the development of close relationships. Further, the company can leverage growth opportunities across several regions.
Weaknesses
Delayed product launches could negatively impact business
BlackBerry has encountered delays relating to new product introductions over the past few years, and delivering new products on a timely basis has proven more challenging than the company had anticipated. The company has been unable to keep pace with the rapidly evolving mobile market where Apple and Google's Android platform are adding customers at a fast pace. For instance, in FY2013, the introduction of BlackBerry's first BlackBerry 10 smartphones was delayed, in part, because of complexities in the development and integration of a completely new technology platform. This resulted in lower than expected unit shipments as customers worked through inventory and awaited the launch of the new BlackBerry 10 smartphones. In addition, the company repeatedly delayed the launch of BlackBerry Bold 9900 model in 2011.
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Moreover, BlackBerry had several glitches with its products which severely hampered the company's ability to seamlessly move between platforms and product lines. The company's inability to launch a major BlackBerry model has been one of the reasons for losing the market share to Apple and Google. If the company experiences further delays relating to the launch of BlackBerry smartphones or other products or services, it will have a material adverse impact on the company's business, results of operations, financial condition and future prospects.
Declining financial performance
BlackBerry recorded weak financial performance in the recent times. The company's revenues declined from $19,907 million in FY2011 to $11,073 million in FY2013, representing a compound annual rate of change (CARC) of 25% during that period. In FY2013, BlackBerry's revenues declined 39.9% year-on-year (YoY). The revenues decreased primarily due to lower shipment volumes and lower average selling prices of hardware products. Continuous decline also impacts the company's profits and margins. In FY2013, BlackBerry recorded an operating loss of $1,235 million compared to operating profits of $1,497 million and $4,636 million in FY2012 and FY2011, respectively. In addition, the company's operating margins declined from 23.3% to -11.2% during FY2011-13, and its net margins declined from 17.1% to -5.8% during the same period.
BlackBerry also witnessed a decline in its cash position. The company's cash from operations declined from $4,009 million in FY2011 to $2,303 million in FY2013, representing a CARC of 24% during that period. Moreover, BlackBerry's free cash flow declined at a CARC of 20% during FY2011-13 to reach $1,890 million. Declining financial performance positions BlackBerry at a competitive disadvantage and also negatively impacts investor confidence.
Opportunities
Positive outlook for smartphone and tablet markets
The smartphones and tablets market is expected to grow at a robust pace in the medium term. According to industry estimates, the smartphone shipments are expected to grow at a compounded annual growth rate (CAGR) of 13.3% between 2013 and 2017. Moreover, in 2013 the smartphone shipments are expected to surpass those of feature phones and account for approximately 52% of all global mobile phone shipments. Furthermore, the demand for tablets is also increasing. The shipment of tablet PCs is estimated to grow from 144.5 million units in 2012 to more than 410 million units by 2017, growing at a CAGR of 23.2% for the same period. BlackBerry has a significant position in the global smartphones and tablets market. The company offers BlackBerry branded smartphones and PlayBook branded tablets, designed to operate on a variety of carrier networks. Robust outlook for the smartphone market and tablet market will increase the company's sales in the coming years.
Partnership with Foxconn to provide strong volume growth
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The company is expected to achieve strong volume growth through its partnership with Taiwanese multinational electronics contract manufacturer, Foxconn. In December 2013, the company entered into a five-year strategic partnership with Foxconn to jointly develop and manufacture certain new BlackBerry devices and manage the inventory associated with those devices. The initial focus of the partnership will be a smartphone for Indonesia and other fast-growing markets targeting early 2014. The first Foxconn-built BlackBerry smartphone is expected to be a low cost model targeting Indonesia and other emerging countries. This partnership enables BlackBerry to focus on its core strengths, including design, enhanced security, software development and enterprise mobility management, while simultaneously addressing fast-growing markets leveraging Foxconn’s scale thus allowing it to compete more effectively. Moreover, this partnership allows Blackberry to save costs since Foxconn is able to buy components at better prices and use standardized components. Foxconn will also take care of the inventory which could help Blackberry in avoiding any financial risks due to excess inventory.
The company’s strong brand image coupled with the Foxconn scale of operations would provide strong volume growth boosting revenues as well as allow it to focus on core strengths targeting enterprise clients.
Growing enterprise customer base to boost topline
The company has won a number of new client engagements in the recent past, which is expected to boost its topline in the coming years. At the end of December 2013 the company reported an installed base of 30,000 commercial and test servers, up from 25,000 in September 2013. Blackberry is one of the leading mobile device management providers with global enterprise customer base exceeding 80,000. The company has also won a number of new contracts in the recent past. For instance, in December 2013, human services company, Rocky Mountain Human Services (RMHS) selected BlackBerry's EMM solution BlackBerry Enterprise Service 10 (BES10) along with BlackBerry Z10 smartphones to enhance its mobile productivity. In the same month, French multinational manufacturer of automobiles and motorcycles, PSA Peugeot Citroen announced plans to deploy 10,000 BlackBerry Z10 smartphones for its operations in France and Spain.
