Rebound or Requiem? A SWOT Analysis of Research in Motion, Opportunities

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January 30, 2013 heralds the launch of Research in Motion’s (NASDAQ: BBRY) newest smartphone and operating system, the BB10.  Coming off the lackluster launch of BB7 a little more than a year ago, BB10 could represent Research in Motion’s (RIM) resurgence in the smartphone market.  It also could be its swan song.  Opinions vary regarding the future of both BB10 and its maker.  Most agree the device is a modern, well built smartphone, albeit a couple years late coming to market.  In a market dominated by Apple (NASDAQ: AAPL), Samsung and Google’s Android (NASDAQ: GOOG), what opportunities are there for a new smartphone and operating system?  In Part 4 of our series, “Rebound or Requiem? A SWOT Analysis of Research in Motion,” we’ll look at the opportunities RIM has to put itself back on the smartphone map.

Opportunity #1

80 million current users who may upgrade to BB10.  Depending on who you believe, up to 70% of these customers may upgrade to BB10.  Further, there are more non-smartphone users who may upgrade to a smartphone for the first time.  The BB10 reportedly includes more consumer friendly features and the option of either a touchscreen display or a keyboard, further broadening its appeal.  RIM particularly believes it enjoys significant customer loyalty outside of the United States.  Within the United States, well, let’s not go there.

Opportunity #2

BB10 has a security feature called “Balance” that allows a user to separate their personal information from their business information.  In effect, a BB10 is a work phone and personal phone rolled into one device.  As more employers and government agencies adopt a “bring your own device” policy, this ability to separate personal from business information on the same device could prove a key selling point for BB10.  For example, there are an estimated one million Blackberry users in the federal government who have the option of upgrading to BB10 or switching over to a different smartphone.  If they opt for the BB10, not only can they keep their apps from BB7, they also can enjoy this feature of split personal/business sides of the same device.

The enterprise market has been important for RIM and the company believes BB10 is a quantum leap beyond other smartphones on the market, particularly for enterprise customers.  The reliable, historically secure Blackberry, now with the ability to switch from business apps to personal apps without sharing data or other information between the two, may appeal to the “bring your own device” crowd.

Opportunity #3

Foreign sales have both increased and become increasingly important to RIM as US market share declines.  Company leaders claim Blackberry smartphones are competitive, if a not a “leading brand” in European, Asian and other foreign markets.  In fact, Blackberries command as much as 60% of the smartphone market in Africa, Indonesia and Mexico.  One Canadian analyst predicts the Canadian-based BB10 will dominate the Canadian smartphone market.  I’ll let you draw your own conclusions on that one.  

This dominance in the young and growing markets of non-Western economies may provide enough earnings for RIM to survive and, possibly later, challenge Apple and Samsung in the US market.  In fact, some have speculated the recent weakness in Apple stems from the imminent launch of a highly competitive BB10 product.  Strong foreign sales may give RIM the breathing room it needs to become the third dominant player in the US smartphone market.

Foolish Final Thoughts

Today’s RIM is fighting for the market it dominated not six years ago.  It also has a new management team experienced in leading a large international company.  Some have described the BB10 as the most advanced mobile operating system on the market.  RIM has a loyal following outside of the US and a smartphone/operating system that could carry significant appeal to the “bring your own device” customer. The BB10 rollout also gives cellphone carriers a third option to balance off the Apple/Samsung dominance. While these opportunities offer hope to the company, threats abound.  Read about those in part 5 of our series.

dylan588 has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple and Google. Motley Fool newsletter services recommend Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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