Desperate Time For RIM – Senior Executives Leaving, Further Reduction In Handsets Prices Expected

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It is rightly said that when the ship starts sinking, first to leave are rats. In modern day whether you call them rats or opportunists, many senior executives are leaving loss making and sinking ship of Canada based – RIM – makers of BlackBerry handsets and disastrous tablet called PlayBook. Nowadays, experienced professionals have aplenty opportunities in emerging markets of mobile technology and whosoever is getting  the opportunity in competitive companies is abandoning RIM instantly.

Alan Brenner, a senior Vice President for the BlackBerry platform, will leave after a transition period, and Alistair Mitchell, a Vice President for the BlackBerry Messenger instant messaging product, has already left RIM. A stream of executives have left RIM in the past year as its once-dominant market share has slipped amid fierce competition from Apple Inc  and phones running on Google Inc’s Android. RIM shares have dropped more than 80 per cent from a peak of almost $70 in February 2011, to $12.67 on Nasdaq.

In July RIM slashed 2,000 jobs, or about 11 per cent of its workforce, to cut costs as sales and profit fell. Its developer relations and sales and marketing teams were particularly hard hit. Head of marketing Keith Pardy left in March 2011, just before RIM launched its PlayBook tablet, which fared poorly. Two of his staff later moved to Samsung Electronics. Chief Operating Officer Don Morrison resigned in July after taking medical leave. A second COO, Jim Rowan, left last week along with Chief Technology Officer David Yach.

It is desperate time for RIM and they are adopting desperate measures to boost its sales of handsets especially in markets like India where they have considerable market share. As blogged by us earlier when RIM slashed prices by approx. 26% for its handsets in India, we have predicted that further reduction is not far away. As per media reports, RIM is considering more price cuts for its select handsets for India market, which is one of  their focus markets where lowering prices will help it reach more customers.

BlackBerry handsets are highly priced and by cutting prices, it will get the benefit of economies of scale through increased sales. In order to be successful in India, Research In Motion will have to keep its products in the range of Rs.10,000 to maximum 15,000. BlackBerry has only one product, Curve, which is in price range of Rs.10,000. Other Indian vendors like Micromax, Karbonn and Lava have launched low-cost smartphones and they will give tough competition not only to BlackBerry but also to other foreign vendors and inorder to remain afloat in entry level segments of smartphones, all the vendors should have products in the range of Rs.10,000 to meet this challenge. Samsung has vast portfolio and have six handsets in this range and Nokia has Asha series to address to this segment.

RIM will have to cut its prices drastically to remain popular in India otherwise it will be very difficult for them to survive. Let us see how they strategise their marketing plan in the coming days and lot will depend upon this.

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