Similarly in November 2013, Indian financial services company, Financial Technologies upgraded its mobile fleet to BlackBerry 10 smartphones and invested in BlackBerry’s enterprise mobility management solution. Earlier in October 2013, professional services company, KPMG in Italy purchased 3,500 BlackBerry10 smartphones and migrated to BlackBerry’s new BES 10 platform. Subsequently, a Spanish bank, NCG Banco selected BlackBerry Enterprise Service 10 as the company’s single EMM solution. In the same month, the Australian Transport Safety Bureau migrated to BES 10 platform. Growing adoption of the BES 10 platform is expected to boost the client base of the company thus boosting revenues in the coming years.
Threats
Intense competition could impact the company's market position
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BlackBerry Limited (formerly Research In Motion Limited) SWOT Analysis
BlackBerry is engaged in an industry that is highly competitive and rapidly evolving, and has experienced intense competition from a number of companies. Increased competition in the consumer segment declined the company's global market share over the past several years relative to companies such as Apple with its iOS ecosystem, and companies that build smartphones based on the Android ecosystem, such as Samsung. Providers of mobile operating system platforms that compete with the company's BlackBerry platform include Apple, Google, Microsoft and Nokia. In the wireless data communications access market, the company competes with Apple, Amazon, Dell, Fujitsu, General Dynamics, Hitachi America, HTC, Huawei Technologies, LG Electronics, Mitsubishi, NEC, Nokia, Samsung, Sharp, Sony and ZTE.
In addition, BlackBerry faces competition from companies focused on providing middleware to facilitate end-to-end wireless messaging solutions. Companies in this category include AirWatch, BoxTone, Citrix Systems, Good Technologies, IBM, Microsoft, Mobile Iron, Notify Technology, Openwave Systems, Seven Networks and Sybase. Some of the company's competitors have greater name recognition, larger customer bases, and significantly greater financial, technical, marketing, public relations, sales, distribution and other resources than the company does, and such competitors have increased their market share at the expense of the company. This is particularly the case in the tablet segment where BlackBerry has faced challenges entering and in which there are many established computer and wireless communications industry participants with significantly greater experience, infrastructure and distribution channels than the company. Intense competition could impact the company's market share and future growth avenues.
Declining average selling prices may strain margins
The average selling prices (ASPs) of mobile devices and smartphones continue to decline. According to industry estimates, the ASPs of smartphones are expected to touch $337 in 2013, a decline of 12.8% compared to $387 in 2012. The smartphone ASPs are further projected to gradually decline to $265 by 2017. Moreover, the popularity of Google's Android platform has made entry into the smartphone market easier for a number of hardware manufacturers, targeting the mid-to-low range of the smartphone market. Also, the popularity of Android platform has resulted in increasing commoditization in the smartphone market, impacting customer choices. The declining average selling prices may impact the company's gross margins thus adversely impacting Blackberry’s overall profitability.
Rapid technological changes and short product life cycles
The wireless communications industry is characterized by rapid technological changes, evolving industry standards, frequent new product introductions and short product life cycles. Consequently, BlackBerry's operational performance is directly correlated to the company's ability to keep pace with these technological advancements and offer products at competitive prices. The process of developing new technology however is complex and is associated with uncertainty. BlackBerry's business will be hampered if it is unable to accurately predict emerging technological trends and keep pace with the changing consumer preferences. Additionally, if the company's competitors launch any new technologically advanced products, the demand for BlackBerry's products will be adversely impacted.
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In addition to the uncertainty associated with the rapid technological changes, the short life cycles associated with the industry will adversely affect the return on the investments for new product launches. A technology could become obsolete before the costs are recovered. All these factors impact the revenue generation potential and the profitability of operations adversely. BlackBerry has in the recent past suffered market share losses partly due to its inability to predict the end user demand accurately and partly as its competitors launched advanced products at a faster pace. Any such rapid technological advancement could further impact the company's operations adversely.
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TOP COMPETITORS
The following companies are the major competitors of BlackBerry Limited (formerly Research In Motion Limited)
Nokia Corporation Samsung Electronics Co., Ltd. Apple Inc. HTC Corporation LG Electronics, Inc. Google Inc. Dell Inc. Microsoft Corporation Amazon.com, Inc. Fujitsu Limited General Dynamics Corporation Mitsubishi Corporation NEC Corporation Sharp Corporation Citrix Systems, Inc. International Business Machines Corporation Openwave Systems Inc. SAP AG Sony Mobile Communications AB ZTE Corporation
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BlackBerry Limited (formerly Research In Motion Limited) Top Competitors
COMPANY VIEW
An excerpt from the 'Management's Discussion and Analysis of Financial Condition and Results of Operations' section is given below. The statement has been taken from the company's 40-F filing for FY2013.
