Why has blackberry sales declined? (Research Paper Sample)

RESEARCH METHODSWHY HAS BLACKBERRY SALES DECLINED? by Siddhant MantriStudent no: S00403461 Name of University City, StateDate: 30th November 2012 Table of Contents Introduction …………………………………………………………………………………3.Objective ………………………………………………………………………………….. 3 Literature Review ……………………………………………………………………………3 Methodology …………………………………………………………………………………4.. Findings and Discussion of Findings ………………………………………………………5 Conclusion and Recommendations …………………………………………………………..7 References …………………………………………………………………………………….9. Appendices ………………………………………………………………………………….10.
Introduction In the recent years, Blackberry has hit the headlines with negatives of decline in sales. The worst of all was the recording of fourth quarter loss of about $125 million. The chief executive announced that the company is ready to sell or license a portion of its business. This trend is anticipated to continue. This poses a threat to the once leading mobile operator in the world. In five consecutive rows, the company failed to reach its quarterly financial guidance. Before the release of the fifth financial results, the co-chief executive and co-chairman announced that he had resigned from his position from the board. Unlike his predecessor in the position of chief executive who lived in the denial concerning the financial position of the company, Thorsten Heins (CEO of RIM) developed candid tone and expressed that the company was undergoing tough financial struggles.  ObjectiveThis paper shall explore the reasons behind the noticeable fall in Blackberry sales with an aim to expose the obvious pitfalls that the company faced. Literature Review Research in Motion (RIM), the manufacturer of Blackberry, has been the leading company in the smartphone industry. It launched the Blackberry smartphones, which has become the people’s favorite in the world. Within the first 10 years after inception, Blackberry has recorded immense success. It recorded the highest growth rate between 2008 and 2009 when the revenue growth increased from $6 billion to $11 billion. The availability of Blackberry products has been marketed throughout the world using channels of extension of distribution. Blackberry has had an increase in the number of users until last year when the numbers remained constant and started declining after a few months (See appendix 1) The recent headlines have seen Blackberry reporting a decline in the sales. This is mainly attributed to numerous competitors and the introduction of iPhones, which has distinct features. The revenue reduces by 43 percent in the first quarter of this year to $2.8 billion. One major reason for the decline is the competition faced from the Apple’s and Samsung products, which has touchscreen services. In response to the decline in the sales RIM is set to launch Blackberry 10 with touch screen services. RIM CEO announced that they would be laying off 5,000 employees for restructuring purposes Methodology This study is focused on examining the trend by Blackberry’s sales. The use of a detailed questionnaire was important in establishing what influences the customer’s decision to buy Blackberry phones. Ten questions were formulated to help identify the impact variables. The questions are shown in appendix 1. I also sought to establish the marketing strategies in Blackberry. This was done by observation of the distribution agents and centers. I collected the number of Blackberry phones that were sold in each outlet in one year. I also did a comparison of the important features of smartphones that are in other brands that attracts people to them. What features in Blackberry are qualified as a smartphone, comparing to other brands of smartphones? We sought to establish the effects of customer’s judgment of sales.Secondary Research was also an important part of my study. The first research approach for this paper is either inductive or deductive. I have explored on a lot of qualitative data, which is inductive research in nature. Blackberry has faced immense challenges and hurdles over the last few years and these needs to be noted down to analyze the decline and this why I have used inductive approach. I also used deductive research to get firsthand knowledge from the sample that was handed the questionnaire and understand what people think is good or bad about Blackberry. My second research is primarily done by the help of online websites and journals. The findings will be important for analyzing in the later stage. A problem I encountered during my research was with the consistency and reliability of the secondary data as in today’s date trends change on daily basis and it is hard to find the accurate data. As the matter of fact, the primary data was somewhat biased with certain people. Findings and Discussion of Findings From the questionnaire posted, Blackberry has users drawn from mixed demographic characteristics. Majority of the users falls between 18 years and 35 years. A number of them are young people who are fond of social networking sites such as Twitter and Facebook. The gender factor was not so much determinant factor as there was equal distribution of users of the same sex. Unlike his predecessor in the position of chief executive who lived in the denial concerning the financial position of the company, Thorsten Heins developed candid tone and expressed that the company was undergoing tough financial struggles. In the interview, he frankly confessed that there is no hope that things are likely to change in the near future. The respondent cited various features that determine their decision to buy a smartphone. Some argued that Blackberry smartphones have menu layouts and options that can easily confuse the user. The OS 6 in the smartphone enables the users to manipulate the phone via keyboard and track pad. The respondents, however, noted that they would prefer touch screens, which are easy to manipulate than using a keyboard. The respondents affirmed that when they think of smartphone, the first thing that comes into their mind is Blackberry. Nevertheless, a few noted that they also recognized other smartphones offered by Nokia and Apple. Many respondents agreed that the slogan employed by Blackberry is very appealing, but it influenced their decision to a smaller extent. They argued that other smartphones also allow users to connect people across the globe and so this was not just unique for Blackberry. The unique qualities of Blackberry include wireless and call quality, availability of entertainment, browser options, camera, and durable battery life. The Blackberry browser services are very fast with more features that were absent among other predecessor smartphones. With the OS 6, the users expressed that features such as tabbed browsing and pinch-to-zoom are very interesting. However, they also noted that the site would hang when browsing difficult sites. In terms of secondary research, it was important to find out the how much did the sales actually decline to. I found that Blackberry had good sales until the ends of 2010, however, a downfall was seen and ever since then sales have fallen significantly, as it is seen below in the diagram. This was primarily due to competition and Blackberry’s inability to compete in the market.
We can see in the figure below how Blackberry’s profits have dropped from its peak in 2011 till 2012. It is a significant drop of 7 percent in sales. It is evident that the trend will continue in the future. Blackberry is not able to adapt and change to consumer needs.
Conclusions and Recommendations RIM is in big trouble to capture the lost market in the smartphones. Even the yet to be launched Blackberry is likely not to shake the market to a greater extent. This means that Blackberry risk being phased out of the smartphone market. Consumers are likely to ignore the emergence of Blackberry given nothing new, but just similar to what is readily available in the market. Blackberry has suffered a setback, because it uses an outdated OS. In addition, their hardware is not appealing to many carriers. Moreover, their strongest opponents are also not hesitant to come up with better technologies. For instance, Apple is set to release a new iPhone with unique features that can be used for business people. In addition, Nokia is also warming up for a comeback in the smartphone market. This means that Blackberry will continues to shrink in the smartphone market, and this is evident its current financial performance. Faucette research shows that a number of carrier retails shops had not sold Blackberry phones in the course of this year. He further explains that Blackberry recorded no notable change in sales between the months of July and August 2012. This implies that the upcoming Blackberry is likely to be ignored since customers shall have gone a long stretch and would opt for better alternatives offered by competitors such as Nokia, Android, and Apple. I believe it is premature to rule out Blackberry from the smartphone market. However, they need to be more creative and innovative in order to strive it today’s market and compete ...