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s1 {font: 8.0px Helvetica}RESEARCH IN MOTION 1Report on Research in Motion: The Mobile OS Platform WarS. Malciute, J. Schmith, F.

DanyCopenhagen Business School27th of November 2017RESEARCH IN MOTION 21. IntroductionIn early 2000s, Research in Motion with their Blacberry phone was the biggest names in the mobileindustry, however in recent years Apple’s iPhone and Android phones are taking the crown instead.In this papper we will review lock in strategies of Research in Motion, Apple, Android andMicrosoft. We will discuss the reasons for success or failures of these brands. Paper will start withanalysis of Apple’s approach on increasing lock-in, moving on to Android’s opposite approach ofusing open-source strategy and its’ effect on lock-in. Continueing on Microsoft’s decision ofentering the mobile OS market and their take on lock-in strategy. Finally, based on other brandsstrategy analysis we will explain our proposals for Research in Motion future strategy, in order forthem to be able to compete in mobile OS platform war.RESEARCH IN MOTION 31.

Apple’s approach in increasing lock-inLock-in is created through switching costs that occur by swapping the product or service which iscurrently in-use. Referring to switching costs as in regard to monetary expenditure, use of timeand applied work, those switching costs can be altered per libitum by any company that owns theproduct or service, demanded by a customer (Shapiro & Varian, 1999). Several techniques can beused to shape the switching costs in order to support the companies’ strategies and goals. Byestablishing a strong lock-in system the applied lock-in strategy can for example assure growingrevenues and a loyal customer base. Three main lock-in techniques have been identified in regardto Apple’s lock-in approach by applying Carl Shapiros and Hal R. Varian’s findings in this field ofstudies (Shapiro & Varian, 1999).

1.1 Apple’s Lock-in TypesDurable Purchases: To make use of the durable product approach companies often sell qualitativelystrong products which are longtime durable, but have a relatively high price. Knowing that once acustomer purchased the product he won’t swap to another product very quickly (Shapiro & Varian,1999). Apple’s ecosystem comprises almost all modern IT-Technology (Hardware and Software)for the consumer markets, making users willing to lock-in to the whole ecosystem once they boughtone of the products as they will quickly realize the high-quality standard (Villas-Boas, 2017). Inaddition to that, a lot of Apple’s peripherals exclusively work with Apple products. Thiscircumstance forces the user to buy Apple’s follow-on products as alternatives are almost not exist(Villas-Boas, 2017). With each new product, the customer buys, her lock-in will automaticallyincrease as her switching costs grow.

On top of that a lot of Apple’s software is included by buyinga product such as Apple’s office suite iWork which users would have to buy additionally whenswitching products (Gil, 2017). Nevertheless, switching costs do not only occur on the productlevel but also from the vendor perspective. Eventually every durable product will find it’s end andthe producer of this product must make sure that the customer stays locked-in, as the switchingcosts are now inevitable to the customer (Shapiro & Varian, 1999). Apple approaches its customersfrom different angles.

The company offers inducements in form of additional products such as freeheadphones when buying the new product at Apple (Mayo, 2017). Which can be defined as anattraction approach by giving the customer the feeling of instant satisfaction, leaving the store withnot one but two products. Another method is that Apple reduces the price of the new productRESEARCH IN MOTION 4according to the condition of the old product. This method can be referred to as a rather economicallogical approach. A rather emotional approach might be the sustainable recycling policy (Moodie,2017).

The customer knows that there is taken good care of his old product if he buys a new oneat the same store. If the customer can be convinced and buys the product at Apple again thecomplete lock-in is assured anew and can be further increased.Another method of increasing lock-in that can be referred to is the utilization of updates (Shapiro& Varian, 1999).

Apple’s upgrades are free to use and are usually only publicized when they beholdsomething innovative for the user (Yegulalp, 2017). By this, Apple lets the user know that she willalways stay on top of innovation without paying an additional dime to her prime purchase.Apple has an efficient after-market service which is for free to every customer plus Apple’sguarantee policies are relatively user-friendly (Casey, 2017). These circumstances again increaselock-in as they comfort the user in his usage of the product even if malfunction occur.

Brand Specific Training: Apple offers trainings directly in the store for free (Merrick, 2017). Thisway particularly the generations that are not native with the usage of digital devices are gettinglocked into its ecosystem, as they are unlikely to learn another OS (Shapiro & Varian, 1999). Thethird lock-in type Apple uses is “Information and Database” (Shapiro & Varian, 1999). The Applecloud makes data automatically available, on all Apple devices in a well-organized manner(Garden 2017). Thus, the stipulation to switch brand is lowered and the lock-in increased becauseof handy data portability and therefore lowered necessity of changing the brand. Also, switchingbrand is connected to an investment of time to drag the data out of Apple’s system and sort it in anew system.

