Cell Phone Industry

INTRODUCTION

The purpose of this study is to explain the innovation and evaluate the innovations’ benefits in a particular industry. The subject of my assignment is the company of Research In Motion (RIM) and RIM’s product which is called Blackberry in cell phones industry. All industries need to creative new products or improve their products to satisfy the costumers. By this reason innovation is very important issue in today’s competitive business world.

The RIM produce innovate the e-mail wireless system and in this point Blackberries are one of the best smart phones in cell phones sector. This assignment also makes some estimates about Blackberry and its position in the cell phones sector.

THE HİSTORY OF CELL PHONES INDUSTRY

In the past centuries, nowadays’ communication technology was only a dream. Cell phones, internet chat, e-mail were very extreme machines or system for the people. However depend on the improving of communication technology all these dreams has been becoming real. (M. Woods – 2005).

During the 1940’s, the radio technology was developed and this was constituted the first step of cell phones’ history. The beginning of cell phones was based on the innovation of radio communication which was used especially in taxi caps, police cars and other means of transportations to provide two ways communicate one to another or communicate only the central base. And also individual radios help to improving cell phone communication technology with patching into a phone line via live operator to make a phone call. Swedish police used the first official mobile phone in 1946. There was a link between telephone network and the new technology and the new system was very different from two way radio system. But it was not sufficient enough, only 6 phone calls were done before the battery was finished.

The modern cell phones technology was created by the same time with creation of hexagonal cells in 1947. Moreover the development of cell phone technologies naturally has been following the improving of technologies and first electronics cell phone developed during the 1960’s. The problem of these cell phones is; the user had to stay one cell area because cell areas which were serviced by a base station were unable to hand off cellular phone calls from one base station to another. While you could make a phone call, you weren’t able to continue the call after you reached a set range. This problem was solved by A. E. Joel in 1970, call handoff system was built up and this system provides the user carrying on the phone call from one place to another without switching off the phone. Following decades the cell phones technologies continue the improving. The cell phones can be classified with three groups; first, second and third generations.

First Generation Cell Phones: In 1983, the first portable cell phone was presented to world by Motorola and the name of this product was Motorola DynaTAC 8000X. The cost of research to improve the cell phone was over 100 million dollars and it took about 15 years to prepare it for market. It looked like brick and it weighed about 28 ounces. Until the beginning of the 1990’s the popularity of cell phones increase due to innovations in cellular networks. However, most common style of using was in car like a car phone because of its dimension.

Second Generation Cell Phones: During the 1990’s, due to new system such as GSM,IS-136 and IS-95 cell phones skipped the second generation (2G). The new digital mobile phones started to use in the United State in 1990 and in Europe by 1991. 2G mobile phones enabled to get network signal faster, the quality of calls was better and the amount of dropped calls decrease by the digital system. The size of 2G phones absolutely smaller than the “brick” phones which were produced former decade. 2G phones were usually in the range of 100 to 200 grams; in addition, most of them did not need large batteries. With these innovations also provided remarkable increase the amount of cell phone user.

Third Generation Cell Phones: The most common name of third generation is 3G and these phones available today. Only few years after 2G, 3G phones were improved. Due to many innovations in technology and services, standards for 3G are usually different depending on the network. Today’s cell phones are not only using for handle text messages and such contacts book. The new cell phones include GPS, Wi-Fi connectivity and motion sensors. These phones are able to get the e-mails, connect the computers and provide the videophone. According to Andy Jones, head of information security research at British Telecommunications, “Mobile phones are becoming a bigger part of our lives”.

“RESEARCH IN MOTION” AND BLACKBERRY

The History of Research in Motion: In 1984, a pair of engineering students, one each from the Universities of Waterloo and of Windsor found the Research in Motion. The technology of RIM created the most common Blackberry mobile communication tool. RIM was the first wireless data technology developer in North America and created several wireless products, including wireless Point-of-Sale devices, radio modems, and the first two-way messaging pager. In 1998, the small portable wireless handheld was produced by RIM and the name of the machine was RIM 950. RIM 950 handled e-mails contacts and calendaring with a fitted QWERTY keyboard. The first Blackberry two-way was produced in 1999 but the opportunity of pushing e-mail and SMS was allowed on the world in 2002 with 5810. Businesses soon saw the power of the QWERTY keypad handsets as an office tool, and haven’t looked back since, with the first colour models in 2003 and first packing Wi-Fi in 2004.

Today, the Blackberry phone is one of the leading cell phones in the market and the popularity of the Blackberry has been increasing day by day. The user of Blackberry phones take significantly advantages, especially business who needs an advanced phone to communicate with their office when staying outside. The blackberry earned the many professionals’ confidence by the way of answering their needs. Also business world not only one market which Blackberry sold, many people interest in using smart phones to connect internet or GPS, take and share photos with the phone.