Overview
A global leader in wireless innovation, the Company revolutionized the mobile industry with the introduction of the BlackBerry solution in 1999. Today, the Company aims to inspire the success of its millions of customers around the world by continuously pushing the boundaries of mobile experiences. Founded in 1984 and based in Waterloo, Ontario, the Company operates offices in North America, Europe, Asia Pacific and Latin America. Effective January 30, 2013, the Company began to operate around the world under the iconic name BlackBerry. The Company will seek shareholder approval to change the legal name of the Company to BlackBerry at the Company's next Annual and Special Meeting. The Company's common shares are listed on the NASDAQ Global Select Market (NASDAQ: BBRY) and the Toronto Stock Exchange (TSX: BB).
With the BlackBerry platform, the Company believes it offers a market-leading wireless communications experience with push-based connectivity, industry-leading security and enterprise manageability, excellent radio performance and differentiated social applications, such as BlackBerry Messenger ("BBM"), that provide immediacy, productivity and collaboration. The wireless communications market has increasingly evolved in recent years and there is significant overlap between consumer and enterprise segments. The enterprise market is currently characterized by a combination of enterprise-deployed devices and devices that are purchased by consumers but also used in the corporate environment, commonly referred to as "Bring Your Own Device" ("BYOD"). The Company has encountered challenges adapting to the BYOD movement as some information technology ("IT") departments that previously required employees to use the BlackBerry wireless solution because of its emphasis on security and reliability are permitting employees to choose devices offered by the Company's competitors, who are increasingly promoting the merits of their own security and reliability, and this has impacted the Company's enterprise subscriber account base. To address this evolution of the market, the Company has introduced products including its first BlackBerry 10 smartphones with BlackBerry Balance and BlackBerry Enterprise Service 10, which give IT departments the ability to securely manage BlackBerry devices and other operating system platforms through a single unified interface and to securely protect corporate data on an employee's personal smartphone or tablet. The Company expects that with the introduction of BlackBerry 10 smartphones, which has been in certain markets in the fourth quarter of fiscal 2013 and will continue in the first quarter of fiscal 2014, its position in the BYOD enterprise market will strengthen and the Company will also continue to seek partnerships that will further enable the Company to have a complete BYOD offering.
BlackBerry is the leading smartphone in several markets around the world. The primary regions experiencing recent growth for the Company include Asia Pacific and Latin America. The Company has experienced a decline in revenue and market share, particularly in the United States. Intense
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BlackBerry Limited (formerly Research In Motion Limited) Company View
competition is negatively impacting the Company's results in that market, as did the lack of a Long Term Evolution ("LTE") product and high-end consumer offering prior to the launch of the first BlackBerry 10 smartphone in the United States on March 22, 2013. The decline can also be attributed to consumer preferences for devices with access to the broadest number of applications, such as those available in the iOS and Android environments. Market share has also been impacted by the significant number of new Android-based competitors that have entered the market. In addition, the increased desire by carriers to sell devices that operate on the new, faster LTE networks being built has also impacted the Company's market share, as these networks feature faster download speeds and allow carriers to offer higher-value data plans. The Company's first LTE smartphones were launched with the introduction of the Company's first BlackBerry 10 smartphones in certain markets in the fourth quarter of fiscal 2013 and in the United States on March 22, 2013. Some of the Company's main competitors include Apple Inc., Google Inc., Samsung Electronics Co., Ltd, HTC Corporation, Huawei Technologies Co., Ltd, Microsoft Corporation, Nokia Corporation and ZTE Corporation.
BlackBerry World, the Company's comprehensive electronic content distribution catalogue, is available to customers in over 100 markets globally, with other markets to follow. The continued expansion of the catalogue of applications and other content is an important element of the Company's successful transition to its next-generation BlackBerry 10 smartphones and the success of the BlackBerry PlayBook tablet, and requires a substantial investment of internal resources for development of the infrastructure, improvement of developer and consumer interfaces and advertising costs. There are over 100,000 applications available for BlackBerry 10 smartphones and over 200,000 applications in total available through BlackBerry World.
The Company currently has a strong balance sheet with negligible debt and approximately $2.9 billion in cash, cash equivalents and investments as of March 2, 2013. In fiscal 2013, the Company had annual sales of $11.1 billion and the Company incurred a net loss from continuing operations of $628 million, or $1.20 per share diluted.
The Company made a number of strategic acquisitions in recent years including QNX Software Systems ("QNX"), Certicom, Torch Mobile, The Astonishing Tribe, Gist and Tungle that are intended to accelerate the Company's ability to innovate and deliver compelling products to market. In June 2011, the Company also participated in a successful bid for the Nortel Networks Corporation ("Nortel") patent portfolio as a part of a consortium of companies. The Nortel patents obtained eliminated the Company's exposure to those patents and are expected to strengthen the Company's patent portfolio and its position in respect of patent litigation and licensing.