RESEARCH IN MOTION 52. Open-source influence on lock-in and influence on Android establishment in the mobileOS marketIn 2012, taking almost 50% of total US smart phone market share by operating system and withmajority of smart phone manufacturers onboard, Android established one of the leading positionsin the mobile OS market (Maccormack, Dunn, & Kemerer, 2013). Since Google published theAndroid operating system as open-source, a number of manufacturers adopted and launchedAndroid OS powered devices and quickly a majority of US wireless providers had Android phonesavailable in stores (Maccormack, Dunn, & Kemerer, 2013). It is clear that open-source played partin Android’s growth and success. As well as, it allowed Android to compete at the time with oneof the major leader companies in the US smart phone market – Apple, which had strong lock-inapproach.2.1 Android Open-source effect on lock-inNot everyone agrees with Apple’s rigid lock-in system, so Android’s open-source operating systemdirectly competes by addressing different target groups and offering more options (Maccormack,Dunn, & Kemerer, 2013).

Realizing the diversity in an open-source ecosystem a consumer is morelikely to question Apple’s lock-in system.Open-source has a little to none effect on Lock-in since the product is less controlled by a singleentity and more so of an alliance between the handset manufacturers and Google. Further thepartners can customize the OS according to their needs so they become less reliant on Google(Maccormack, Dunn, & Kemerer, 2013). Open-source create great opportunity to quickly improveengineering and manufacturing skills. This is a great opportunity to grow mobile market, createcompetition between various manufacturers and speed up advancement of technology as well keepsmooth transition from earlier generations of machines, which helps to reduce switching costs(Shapiro & Varian, 1999). The main advantages of open-source compared to proprietary forconsumers are:• No lock-in to single vendor – consumer can choose Android powered devices betweenvarious vendors.

RESEARCH IN MOTION 6• No lock-in to specific wireless provider – Android devices are available at all majorwireless providers stores and consumer can choose between different providers and plansoffered.• Lower switching costs – consumer can easily purchase complementary devices that areuniversal to majority of Android devices and consumer can switch from one vendor smartphone to other and it will require minimum to no time to learn the new interface or software.• Diversity in prices for Android devices, makes Android products accessible for wideraudience.Taking in to account that Google has no control over what changes are done to Android OS,diversity in products often coming with a payoff such as less security in an open source system orlow-quality performance (Maccormack, Dunn, & Kemerer, 2013). However, having access to suchbroad audience creates brand specific training lock-in on Android OS. Considering it would requireminimum effort after switching Android devices from one vendor to other, to learn new interfacesince foundation of the OS is the same.2.

2 Open-source contribution to Android’s establishment in mobile OS marketGiving a strong product to the market for free, Google allowed the market to develop highcompetitiveness particularly in regard to Apple. Additionally, it gave direct and easy opportunitiesto those who wouldn’t agree with Apple’s conditions such as app developers and users who wantdifferent carriers (Maccormack, Dunn, & Kemerer, 2013). Thereby addressing other target groupsand wider audience.The choice of open-source has had positive impact for Google since:1. Android was made available for free making it cheaper to use than competing systems anda viable choice of operating system for both entry level and premium devices.2.

The free licensing has boosted adoption, which have created positive externalities and adiverse app ecosystem.On a less positive note, the open approach has allowed for a less uniform costumer experience,since Google doesn’t impose minimum requirements for hardware, quality or control theimplementations of Android done by third parties (Maccormack, Dunn, & Kemerer, 2013). ThisRESEARCH IN MOTION 7have led to consumers perceive Android products’ quality to be inconsistent. Nevertheless, opensourcemade major contribution to the overall growth of mobile market.3. Microsoft’s decision and strategy of entering the Mobile OS market from theperspective of lock inWhen Microsoft launched their first mobile operating system (OS), Windows CE in 1998, theysought to expand their position in desktop computing to the mobile category by developing a”slimmed-down operating system that could be used in” (Maccormack, Dunn, & Kemerer, 2013,s. 11) what Bill Gates referred to as “PC companions” (Maccormack, Dunn, & Kemerer, 2013, s.