INNOVATION

According to management expert Peter Drucker, innovation is change that creates a new dimension of performance. One of the most important things is creativity for innovation. The foundation of innovation is new ideas and new criteria and also personal success. The source of creativity is statement of new ideas and new solutions. In addition, innovation get agreement from the others to be successful and the idea of innovation influence the other people ideas’. All industries need innovation every time to improve their influence areas and to reach their target. Customers always have some future expectations and organizations want to answer these demands with new innovations. To make a successful innovation, recognize and estimate the new opportunities is playing significant role. Creativity involves transformation such as dramatic change in form, structure, process, appearance or character of a person, a product, or an environment. In other words, creativity involves the making change from present situation to future for greater returns. Form creativity new life begins in business world. (Marci Segal – 2003).

The results of innovation are hard to measure. It is so complicated to understand. There are many sorts of dimension that include a diversity of activities. The main point of innovation is about product, it should be new. Moreover it may also be a new process of production, alternatives of a cheaper material, include improvement for this issue and uncovered product, open for the improvement and have a easy way to developed more innovations. The transformation process to provide technological and economic consideration from innovation is also complex. (R. Landau, N. Rosenberg – 1986).

INNOVATION OF BLACKBERRY

The innovation of Blackberry maybe creates a question about is it radical innovation or a step-change innovation. Although the e-mails are sent by computer, it is significant to note that blackberry provide an opportunity to send and receive e-mails while moving or out of office. Also the size of blackberry is very small it is exactly a smart phone and obtains important advantages to users. As a result, blackberry is a radical innovation for those corporate executives, government officials and emergency driven professionals for whom doing business has changed.

Jim Balsillie, Co-CEO state an opinion about importance of time. If the blackberry had represented earlier, it may not have been very popular because e-mails did not use very common. “It was the right time for us to do that because the offering and the market opportunity and the value proposition and uniqueness stood on its own merit. We did it at the time and we certainly have no regrets. It appears, in hindsight, to have been a very wise strategy,” he says.

The benefits of blackberry against laptop and the mobile phone are a little bit complicated. The position of Blackberry lie between laptop and mobile phone in other words the value of Blackberry is in the middle of these two devices. However the security of data being directly erasable if the Blackberry is lost and the management of sophisticated images are more than for the laptop and mobile phone. Moreover, time is very important in today’s competitive business world. Blackberry considers using time more efficiently with providing business to check e-mails and complete their transaction out of the office without computer. (Swastik Nigam – 2007).

It is certain that Blackberry is one of the most powerful devices which bring the wireless technology to daily life use. The person who is carrying this extreme machine will never become out of contact. The Research In Motion (RIM), the producer of Blackberry, after the first device which called Interactive Pagers hit the market in the summer of 1998 has been becoming of a phenomena in market.

THE REPORT OF RIM AND FUTURE EXPECTATİONS

As I mentioned before the first RIM product hit the market at 1998. After that producing Blackberries models was followed this improvement. In a short time, Blackberry have came a popular and also RIM sales have increased sharply. The RIM started to sell the Blackberry firstly in USA and after a time period the Blackberry spread all over the world.

2009 Market

2008 Market

Company

Shares

Sales (%)

Shares

Sales (%)

Nokia

14,911.2

42,1

14,588.6

45,1

Research in Motion

7,233.6

19,9

4,311.8

13,3

Apple

3,938.8

10,8

1,725.3

5,3

HTC

1,957.3

5,4

1,276.9

4

Fujitsu

1,387

3,8

1,317.5

4,1

Others

6,896.4

18,8

9,094.8

28,1

The table above indicates that the smart phone sales increased from first quarter of 2008 to first quarter of 2009. Garther analysts illustrate the significant success in Research in

Motion and Apple sales. “Much of the smart phone growth during the first quarter of 2009 was driven by touch screen products, both in midtier and high-end devices,” said Roberta Cozza, principal analyst at Gartner, based in Egham, UK. Touch screen is not only one reason for this increasing, people all over the world wants mobile e-mail, music service and also internet from their phone with depending on the technological development in smart phone industry. (Stamford, Conn., May 20, 2009)

Comparison with Apple: The major competitor of Research in Motion is Apple iPhone. The cost of latest version Blackberry smart phone, which is called Blackberry Storm, has a higher production cost than iPhone 3G. According to iSuppli, a research firm in electronics market, one unit of Blackberry Storm cost is $ 202.89 although an iPhone cost is $174.33.