Operational and Strategic Review
The Company is in the ongoing process of completing the largest platform and organizational transition in its history, with a view to better position the Company to achieve growth and to continue to be a leading company in the wireless communications industry. The Company's fiscal 2013 results reflect the product and platform transition underway, ongoing market challenges and the competitive dynamics across many markets. As part of its ongoing efforts, the Company has continued its operational and strategic review, which includes re-evaluating its product portfolio, operations,
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manufacturing and research and development strategy. In fiscal 2013, the Company implemented various initiatives as part of its operational and strategic review, and has now substantially completed its anticipated headcount reductions previously announced in an effort to align the Company's cost structure to enable it to move through this transition and deliver on long-term stakeholder value. J.P. Morgan Securities LLC and RBC Capital Markets continue to act for the Company in reviewing the Company's business and financial performance. They have been tasked with helping the Company with its operational and strategic review and evaluating the relative merits and feasibility of various financial strategies, including opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives. During fiscal 2013, the Company also implemented major changes throughout the organization, which it believes have made the Company leaner and more nimble and are intended to provide a solid foundation for continued innovation and execution.
Sources of Revenue
The Company's primary revenue stream is generated by the BlackBerry wireless solution, which includes sales of BlackBerry handheld devices and BlackBerry PlayBook tablets, services and software. The BlackBerry wireless solution provides users with a wireless extension of their work and personal email accounts, including Microsoft Outlook, IBM Lotus Notes, Novell GroupWise and many ISP email services.
The Company generates hardware revenues from sales, primarily to carriers and distributors, of BlackBerry handheld devices, which provide users with the ability to send and receive wireless messages and data. The Company's BlackBerry handheld devices also incorporate a mobile phone, web-browsing and multimedia capabilities and enable the use of data functions such as calendar, address book, task and memo lists and other functions associated with personal organizers. During fiscal 2013, the Company continued to launch new BlackBerry handheld devices that incorporate the BlackBerry 7 operating system as well as continuing major BlackBerry 7 upgrade programs in Canada, the United States and the United Kingdom. As part of the Company's ongoing operational and strategic review, the Company intends to streamline the BlackBerry smartphone product portfolio to offer a smaller number of devices in market at any given time. The successful launch and customer adoption of the Company's next-generation BlackBerry 10 platform and the delivery of high quality, full-featured BlackBerry 10 smartphones remain the Company's number one priority. The Company held the official BlackBerry 10 launch event on January 30, 2013, and the first BlackBerry 10 smartphones were introduced into the market on January 31, 2013 in the United Kingdom and February 5, 2013 in Canada. More recently, the Company launched the BlackBerry Z10 smartphone in the United States with AT&T on March 22, 2013 and with T-Mobile and Verizon soon thereafter. The Company also announced that the BlackBerry Q10 smartphone will be launched in international markets beginning in April 2013.
The BlackBerry 10 mobile computing platform is a re-designed, re-engineered, and re-invented BlackBerry platform that creates a new and unique mobile computing experience. The Company's first two BlackBerry 10 products, the LTE-enabled BlackBerry Z10 and BlackBerry Q10 smartphones, offer a faster, smarter and smoother experience. The Company also launched the BlackBerry Enterprise Service 10, the Company's new enterprise mobility management solution. BlackBerry
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BlackBerry Limited (formerly Research In Motion Limited) Company View
Enterprise Service 10 brings together device management, industry leading security and mobile applications management for BlackBerry smartphones, including the new BlackBerry 10 smartphones and BlackBerry PlayBook tablets in a consolidated solution. It also provides a single console for managing BlackBerry, Android and iOS devices. To assist enterprise customers with the transition to BlackBerry Enterprise Service 10, the Company launched the BlackBerry 10 Ready program to help enterprise customers prepare their environments for BlackBerry 10. To date, more than 3,500 unique companies have registered for the program. The Company intends to leverage the early success of BlackBerry 10 by intensifying its strategic focus on opportunities in mobile computing verticals such as auto, industrial, networking, healthcare, security and defense applications, expanding its secure network infrastructure for uses beyond those currently deployed by BlackBerry and through potential licensing opportunities.