11). Microsoft didn’t produce the mobile hardware, and thus needed hardware partners to makethe OS available. For that reason, they licensed the OS to “original equipment manufacturer foruse wherever they saw fit” (Maccormack, Dunn, & Kemerer, 2013, s. 11) and thereby took arelatively open approach to hardware control.By entering the marked for mobile OS, Microsoft sought to utilize its existing install base (Shapiro& Varian, 1999) by offering an extended use case within the windows eco system in the mobilecategory. This minimized users’ perceived switching cost, as they would already be familiar withthe interfaces and functionality from their desktop.

In addition, the move (if successful) wouldincrease customer lock-in to the Windows eco system overall. The lock-in would increases on twoparameters:1. Information and databasesAs users use more Windows products they will rely deeper on that architecture over time,and continuously store more information in Microsoft’s proprietary file formats. Thisincrease customer lock-in, as the number of files that are incompatible with other OS’s willincrease over time, which increase the switching costs of the costumer if they wish to leavethe platform, since they would have to convert the files in order to be able to access themon another OS (Shapiro & Varian, 1999).

2. Durable productsThe more the user invests into the Windows eco system, the less likely they are to leave itas the different devices complement each other, and thus ties the individual investmentscloser together. This means that even though the investments in individual productsRESEARCH IN MOTION 8depreciates over time, the total investment will still be at a significant value as the user willhave to replace the entire system to achieve a similar functionality on a different platform(Shapiro & Varian, 1999).Microsoft’s decision to enter the mobile OS marked seems like a rational decision at thetime, as it makes sense to pursue a strategy which increases Windows market dominance andcustomer lock-in. Although one could argue, that it was a flawed decision to develop WindowsMobile as a “PC Companion” rather than to see it as a completely different device. As noted byMicrosoft’s competitor Netscape “Microsoft was hell-bent on dominating the entire informationinfrastructure of the world” (Maccormack, Dunn, & Kemerer, 2013, s. 12), but unfortunately itdidn’t go according to plan.In 2007, Steve Jobs launched the IPhone which fundamentally changed the smart phone industryto a more consumer oriented direction with a tight focus on user experience, new technology andlater on an app store.

Microsoft was slow to keep up, and didn’t introduce a similar experiencebefore late 2010 (Maccormack, Dunn, & Kemerer, 2013) which placed Microsoft in the positionas laggard on the market. One possible explanation for the reluctance to embrace a consumeroriented smartphone experience could be the fact that Microsoft saw mobile as an extension of thedesktop. In 2011 Microsoft announced a partnership with Nokia, in an attempt to ensure qualityhardware for the platform by moving Nokia from their own Symbian platform to Windows Phoneexclusively (Maccormack, Dunn, & Kemerer, 2013).The slow response of Microsoft led to poor market penetration, which made the platformunattractive for developers, as the size of the network was too small compared to other platforms.This led to Windows Mobile having substantially smaller app store library than competingplatforms. By April 2012, the Windows Mobile app store contained about 80.

000 in comparisonto the approximately 430.000 and 500.000 apps of the Android Play store and IOS App store(Maccormack, Dunn, & Kemerer, 2013). The same tendency is visible in the market shares whereWindows phone accounts for 3% globally in the end of 2012 in contrast to Android at 69,7% andIOS 20,9% (Statista, 2017).

RESEARCH IN MOTION 9In 2016 Microsoft sold Nokia (Microsoft News Center, 2016), which is now producing phoneswith Android, and in 2017 Microsoft officially discontinued Windows Phone (Spence, 2017) -thereby ending the era of Microsoft in mobile.4. RIM future strategy to compete in the mobile OS marketCurrently, Apple and Google increase degree of consumer lock-in and switching costs and thefurther they go the harder it will be to concur or even compete with these giants.

As Android servesthe market for users with rather open source interests and Apple sources the market as an integratedecosystem (Maccormack, Dunn, & Kemerer, 2013). Although RIM have a decent share of themobile US OS market at around 16% in the end of 2011 it doesn’t seem to be enough forBlackberry to compete head to head with Android or IOS given that the they both hold much largermarket shares (Maccormack, Dunn, & Kemerer, 2013). As the majority of the market is alreadyserved RIM should rather look at the long tail of the market and find a promising niche. Thecompany has gathered experience in that kind of markets over the past years and might be able todevelop sustainably from there.For example, it could specialize in a highly secure ecosystem which would be offered towardsgovernments and companies with a critical interest in secure ways of communication. This wayalso a lock-in strategy could be applied by promising durable product with high security standards.

