Research in Motion (RIM), makers of the BlackBerry, the smartphone category leader for most of the recent past seems in danger of going the way of Palm, who created the category, did. In recent weeks there has been a steady flow of negative news and commentary form the media, ranging form today’s piece on Bloomberg that said “more companies opting for rival devices such as Apple Inc.’s iPhone. Of 200 companies in the U.S. and U.K. surveyed, 74 percent now let their employees use devices other than BlackBerrys,” to news that various governments have raised questions about its security. On the surface it appears RIM is suffering from bad PR and government relations. My question is: Is this a marketing problem or a product problem?
It does appear that RIM has a significant PR challenge. Blackberry 6 has rolled out via a TV ad campaign but with little attention in the editorial side of the media. What attention it has got has tended to focus on this being “RIM’s last roll of the dice.” Of course RIM has also been berated for having a relatively weak product line up and for also having opted for a software application model that gave customers a few really good apps versus the thousands and thousands open to iPhone and Android users. It would thus appear to be a perfect storm. A weak product line up, a software strategy error and less than effective PR. In other words it’s not just a marketing problem.
Can marketing save RIM? I for one believe the BlackBerry brand could still do well. The iPhone, though beautiful, isn’t without its flaws: dropped calls, touch screen keyboard that can lead to horrendous typos, AT&T coverage in markets like San Francisco, the list goes on. The iPhone is also becoming a target for people who like to exploit security holes. I was recently told of a major investment bank that wanted to trial the iPhone for staff. To make it secure they had to disable the camera, iPod functionality and the ability to download apps. In other words it became a phone and email device. Given these are actually two of its weaker functions (see list of weaknesses above) that should make the BlackBerry a very good alternative. This is where marketing needs to step in and hammer the iPhone for all it’s worth. For people who like to email or text message the BlackBerry s still the best device going. But they need to do more than that. RIM needs to get aggressive and invest in a real content and applications model that people see as a real alternative to iTunes. This could easily be done via a comprehensive agreement with Amazon (who also has an interest in unseating Apple). Now of course we hear that RIM is readying an iPad rival. This makes it a rival to Amazon also given the Kindle. Bad, bad idea in my mind. I think there is far more to be gained by having Amazon on its side than having them as a rival. Amazon, after all, offers the only real alternative to Apple’s content strategy.
I could go on and on about how RIM needs to ‘re-win’ the smartphone battle and how this requires them to win over both consumers AND the IT community. It’s achievable with some well executed PR provided they also look at their content/application strategy AND roll out a product line that rethinks their current look. RIM is where the American carmakers were when the Japanese arrived. They were focused on the wrong things and just couldn’t see how tastes had changed. It’s going to be a tough battle for RIM but as of today they have the resources to win if they are willing to take some bold steps and admit some of their mistakes.
It seems that whenever Apple intros a new version of the iPhone or the iPad customers are prepared to camp out overnight just to be one of the first to own such a product. While I drove past the Palo Alto store yesterday and studied the line I couldn’t help but think that these lines were a marketing opportunity for someone. I could easily see an app vendor creating some stunt that gave the first 100 people in each line a free copy of their app, so that their app instantly became a hit just as the new platform comes out. I could see consumer brands such as Dr Scholls (the people who make foot care products) creating ‘Apple Line Waiting’ gift bags. I could see Starbucks offering a ‘mobile (get it?) latte service’ for the people stuck in line. Right now the only people benefiting from the lines is Apple. With lines formed in major cities across the world, surely there’s an opportunity for someone to capitalize? Come on all you creative consumer marketers, get your thinking caps on.
I spent some time in the Palo Alto Apple store yesterday. My eldest daughter was playing with a raft of different products from laptops, to ipods and iphones and of course all the various accessories. Standing in the midst of the store I became aware of just how many products Apple is now selling and the list seems destined to grow. Now imagine the store as a metaphor for what the average consumer can associate with and you can easily see that as the product range expands their ability to maintain strong associations with products diminishes. Pretty soon Apple is meant to launch some kind of tablet which will take up yet more shelf or table space.
As someone that loves the quality of the Apple products and admires the brand, I worry that this ‘growth’ mentality could be a dangerous path. Some companies are able to run large product lines because their products are designed to reach different audience segments and we understand that as consumers. But Apple’s brand has been built around the idea that we all want all of their products and they’ve actually done a pretty good job of selling that brand. I for example have an iPod, iPhone, iMac, Apple TV and a MacBook Pro. I’ve also got countless Apple accessories and chargers. At some point though the list has to stop. As a consumer I don’t want yet more products. I want fewer that span the gamut. Apple in its recent incarnation (Steve 2.0) has done an amazing job of only launching products that are really needed. Few products seem to have struggled – the Apple TV and the Mac Air seem the notable exceptions, while the iMac iPod, iPhone and iTouch have been huge successes. If Steve was 100% well I wouldn’t raise these concerns. But we all know that Steve is not devoted to Apple in the way he was before his illness and that at some point he’ll take a huge step back. When that happens I worry that Apple will miss his iron grip on the company’s product strategy and that inferior products will be launched and Apple will be right back where it was before Steve returned.
Next time you are in an Apple store, try and imagine that they’ve launched four major new products and still have all the current product range. You will quickly start to wonder how they can fit everything in without making the stores much bigger. FYI rumors are rife that Apple is going to take a much bigger space in Palo Alto and open a new flagship store (click link). Does this suggest their solution to the product proliferation problem is simply to take on more space? I sincerely hope not.
Apple launched its much anticipated update to iPhone today, called the 3GS. It has some good new features, such as a camera that actually takes decent pictures, video and sound activation. Price? $199 plus a two year contract with AT&T. That’s the good news. The bad news is if you’re an existing iPhone user and want to upgrade the price is… (wait for it) $599. In other words if you have been a good Apple/AT&T customer and want to buy the latest product you pay $400 more than someone who has waited until now. This seems crazy to me. They can clearly afford to sell the product at one price, so why charge existing users so much more? The argument is that if you haven’t yet run down your old contract then you haven’t yet given them the chance to recoup the discount they gave you on the phone you bought. But they ignored that fact when they launched the 3G. Therefore I can only assume that they don’t really want existing users to switch. This also means that the iPhone’s actually should retail at these crazy prices and the contracts are what bring the prices down. Even with this, surely an upgrade at some lower price could be justified by someone extending their existing AT&T contract by two years. My headline says Apple must not want the business. This is probably unfair. In truth it is AT&T that control this part of the pricing. I really hope some common sense prevails though and that Apple and AT&T get together and change this policy.