Brand Battle; iPhone Iconic vs. Blackberry Business Booster vs. Nokia Numbers.

It is war out there; three smartphone brands are taking the world by storm. Nokia has the largest army and has a defensive strategy. BlackBerry is conquering the business world and Apple’s iPhone is raising its army of affluent trendsetters. Soon to be followed by a mass army of ‘can I get that music device with the white ear plugs’ (the iPod illiterates of the second hour). The three generals have different strategies and lines of communications. Let the games begin…………..

First; the armies in numbers.
Mobile phones could go on to be the most common consumer electronics devices on the planet. Gartner estimates there will be 2.6 billion mobile phones in use by the end of 2009. And more than 200 million smartphones will be sold in 2008. In mature markets like Europe and North America, subscribers are still buying replacement phones. In emerging markets like Brazil and India, new customers are signing up for mobile services at an even faster rate. China and India alone will account for nearly 200 million units in 2007, with the Indian market surpassing China in 2009 to reach 139 million units. The world’s two largest vendors, Nokia and Samsung grew twice as fast as the market, research firms IDC and Strategy Analytics said. Struggling Motorola, Swedish-Japanese Sony Ericsson and Apple, a newcomer to the industry, could not keep up with continuing fast growth on the market. Sales records typically don’t stand for too long without being overtaken by the next best thing, but somehow, Nokia’s el cheapo 1100 handset has reportedly racked up “over 200 million sales” since it launched in 2003. This low-end candy bar has put the 100 million iPods, 50 million RAZRs, 10 million Chocolates and 115 million PlayStation 2 consoles to shame in terms of sheer units moved.

In terms of CEO mud fight, especially on the smartphone battle.
There used to be 7 generals competing in the smartphone segment; Apple (since 2007), BlackBerry, HTC, Motorola, Nokia, Samsung and Sony Ericsson. Let’s find out what these Generals were telling their troops;

  • Nokia’s CEO Kallasvuo says; the Apple iPhone is a niche product. Kallasvuo is either incapable of applying the lessons of iPod to iPhone and understanding what’s coming his way or, much more likely, he understands perfectly and, since he has no answer, is saying just what many now-defunct MP3-makers said a few years ago. (2008)
  • Samsung CEO charged with fraud, won’t be arrested. Prosecutors in Korea have formally charged Kun-hee (who has admitted guilt), but say they won’t arrest him because it would cause “enormous disruption” in the company’s operations. Authorities said instead they plan to send him to a week-long, all-expenses-paid trip to a luxurious spa and hope that a deep tissue rub will rid him of his lawbreaking ways. (2008)
  • Apparently following the “high tide lifts all boats” mantra, BlackBerry-maker Research In Motion’s co-CEO Jim Balsillie views the iPhone as a device that is focusing such attention on enhanced-featured mobile devices that BlackBerry is catching a kind of marketing contact high. (2008)
  • iPhone has changed the face of the industry, according to Sony Ericsson’s CEO Hideki Komiyama (2008)
  • HTC CEO Chou sees ‘huge advantage’ over Apple iPhone, calls Apple’s phone design ‘quite weak’ (2007)
  • Nokia CEO Olli Pekka Kallasvuo said he is “paranoid” about Apple’s entry into the cell phone market (2007)
  • Motorola CEO Ed Zander had quite a different approach to Apple’s iPhone. In early September Zander said Motorola’s strategy was to be “boringly consistent.” (2007)
  • CEO Ed Zander feels Motorola is in a great position to tackle the forthcoming iPhone, noting that iPhone acceptance will stimulate the feature-rich mobile-device market (2007)
  • The co-CEO (Jim Balsillie) of Research In Motion Ltd.; said that he’s not losing sleep over Apple’s efforts to upend the wireless market in much the same way as its wildly popular iPod music devices changed the way people acquire and listen to music. On the iPhone; I haven’t seen one, he volunteered with a shrug of his shoulders and a bored expression. (2007)
  • Sony CEO on the Wii, iPhone, and how Sony almost beat the iPod. Sir Howard Stringer on iPhone; “Steve Jobs spotted a trend that we’ve seen. We are all building variations on the same theme.” Stringer on iPod; in 1997 we were working with IBM on electronic music distribution and could have put this out five years earlier than iPod. But we couldn’t get our people to understand software.

We recall similarities here in our memories of the Iraqi Information Minister Muhammed Saeed al-Sahaf, proclaiming there is Iraqi victory at the horizon. Some of his quotes:

‘There are no American infidels in Baghdad. Never!’
‘My feelings – as usual – we will slaughter them all’
‘I blame Al-Jazeera – they are marketing for the Americans!’
‘They’re coming to surrender or be burned in their tanks.’
‘Be assured. Baghdad is safe, protected’.