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LOCATIONS AND SUBSIDIARIES Head Office
BlackBerry Limited (formerly Research In Motion Limited) 2200 University Avenue East Waterloo Ontario N2K 0A7 CAN P:1 519 888 7465 F:1 519 888 7884 http://www.blackberry.com
Other Locations and Subsidiaries
BlackBerry – Ottawa, CanadaBlackBerry United States 4000 Innovation Drive5000 Riverside Drive KanataIrving Ontario K2K 3K1Texas 75039 CANUSA
BlackBerry ArgentinaBlackBerry – Mississauga, Canada Edificio Laminar Plaza4701 Tahoe Boulevard Ing. Butty 240, piso 4° y 5°Mississauga Buenos Aires C1001AFBOntario L4W 0B5 ARGCAN
BlackBerry AustraliaBlackBerry Europe Level 6200 Bath Road 100 Pacific HighwaySlough North SydneyBerkshire SL1 3XE New South Wales 2060GBR AUS
BlackBerry DelhiBlackBerry Beijing Cyber TerracesPacific Century Place 2A Level 18Workers Stadium Road Building No 5, Tower AIBM Tower, 14th Floor DLF Phase 3North Chaoyang District Gurgaon 122002Beijing 100027 INDCHN
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BlackBerry Limited (formerly Research In Motion Limited) Locations and Subsidiaries
BlackBerry KSABlackBerry South Africa Centria Mall Office TowerPalazzo Towers West 4th FloorMonte Casino Olaya Street/Tahliya Street IntersectionWilliam Nicol Drive Riyadh 11423Fourways SAUJohannesburg 2086
ZAF
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MARKETLINE | 119 FARRINGDON ROAD | LONDON, UNITED KINGDOM, EC1R 3DA T: +44 161 238 4040 | F: +44 870 134 4371 | E: [email protected] | W: www.marketline.com
- Company Overview
- Key Facts
- Business Description
- History
- Key Employees
- Key Employee Biographies
- Major Products and Services
- Revenue Analysis
- SWOT Analysis
- Top Competitors
- Company View
- Locations and Subsidiaries
proposal/MKT proposal.docx
The resources provided here meant to be used effectively to complete your:
1. Individual New Offering Proposal
2. Team Marketing Plan and Presentation
These resources include:
· Company Report | BlackBerry Limited (formerly Research In Motion Limited)
· Case Study | BlackBerry Limited: Does it have a future in the consumer market?
· BlackBerry YouTube Page | http://www.youtube.com/user/BlackBerry
· BlackBerry buys minority stake in healthcare IT firm (15APRIL2014 via Reuters) | http://www.reuters.com/article/2014/04/15/us-nanthealth-blackberry-idUSBREA3E0SE20140415
· BlackBerry's turnaround strategy | http://money.cnn.com/video/technology/2014/02/26/t-blackberry-ceo-chen-mwc.cnnmoney/
· BlackBerry's Chen: We Don't Plan to Unload Handset Business | http://www.foxbusiness.com/industries/2014/04/10/blackberry-chen-plan-to-make-money-on-handsets/
· Mintel Report | Mobile Phones - US - February 2014 (Mintel offers market research reports covering US and International marketplaces. Each report combines data & analysis of the competitive landscape, market-share analysis and consumer profiles. You must create a Personal Profile before first using Mintel Reports. You must use your SNHU e-mail address in creating your Personal Profile.
· SRDS Media Solutions (Contains SRDS' Local Audience Analyst which provides demographic and psychographic information for large urban areas and all 50 U.S. states at the county level).
proposal/MKT113 01150 Marketing Plan Instructions SP2014.docx
MARKETING PLAN PROJECT Introduction to Marketing
Spring 2014
Marketing Plan | Individual New Offering Proposal
See Blackboard Module 8 for Deadline Information
Marketing Plan | Written Marketing Plan and Presentation
See Blackboard Module 8 for Deadline Information
Overview
Each student will develop an individual new offering (Review Chapter 6 – Creating Offerings) proposal for an assigned company. Students assigned to the same team will collaborate to develop a simple marketing plan for one new offering proposed (i.e. All students will share new offering proposals they have developed and select one to move forward with for the final). This simple marketing plan will be delivered in a detailed written plan and presentation that that highlights the plan’s key elements. A final grade for this project will be based on individual and group performance.
Learning Outcomes
1. Develop an individual proposal for a new offering for an assigned company based on a thorough situation analysis using quality secondary sources.
2. Present and support elements of an effective marketing plan for a new offering launch in an assigned test market as a team.
Grading Overview | 150 Points Possible
· Individual New Offering Proposal | 50 Points Possible
· Completed Individual Team Rating Form | 15 Points Possible
· Completed Group Marketing Plan (Hard Copies, Presentation, and Submission to BB) 85 Points Possible
Marketing Plan | Individual New Offering Proposal
Each member of the class has been assigned a company to research for this project. Each student will develop an “Individual New Offering Proposal” for the assigned company. Each student must submit a hard copy of their proposal on the deadline and provide hard copies for each team member. This enables all students analyzing the same company to effectively evaluate each proposal. Review each of the following steps before submitting your completed Individual New Offering Proposal for grading and review by your teammates.
1. RESEARCH. Analyze the Company Profile, Case Study, Company News, and Competitor Websites to identify opportunities for new offerings that can be developed by your company. Focus your analysis on these areas:
a. Mission Statement (Company Website)
b. Company Overview (Company Profile – Posted to Blackboard)
c. Major Products and Services (Company Profile – Posted to Blackboard and Current News)
d. SWOT Analysis (Company Profile – Posted to Blackboard and Current News)
e. Top Competitors (Company Profile – Posted to Blackboard)
f. Resources for this activity include MarketLine Advantage and Competitor Websites that you identify via the company report you have been provided.
