Welcome to the the Ivey HBA Retail Marketing Management blog. Retail marketing is an exciting, dynamic, important, and very visible aspect of the overall field of marketing. Throughout the year, students will be posting comments regarding contemporary retailing issues. Although this is intended to be used by Bus 4411 students, industry marketing professionals are also invited to join in if they like.
Tuesday, March 24, 2009
Blackberry App World - A Wise Venture?
It is clear that RIM’s online store has been designed to compete more directly against Apple’s iPhone and Applications store – enabling RIM to offer similar applications, service, and experiences that current iPhone customers have come to value. This aim is a complete departure from RIMs historical operating strategy and success as RIM is attempting to compete in a new arena of mobile phone application products. RIMs BlackBerry products succeeded due to its RVP of unparalleled product experience that appealed to professionals; now it is trying to replicate the service and application structure of its main competitor to mimic their RVP and enhance the overall BlackBerry product experience. However, one must question whether the implementation of BlackBerry App World is strategically sound and whether RIM should compete against Apple in mobile applications.
On the surface it appears as if iPhone and BlackBerry customers are distinct and belong to different target markets with specific customer needs and wants. The historic stereotype of RIM has been that it is a corporate and professional phone, a device that IT departments of large corporations distribute to its staff due to its superior functionality. As such, typical users are seen as being older and belonging to more professional industries. Conversely, the iPhone is seen as a creative product, designed for younger and ‘hip’ users, and those belonging to more creative industries such as artistic professions. Furthermore, these consumers are technology savvy and intend on using their products in creative ways to maximize technological capabilities and product enjoyment. Consequently, mobile applications are a suitable product for iPhone customers as they are knowledgeable about the technology and benefits of application products, and that applications currently available are predominantly games and entertainment related which are well-suited for their younger and more creative clientele. Considering that the bulk of existing applications are games and novel applications, and considering the existing clientele of RIM, it does not seem likely that the current customer base will value existing application products.
RIM has attempted to attract new customer segments by appealing to their usage needs through the creation of new mobile products. For instance, RIMs relatively new touch screen phone, the BlackBerry Storm, was strategically created to appeal to the same customer segment that Apple’s iPhone targets. In expanding their series of mobile products, RIM has been able to attract new customer segments that definitely value BlackBerry App World. In growing these consumer segments, maybe it is necessary that RIM offer applications in order to entice business. Nevertheless, just as expanding the fleet of BlackBerry phones has made the product more appealing to certain segments, it has also made for substantial technological and functional differences between the different models of phones. As a result, Blackberry App World will only stock software designed for Blackberries with a 4.2 operating system and a trackball, alienating all other customers who may find these same applications appealing. Vendors will face enormous challenges as they develop software that is supported by all devices. This is a relative advantage of Apple as their vendors only need to worry about one operating system and hardware specifications. Beyond internal technological inconsistencies and their subsequent problems is the issue of smart phones graphical user interface (GUI) and the ease of use of software applications. Apple’s iPhone has a superior GUI that enables top-of-line picture quality and software capabilities relative to RIMs BlackBerry products. Will applications appeal to users, as well as vendors, that have inferior picture quality? Have the existing applications being sold faired so favorably due to the iPhone’s advanced operating system?
Another important issue to consider is vendor support. In order for BlackBerry App World to be successful, it needs to be supported by an extensive database of application products and committed vendors. These vendors are strained by the different RIM products that their applications must cater to in order to be operable. There could be further complications whether a vendor who produces applications for Apple could also do the same for RIM, or even if they could use the same application products. Vendor issues must be solved in order for Blackberry App World to be successful.
In my opinion, it will not be an easy transition for RIM in their creation of the Blackberry App World Store; however, although it may not be easy it may be necessary to safeguard RIMs future competitiveness in the mobile application industry. RIM must gain the capabilities in application distribution today so they can incorporate and be well-situated for success in the future. RIM cannot lose the opportunity to be innovative and appeal to creative users as their current competitive advantage with their current customer base, being a highly functional smart phone with QWERTY keyboard, is not sustainable as other phone companies have replicated these qualities. Without doubt there is an inconsistency between existing application products and RIMs current customer base. RIM will continue to benefit as they gain more users who are ‘creative’ and desire games and entertainment applications, but RIM must also secure new professional applications that are practical and can assist in the workplace. In order to do this, RIM must solidify strong relationships with high quality vendors in order to encourage them to develop professional applications. Furthermore, issues regarding compatibility and operating platforms must be solved if the Blackberry App World is to be a true success. This can either be done by making software applications compatible in multiple formats or standardizing hardware and operating systems moving forward.