Research in Motion - Entering a New Era

Research in Motion - Entering a New Era

Introduction

The company's comprehensive offerings provide competitive advantage by creating entry barriers, as well as allowed it to record strong revenue growth. However, economic slowdown in advanced markets, could affect its operating performance in coming years. Strengths Weaknesses Comprehensive offerings Issues with product launch and supply Growing brand image Dependence on few customers Robust financials Opportunities Threats Expanding portfolio of offerings Economic slowdown Steady demand for smart phones Declining ASP Strengths Comprehensive offerings RIM has comprehensive offerings as part of its BlackBerry wireless information access solutions. The company offers BlackBerry branded smart phones, and related solution and services to enterprise and consumer markets.

Discussion

Economic slowdown could result in companies deferring purchases in response to tighter credit and negative financial news, while consumers decrease their spending owing to low spending power. Economic slowdown in major markets could affect the operating performance of the company in near term. Declining ASP The average selling price (ASP) of Smartphone devices are expected to decline in coming years (Castaldo 2010, p. 29). As Smartphone market is focusing on the consumer market and increasing competition resulting in technology maturity, the ASP is expected to decline. For instance, RIM's ASP of devices declined to $337 in the third quarter ended November 2008 of FY2009, compared to $ 342 in same period in FY2008. Decreasing ASP makes the company depend on sales volume and product mix to increase its revenues. Further, its success depends on the ability launch new products and related solutions on a timely basis. Declining ASP could affect the margins of the company in coming years (Heinrich 2011, p. 2).

The company's expanding portfolio of offerings on the BlackBerry solutions helps to increase demand for its solutions as customers find higher utility in them. Steady demand for smart phones exists despite the slowdown in overall mobile devices market; smart phones are forecast to record steady growth. For the third quarter September 2008, the worldwide Smartphone market grew by 11% compared to same period in 2007, while mobile phones grew by 6% compared to previous year. Subsequently, RIM reported about 70% growth in BlackBerry devices sales for the third quarter ended November 2008 of FY2009, compared same period in FY2008. By contrast, the mobile phones market declined by 5% in fourth quarter ended December 2008, compared to same period in 2007. The demand for smart ...