Being an established brand adds significant extra value to a business and provides some security in poor economic conditions. For example, in Brand Finance’s list top 50 cosmetic brands by value, 19 of the 50 brands are over 60 years old, whilst 15 of them are over 100 years old. However, although brand loyalty can provide a cushion for many top brands, it cannot offer total protection from change and new competition, especially in sectors such as new technology.

The mobile phone market, for example, has recently seen significant changes in market share, with two of the market leaders, BlackBerry and Nokia, suffering rapid declines in sales and market share at the hands of Apple and Samsung.  In 2008, 139.29 million smartphones were sold worldwide. In the first quarter of 2009, Nokia had a global market share of 36.2% of the mobile device market making it the leading mobile device manufacturer worldwide until it was overtaken by Samsung in 2012.

BlackBerry, part of the Research in Motion group (RIM), accounted for 3% of global mobile device sales in 2011, making RIM the sixth most popular device maker. BlackBerry was widely referred to as “CrackBerry” in the United States, alluding to the addictive use by its owners.

In April 2010, BlackBerry accounted for about one in five smartphones shipped in the US, although Apple’s iOS and Google’s Android had already started to eat into its market share. BlackBerry announced new updated handsets in reaction to this new competition, but production delays meant it did not market its new Z10 and Q10 handsets until 2013. Although, reviewers praised the firm’s updated operating system and virtual keyboard, neither feature were seen as a significant advance and more importantly, BlackBerry’s app marketplace was less well-stocked than its rivals. Those consumers and firms who had already switched platforms saw little reason to pick these new ‘berries’ despite the $500 million spent on promoting the devices. Even Microsoft Windows Phones were being shipped faster than BlackBerries.

The real value of BlackBerry has always been its corporate accounts worth around $4 billion annually. Until recently its operating system and e-mail retained the loyalty of its users. However, in July 2013, the CEO of Blackberry announced that the firm was “exploring strategic alternatives”; short hand for the firm being in financial difficulties. Put simply, BlackBerry had failed to keep up with the market changes and increasingly demanding users. With the rise of the App store and “there’s an app for that” coming with the iPhone, RIM was in trouble. The lack of apps and a truly decent touchscreen made BlackBerry devices ‘uncool’ to younger consumers. In response to its continuing poor market performance, BlackBerry in a bid to shore up the platform decided to cut 4,500 jobs and make its instant-messaging system available as a free app to rival phone companies, such as Apple. The move is part of a comeback plan that also involves taking the company private in a $4.7 billion deal backed by its biggest shareholder.

By the third quarter of 2011, 52.5% of all smartphones sold to end users were phones with the Android operating system, which increased further to 79% by 2013 with Samsung overtaking Apple to become the world’s most profitable mobile phone company and leaving Nokia and BlackBerry drowning in its wake.

For Nokia, being first to market and becoming market leader has not prevented its ultimate demise as a mobile phone manufacturer. In September, Nokia having racked up losses of more than 5 billion euros over nine quarters, and seeing its shares falling 80% in value over the previous five years, finally gave up and sold its loss-making mobile manufacturing division for $7.2 billion to Microsoft. Nokia’s devices and services unit, which accounted for half of the company’s 2012 revenue, along with 32,000 employees, will transfer to Microsoft by the first quarter of 2014.


Forecast: Blackberry smartphone users in the U.S. 2010-2014
You will find more statistics at Statista


Nokia: global market share per quarter 2008-2013
You will find more statistics at Statista


Global Apple iPhone sales Q3 2007-Q3 2013
You will find more statistics at Statista

IB Style questions

1. Define the following terms:

  • Market share
  • Brand

2. Explain the advantages of being ‘first to market’.

3. Analyse the impact that external environment had on Nokia’s objectives and strategy.

4. Evaluate the decline of Blackberry in the smartphone market.