2. REQUIRED CONTENT. The Individual New Offering Proposal submitted by each student should include/address each of the following items and follow these formatting guidelines.
a. Full Name, Company Name, Assignment Title, Course Information and Date (SINGLE SPACED)
b. BOLD and ALL CAP EACH HEADING
c. Single-space all content under each heading and leave a space between each section.
d. Company Mission Statement (State the company mission statement with APA citation)
a. Target Audience Profile (What are the demographics and psychographics of the target audience for your proposed new offering? Mintel Reports and SRDS Media Solutions will be very helpful in developing a clear target audience profile. Support your reasoning with secondary research from these sources and others as needed).
b. New Offering Description (What is the good/service and why is it needed? Support this unique selling proposition using secondary research to support the new offering description)
c. New Offering Features (What are the characteristics of this offering and how does it work? Support these proposed features using examples from secondary research)
d. Offering Benefits (What are the benefits for the segment of audience you are targeting? What value will your proposed new offering deliver to your target audience and how does this differentiate your proposed offering from key competitors?)
e. Price (What is the price and price strategy you recommend for this offering and how did you arrive at this recommendation? Support your decision with clear current examples from your secondary research.)
f. References Include a reference section in APA style. An exceptional list of “Works Cited” will include the assigned Company Profile, Company Website, Top Competitor Websites, and current news that relates to Major Products and Services that should be used to develop the proposal.
Marketing Plan | Team Written Marketing Plan and Presentation
Students will collaborate and share their Individual New Offering Proposals . One proposal will be selected (or elements from multiple proposals can be combined) and all students will work to develop both a written marketing plan and presentation for the selected proposal. When discussing options, remember that the guiding question for the entire Marketing Plan is: Why should I invest in this plan? You want to select the concept that is based on the best research and can convince investors to back your plan. Your final Marketing Plan should include the following sections as headings. The length of each section in written marketing plan should be used as suggestions to guide your writing as a team.
I EXECUTIVE SUMMARY (see p. 342-343) – .5 pages recommended with appropriate citations
Section Outcome: Convince the reader clearly and concisely that you have addressed market considerations, product/service offered, and strategy behind the plan. This should be the final element of the marketing plan to complete. At a minimum, this section should clearly and concisely include the following items.
· Brief description of the market
· Product to be offered
· Strategy behind the plan
II THE BUSINESS CHALLENGE (see p. 343) – 1 page recommended
Section Outcome: Convince the reader that the offering is a good fit for the company and can help achieve business goals.
· Define the type of offering and describe in detail the offering features and why there is an opportunity/demand for this product.
· How does the offering support the company’s mission? Include the company mission statement first and then follow it with your discussion for this section.
· How does the offering fit in with what the company is already doing and further its business goals?
· Support this section with quality secondary resources (in-text citations and complete citations in the Reference section)
III THE MARKET (see p. 343-346) – 1.5 pages recommended
Section Outcome: After reading this section, a reader should have a good understanding of the situation analysis of the market, a strong understanding of why the new offering proposal is demanded by the market, and have a clear target customer profile(s) for the new offering.
· Compare and contrast the SWOT Analysis elements of your company and Top Competitors. Focus this discussion on those items that focus on your new offering proposal. Do not write on all elements of the SWOT.
· What is the target customer profile (demographics, psychographics, etc.) for your new offering?
· Are these current customers, new customers, or customers of a competitor?
· Why will the target customer purchase your new offering (product/service)?
· Discuss the competition and the uncontrollable environmental factors so that you convince the reader that your product/service is superior to the competition.
· Are there other organizations you are partnering with to deliver your new offering (product/service)?
· Support this section with quality secondary resources (in-text citations and complete citations in the Reference section)
IV THE NEW OFFERING LAUNCH STRATEGY (see p. 346-347) 2-4 pages recommended
Section Outcome: Convince the reader your marketing strategy is a well thought-out research based plan for effectively launching the new offering in a selected test market.
· You will develop a strategy for the Boston Metropolitan Market
· What channels in the test market will be used to sell the new offering? Why? (i.e. brick and mortar retailers, online? Be specific for the Boston test market.
· What is your pricing strategy for the launch of the new offering? Why
· When during the year will you launch the new offering? Why
· What promotion mix tools will you use to support the product launch in the test market? Be specific by stating the type of media and vehicle in the media (i.e. social media – Twitter). Develop a promotion mix plan for a 3-month window (12 weeks) of time to support your new offering launch. Use SRDS Media Solutions, Boston Event Calendars, and Boston Media websites to develop your detailed promotion mix plan.
· Support this section with quality secondary resources (in-text citations and complete citations in the Reference section)
EXAMPLE PROMOTION MIX CALENDAR (3 months = 12 week strategy)
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Month (3) / Week (12) – Campaign Promotional Mix Schedule
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Month “Name” |
Month “Name” |
Month “Name” |
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Promotional Mix Item Description (Include Media and Vehicle(s) |
WK1 |
WK2 |
WK3 |
WK4 |
WK1 |
WK2 |
WK3 |
WK4 |
WK1 |
WK2 |
WK3 |
WK4 |
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Magazine – ESPN; Sports Illustrated |
X |
X |
X |
X |
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Cable Television – ESPN; FOX Sports |
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X |
X |
X |
X |
X |
X |
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About the Promotional Mix Schedule Overview:
· The promotional mix schedule is a tool to help marketing managers visualize a variety of independent and co-related promotional activities planned to ensure that marketing and marketing communication objectives are achieved.