These standards can only be obtained by staying in the system of RIM in regard to both hardwareand software.RIM could choose to focus on a niche segment such as corporate solutions like the ones that laidthe foundation for RIM, but that market is too being pursued by Apple and Google. Apple have forinstance entered a partnership with IBM to service Corporates better with integrated solutions.From where RIM is at it doesn’t look like they are on a safe path towards the future as they losttheir leading position within smart communications and were to slow to catch up.RIM could benefit from a larger network and app ecosystem, so it would definitely be worth toconsider discontinuing their own OS and focus on a customized version of Android with RIM appsto deliver specialized services in the future. That would make RIM a part of a much larger networkthan the one they are on at the moment, and thus make their product more attractive to consumers.RESEARCH IN MOTION 10However, it would also mean that they would have to write off their investments Blackberry OSand loose its control over the platform. In addition, that move might reject loyal customers whilereducing the switching costs away from Blackberry OS after the switch to Android making RIMmore exposed to competition from other manufacturers.

ConclusionApple and Google’s Android are the two leading brands in current mobile OS market and thesebrands continue to increase lock-in, by using two very different, but succesfull strategies. Due tothe scale and accomplishments of these companies, other brands struggle to enter the market andMicrosoft had a very unsuccessful attempt and never achieved such popuparity as Apple orAndroid. As well as RIM was not able to keep up with competition and in order to gain popularitythey once had, they need to achieve larger network and app ecosystem.

RIM could achieve this bydiscontinueing their OS and using Android to their advantage and re-enter the market by focusingon specialized services.RESEARCH IN MOTION 11BibliographyCasey, H. (2017). Is Apple Customer Service Good? 2017 Rating.

Laptopmag.com. Retrieved 3November 2017, from https://www.laptopmag.com/articles/apple-tech-supportGarden, H.

(2017). How the Apple iCloud Works. HowStuffWorks. Retrieved 3 November 2017,from https://computer.howstuffworks.

com/cloud-computing/icloud.htmGil, L. (2017). Apple makes iWork suite free for everyone.

iMore. Retrieved 3 November 2017,from https://www.imore.com/apple-makes-iwork-suite-free-everyoneMaccormack, A., Dunn, B., & Kemerer, C. F.

(2013). Research in Motion: the Mobile OSPlatform War. Boston: Harvard Business School Publishing.Mayo, B.

, & Mayo, B. (2017). Apple 2017 Back to School deal: free Beats headphones withselect Mac and iPad Pro purchases. 9to5Mac. Retrieved 3 November 2017, fromhttps://9to5mac.com/2017/07/12/apple-2017-back-to-school-deal-free-beats-headphoneswith-select-mac-and-ipad-pro-purchases/Merrick, J. (2017). Getting The Most From The Apple Store.

Computer Skills Envato Tuts+.Retrieved 3 November 2017, from https://computers.tutsplus.com/tutorials/getting-themost-from-the-apple-store–mac-31410Moodie, A.

(2017). Apple announces new recycling program as interest in green gadgetsgrows. the Guardian. Retrieved 3 November 2017, fromhttps://www.

theguardian.com/sustainable-business/2016/mar/21/apple-tim-cook-renewrecyling-electronic-waste-landfill-environment-techMicrosoft News Center. (2016, May 18). Microsoft selling feature phone business to FIH MobileLtd. and HMD Global, Oy. Retrieved from News Center:RESEARCH IN MOTION 12https://news.

microsoft.com/2016/05/18/microsoft-selling-feature-phone-business-to-fihmobile-ltd-and-hmd-global-oy/Shapiro, C., & Varian, H.

R. (1999). Information Rules: A Strategic Guide to the NetworkEconomy.

Boston, Massachusetts: Harvard Bussiness School Press.Spence, E. (2017, July 12). Windows Phone is Dead, Long Live Microsoft’s Smartphone Dream.Retrieved from Forbes: Tech. All things Mobile :https://www.forbes.com/sites/ewanspence/2017/07/12/microsoft-windows-phonewindows10-mobile-strategy/#8a60bc8172c5Statista.

(2017, October 29). Global mobile OS market share 2009-2017, by quarter. Retrievedfrom Statistics: Technology & Telecommunications:https://www.

statista.com/statistics/266136/global-market-share-held-by-smartphoneoperating-systems/Villas-Boas, A. (2017). These 5 little features make the Mac and iPhone combo hard tobeat. Business Insider. Retrieved 3 November 2017, fromhttp://www.

businessinsider.com/apple-ecosystem-2016-6?r=US&IR=T&IR=TYegulalp, S. (2017).

Apple’s biggest new announcement was the free OS X upgrade. InfoWorld.Retrieved 3 November 2017, from https://www.infoworld.com/article/2612800/mac-osx/apple-s-biggest-new-announcement-was-the-free-os-x-upgrade.html


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