What kind of strategies for the smartphone armies?

All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.

The respective strategies of these companies are aimed to win the battle. Who is making an effort to win the war? Nokia had the advantage once of customer loyalty. The next phone would be a Nokia again, because of familiarity with the software or fit with the existing car kit. BlackBerry has addicts, who’s thumbs have evolved to their keyboards only. The next generation humans will have smaller thumbs to fit their keys. Apple is the new rooky at the battle field. It is cool to have an iPhone and especially in Asia, the mobile phone has become the fashion item. People put their phone on the table to show off their style; like a woman’s bag.

Research In Motion (BlackBerry) and Apple are fighting the mainly US battle right now. Apple is opening up its software to integrate it with corporate networks. And both are going at the consumer instead of only the business user. Apple needs to work on an external or integrated keyboard. The iPhone is the most frequent used for internet browsing, which on a BlackBerry is a pain. Furthermore Apple is introducing the 3G iPhone and yet AT&T is already planning steep discounts to lower the cost to $199, Fortune reports. AT&T would be taking a big step in making the 3G iPhone accessible to the mass market. AT&T will also give Apple a major leg up in its battle for smartphone supremacy over Research In Motion, although that market looks big enough for the both of them. In the mean time Nokia is considering a ‘Nokia branded iPhone’. Anssi Vanjoki — Nokia’s Executive VP & General Manager of Multimedia was questioned about the striking similarity of the Nokia concept phone to the iPhone and said, ‘If there is something good in the world then we copy with pride.’

Marketing communications in smartphone war.

The branding exercise is mainly supported by the brand owners. The resellers will take on the in-store promotions and market their mobile phone plans XYZ minutes per month for a fixed amount (including a particular phone). Apple’s iPhone was the first brand to demand a kickback on the contracts (supposedly; in the US Apple is getting somewhere in the neighbourhood of $150-$200 per new contract) and from other wireless network brands around the globe, in return for exclusive iPhone sales. All brands use the same communication tactics and Apple has the advantage of being desired by consumers (pull effect). The distinctive MarCom, features, phones and connection capabilities of the manufactures or the resellers are minimal. Hence they are battling on the same grounds with same weapons. Although there have been some strategic moves. In terms of phones; Apple’s iPhone, HTC’s S710, BlackBerry, Motorola’s RAZR….. In terms of software; Google’s Android Apple’s OS, Microsoft’s Windows Mobile (in and out of this market), Nokia’s Symbian…. In terms of features: touch screen, WIFI, GPS, camera’s, Flickr upload, maps, radio, email….

Will there be a winner of the mobile phone war, or will brands battle for ever?

Consumer loyalty has been low, mostly driven by a new gadget phone need or want or a better deal on a plan (minutes, flat fee etc.). Consumers have to figure it out themselves, SMEs are stuck in the middle and large corporations have their IT departments to support them. The first are price and product sensitive, SMEs go for productivity and personalisation and the larger corporations are price, compatibility (networks, servers, software) and security (BlackBerry for now) driven. Mobile phones are consumed in mass, meaning that most users switch every 12 months to a new device and sometimes a new mobile network as well. Retention marketing is at an all time high and all time high costs. Consumers have no connection with the mobile networks, they are brand switchers.

All of the above leads to trying to win consumers and clients over to use either their service or a branded phone. Winning small battles at enormous costs. To win the war you need an integrated offer, meaning; a great (sexy, functional, secure, convenient, simple, cool and or value adding) smartphone, easy software, unlimited mobile connection (everywhere, all the time at flat fees) and easy connectable with other equipment, such as: computers, car equipment, back-ups, home/company servers etc. And you will need to provide your clients with the latest model if required. Basically there is only one brand coming very close to these requirements; BlackBerry. It doesn’t have its own branded network or replacement service yet. Apple with iPhone and their computers is second best with their own proven software, great integration with iTunes and back-up, high security, design and very COOL!

The anticipated moves in order to win the smartphone war:

  • Apple or BlackBerry branded mobile networks
  • life time clients by providing plans with new phones and services when available (upgrades)
  • full and hassle free integration with all electronic devices
  • simplicity, functionality, design and security.

Thus, what is of supreme importance in war is to attack the enemy’s strategy.

Author: Christian ter Maat MCC, MMC, CMC; Director Carevolution; management and organisation consultants. We are strategy, organisation, management and communication consultants with a curiosity for nearly any industry and a passion for: media, entertainment, creative industries, hospitality, leisure, tourism, retail, wellness, care, charity, professional services, real-estate and automotive.


© Copyright 2008 Carevolution

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