· When you view the schedule you should be able to identify the marketing strategy behind the promotional mix decisions (i.e. it should be obvious what the marketing communication objectives are by the promotional mix item selection and the timing of the selection).
· A promotional mix schedule should be prefaced by a detailed outline/discussion/justification/evaluation methods of the entire promotional mix (i.e. before presenting the Promotional Mix Table, outline your promotional mix plan in detail regarding what objective will the activity help you accomplish and how you will evaluate the results.)
· Utilize offsetting colors so it is easy to match the promotional mix item with the schedule (duplicate colors may be used but not in consecutive rows).
· Identify the media and vehicle(s) being used in each of your selections (i.e. Local Radio / 103.7 FM, 93.3. FM, etc.).
· Use as many rows as needed and DELETE all unused rows in your promotional mix table.
MECHANICS OF THE WRITTEN MARKETING PLAN
Deliverable Outcome: Convince investors they should invest more time considering the offering and money to fund the concept.
· Title page should include full names of students, new offering title, course information, title, and date.
· See Figure 16.9 Tips for Writing and Effective Marketing Plan on p. 349 of your textbook.
· BOLD ALL CAP HEADINGS and single space content below each heading. Leave a space between each paragraph/section of the report.
· When addressing any of the items in the directions, responses can include narrative and bullet pointed content as long as all content is clear and supported with appropriate citations and reasoning.
· The Written Marketing Plan will be evaluated based on Organization, Content, Writing Conventions, and Purpose.
· Separate title page, reference pages, and completed promotion mix calendar (a 3-month window - 12 weeks of time - to support your new offering launch) will not count as pages of content.
· Include a reference section in APA style. An exceptional list of references will include the assigned Company Profile, Company Website, Top Competitor Websites, and current news that relates to Major Products and Services that should be used to develop the proposal.
MECHANICS OF THE TEAM PRESENTATION
DELIVERABLE OUTCOME: Convince investors they should invest more time considering the offering and money to fund the concept.
· This is a summary of the highlights of your written Marketing Plan.
· 15-minute maximum persuasive presentation.
· 6 x 6 rule strictly enforced (Presenters must present and sell plan vs. read the plan to audience).
· Strong Introduction Slide
· 6-8 Content Slides
· Strong Conclusion Slide (Reinforce why this proposal is worth pursuing).
· Consistent font, graphics, theme throughout
· All team members do not have to present but all team members should be equally prepared to answer questions about the
SUGGESTED RESOURCES TO SUPPORT NEW OFFERING MARKETING PROPOSAL AND PLAN
· Company Report | BlackBerry Limited (formerly Research In Motion Limited)
· Case Study | BlackBerry Limited: Does it have a future in the consumer market?
· BlackBerry YouTube Page | http://www.youtube.com/user/BlackBerry
· BlackBerry buys minority stake in healthcare IT firm (15APRIL2014 via Reuters) | http://www.reuters.com/article/2014/04/15/us-nanthealth-blackberry-idUSBREA3E0SE20140415
· BlackBerry's turnaround strategy | http://money.cnn.com/video/technology/2014/02/26/t-blackberry-ceo-chen-mwc.cnnmoney/
· BlackBerry's Chen: We Don't Plan to Unload Handset Business | http://www.foxbusiness.com/industries/2014/04/10/blackberry-chen-plan-to-make-money-on-handsets/
· Mintel Report | Mobile Phones - US - February 2014 (Mintel offers market research reports covering US and International marketplaces. Each report combines data & analysis of the competitive landscape, market-share analysis and consumer profiles. You must create a Personal Profile before first using Mintel Reports. You must use your SNHU e-mail address in creating your Personal Profile.
· SRDS Media Solutions (Contains SRDS' Local Audience Analyst which provides demographic and psychographic information for large urban areas and all 50 U.S. states at the county level).
· Company and Key Competitors Websites
· Current news found via news aggregators and other sources.
· Citing Your Sources Research Guide http://libguides.snhu.edu/content.php?pid=228237&sid=1909323
WHAT TO SUBMIT ON THE DAY OF THE FINAL EXAM
· Hard copies of both the Marketing Plan and Presentation (3-per slide) must be stapled and submitted at the beginning of the Final Exam Period. Both files must be submitted by the team leader to Blackboard before the Final Exam. Failure to do either of these actions will result in a one-grade deduction for the entire team.
· Hard copies of your Team Member Ratings form. Complete one for each team member and submit them to Professor Lynch stapled together with a blank sheet on top.