Despite the cost difference and popularity of Apple’s best-selling device, RIM still tops the league of smart phone sales. RIM said that it shipped 4.4 million Blackberry handsets in the fourth quarter alone, bumping up total numbers to about 14 million for the 2008 fiscal year, and more than doubling sales of 6.4 million for fiscal 2007. By comparison, Apple has said that it sold 2.3 million iPhones in the three months to December 29, and a total of about 4 million in the six months since the device’s US launch. Blackberry accounted for 41 per cent of all smart phones sold in the US in the fourth quarter, compared with the iPhone’s 28 per cent share, according to the Reading-based researcher Canalys. With this successful year RIM recently started targeting to become a leader in consumer market. The RIM’s chief executive Jim Balsilie added that despite of the global credit crunch they goals the increase the revenue and they will make more profit from the Blackberry sells. (Times Online, April 03, 2008).

The Blackberry producer Research in Motion declared that they beat the analysts’ expectations in forth quarter of 2009. RIM made a $ 518.3 million profit in the forth quarter and a 26 percent increase from the same period last year. The revenue for the forth quarter of 2009 was $ 3.46bn, up 84 percent from a year ago. According to co-chief executive at RIM Jim Balsillie, the company is very happy about their success of Blackberry products’ sales in forth quarter of 2009. (Tom Young Computing, 03 April 2009).

Future Plans of Research in Motion: Additionally, RIM also has some future plans to improve their products and reach their target. The company wants to add some new facilities to Blackberry. The company will add application of Java and Adobe Reader to provide the costumer better smart phone especially in internet world. With these applications consumers, who are using the Blackberry could access all information easily. The format of data will not be a problem for the Blackberry’s owners. The most effective innovation might be occur in the future is; RIM thinking to do a deal with T-mobile to provide costumers better service. Although the credit crunch, according to co-chief of RIM they will try to not lose their market position and continue the improvement of their products.

CONCLUSION

Today, Research In Motion Limited’s Blackberry is the leading product of representing wireless e-mail for the smart phone. The Blackberry are sold across North America and Europe and nowadays it is taken root the Asia Pacific. The Blackberry is a big innovation for the cell phone industry by provides the easiest way to connect e-mail with wireless to the costumers.

As far I am concerned that innovation should include some new ideas and creativity. Although wireless technology was being used by computers, the RIM’s Blackberry meets the wireless to the smart phones at first time. Now, all smart phones’ user expects from the phones to connect internet and want to check their e-mail while buying a new one.

RIM was founded in 1984 by two engineering student. The firm started to produce Blackberry in 1998 and sharply became popular in the smart phones’ market. Also RIM’s Blackberry has some competitor in today’s rivalry market such as Nokia and iPhone but the target of company is to become a leader in this sector.

These days, the RIM is looking for new innovations to improve the Blackberry. All industries need to develop and create new innovation to answer costumers’ expectations. Following the improvement in technology products has been becoming more and better and if an organization wants to reach top or to increase the sales, they innovate new products.

References

1. Michael Woods. “The History Of Communication”, Lerner Publication, First Edition – 2005

2. http://www.tech-faq.com/history-of-cell-phones.shtml

3. http://www.newscientist.com/article/mg20427301.100-the-pocket-spy-will-your-smartphone-rat-you-out.html?full=true

4. http://www.brighthub.com/office/collaboration/articles/8041.aspx

5. http://experts.thelink.co.uk/2008/12/19/a-brief-history-of-blackberry/

6. Kathryn Vercillo. “History of Major Blackberry Models from RIM 96”, available at: http://hubpages.com/hub/History-of-Major-Blackberry-Models-from-RIM

7. Marci Segal. “Quick Guide to the Four Temperaments and Creativity: A Psychological Understanding of Innovation”, Telos Publication, 2003.

8. Ralph Landau, Nathan Rosenberg, National Academy of Engineering. “The Positive sum strategy: harnessing technology for economic growth”, Conference publication, 1986.

9. Swastik Nigam, “Understanding New Product Innovation: Research in Motion’s Blackberry” ,available at: http://insightory.com/view/231//understanding_new_product_innovation:_research_in_motion%27s_blackberry

10. http://www.businessweek.com/innovate/content/apr2008/id2008044_416784.htm

11. Tom Young Computing, “Blackberry maker sees strong profit growth”, 03 April 2009, available at: http://www.computing.co.uk/computing/news/2239782/blackberry-maker-sees-strong

12. Stamford, Con., “Gartner Says Worldwide Mobile Phone Sales Declined 8.6 Per Cent and Smartphones Grew 12.7 Per Cent in First Quarter of 2009”, available at: http://www.gartner.com/it/page.jsp?id=985912

13. http://laptopcom.blogspot.com/2009/01/apple-iphones-are-less-costly-to.htm

14. http://business.timesonline.co.uk/tol/business/industry_sectors/telecoms/article3676963.ece