how samsung killed the blackberry star :the inside story

 

As smartphone market gathered crescendo with the launch of iPhone , RIM’s first signs of trouble started in US results.The iPhone's arrival in 2007 dented RIM’s market share but dint slowed its growth. But as Android gained traction,Blackberry showed signs of getting hit. For 7 straight quarters in a row,from late 2008 to 2010 summer RIM recorded revenues of around $2billion for each period followed by a dramatic slide quarter on quarter with sales dramatically falling to $1billion in the quarter ending August 2011. As Android siphoned off market share led by  droves of OEMs which lapped up Android to power their low cost handsets.

For RIM, this was the ultimate death knell. Meanwhile RIM’s share of Verizon’s smartphones sales dropped to a 14% from the last 3 months of 2010 from 60% a year earlier.The drop was also significant at Sprint, which saw blackberry shares fall from 63% to 22% and continuing the disaster ‘ T mobile share of RIM phones dropped from 60% to 18%. Never in the history of RIM it has confronted such a situation.

However another player which changed the dynamics of the smartphone market was Samsung. Samsung was the largest electronics component supplier in the world , which supplied Rivals, RIM and iphone componens for their phones. Due to Samsungs size and scale it could easily outspend, Nokia, RIM and Motorola in terms of Its huge marketing budgets

If Samsung lost a smartphone sale, it made its money by supplying the components to the winner.As a critical supplier, Samsung had access to the latest new technology ,priority on supply and the chance to have a first peek inside its competitor’s hardware. In the book, Loosing the signal, RIM's joint CEO, Jim Balsillie talks about the Samsung marketing budgets  ” In 2010 when I saw the huge splash made by Samsung, and got to know about its huge marketing budget, it have me the chills, and I knew that out crown jewel, Blackberry was now loosing its way to becoming a crackberry.