MARKETING PLAN RUBRIC
INTRODUCTION TO MARKETING
MKT-113 – FALL 2012
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CONTENT |
ORGANIZATION |
COHESIVENESS |
CONVENTIONS/OVERALL APPEARANCE |
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90 - 100 |
90 - 100 |
90 -100 |
90 - 100 |
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PROVIDED COMPLETE UNDERSTANDING OF MARKETING TERMINOLOGY
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PROJECT DEMONSTRATES STRONG CREATIVE TALENTS RESULTING IN ABILITY TO SOLVE BUSINESS PROBLEMS |
INCLUDES ALL COMPONENTS OF A COHESIVE MARKETING PLAN AND FOLLOWS PRESCRIBED FORMAT
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USES CORRECT GRAMMAR, SPELLING, PUNCTUATION AND OVERALL APPEARANCE IS OUTSTANDING (0 – 2 ERRORS) |
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80 - 89 |
80 - 89 |
80 - 89 |
80 - 89 |
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PROVIDED SOME UNDERSTANDING OF MARKETING TERMINOLOGY |
PROJECT DEMONSTRATES ADEQUATE CREATIVE TALENTS RESULTING IN ABILITY TO SOLVE BUSINESS PROBLEMS
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INCLUDES MOST COMPONENTS OF A COHESIVE MARKETING PLAN AND FOLLOWS PRESCRIBED FORMAT |
INCLUDES SOME GRAMMATICAL, SPELLING, PUNCTUATION ERRORS AND OVERALL APPEARANCE IS ADEQUATE (3 – 4 ERRORS)
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70 - 79 |
70 - 79 |
70 - 79 |
70 - 75 |
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PROVIDED INSUFFICIENT UNDERSTANDING OF MARKETING TERMINOLOGY |
PROJECT DEMONSTRATES INADEQUATE CREATIVE TALENTS RESULTING IN ABILITY TO SOLVE BUSINESS PROBLEMS |
INCLUDES MOST COMPONENTS OF A COHESIVE MARKETING PLAN BUT DOES NOT FOLLOW PRESCRIBED FORMAT
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INCLUDES MANY GRAMMATICAL, SPELLING, PUNCTUATION ERRORS AND OVERALL APPEARANCE IS INADEQUATE (5 – 6 ERRORS) |
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0 - 69 |
0 - 69 |
0 - 69 |
0 - 69 |
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PROVIDED LITTLE OR NO UNDERSTANDING OF MARKETING TERMINOLOGY |
PROJECT DEMONSTRATES LITTLE OR NO CREATIVE TALENS RESULTING INABILITY TO SOLVE BUSINESS PROBLEMS |
DOES NOT INCLUDE KEY COMPONENTS OF A COHESIVE MARKTING PLAN AND DOES NOT FOLLOW PRESCRIBED FORMAT |
GRAMMAR, SPELLING PUNCTUATION AND APPEARANCE IS GROSSLY INADEQUATE (7+ ERRORS) |
Marketing Plan Pitch Presentation | Team Evaluation
Circle one (1) answer for each based on your perception of the presentation.
I am evaluating presentations for: MKT113 ____________________________________
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Introduction was clear and started the presentation with enthusiasm: |
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Strongly Disagree |
Strongly Agree |
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Product was defined clearly (i.e. you understand the purpose of the good/service): |
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Strongly Disagree |
Strongly Agree |
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Value Proposition differentiated product from competition/alternatives: |
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Strongly Disagree |
Strongly Agree |
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Target audience was clearly defined using appropriate marketing terminology: |
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Strongly Disagree |
Strongly Agree |
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Test market selected was explained clearly and defended well with reason/secondary research: |
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Strongly Disagree |
Strongly Agree |
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Promotion mix to support new product launch clearly connected to target audience: |
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Strongly Disagree |
Strongly Agree |
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Overall, the presentation was persuasive: |
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Strongly Disagree |
Strongly Agree |
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Total Points Out of 70 ________
You have $1,000,000 to invest in this proposal. What amount would you commit to developing this product based on the presentation today? |
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$0-99K |
$100-199K |
$200-299K |
$300-399K |
$400-499K |
$500-599K |
$600-699K |
$700-799K |
$800-899K |
$900-1 million |
MKT 113 Marketing Plan AssignmentTeam Member Ratings Form
Your Name _____________________________ Course Information (Prefix/Section) ________________
Instructions: Rate each of your team members excluding yourself on each of the items listed below being as objectively as possible. First, write the names of each of your team members in the boxes provided below. Then for each question, write the number that is most applicable to each of the members, using the scale indicated immediately below. Submit your ratings form directly to Professor Lynch. |
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Rating Scale (Write in one (1) number to rate each team member on each assessment criteria below) |
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Average |
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Excellent |
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Team Members Names (Fill in Vertically) |
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Assessment Criteria (Circle One Number for Each) |
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Level of commitment to the team
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Willingness to meet with team members for scheduled meetings |
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Contribution to the team in terms of the generation of ideas. |
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Willingness to consider ideas other than one’s own
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Completion of assigned task (s) in a timely manner
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Level of preparation for team meetings
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Overall contribution to the Marketing Activity
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F |
D |
D+ |
C- |
C |
C+ |
B- |
B |
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A- |
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Please grade each of your team members using one of the letter grades listed.
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Using the reverse side of this form, please provide any performance based comments that would assist in understanding and evaluating the overall performance of the team and its individual members. |
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