Blackberry Porter's 5 Forces

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The breakthrough of the smartphone industry is revolutionary to say the least. It is safe to say that we have developed a culture of smartphone dependence, ever since the smartphone industry emerged in 2007. In 2012, industry leaders; Apple, Android, Samsung, and to a certain extent Blackberry have made astonishing profits. Although the sales of these tech giants are undoubtedly impressive, they are not an indication of profit potential, so what is the profit potential of the industry in 2012? By using Porter's five forces model, we can conclude that the profit potential for the smartphone industry is moderate.
Porter's five forces model include the threat of new entrants, the threat of suppliers, the threat of buyers, the threat of substitutes,
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One of the most significant factors is differentiated industry products, threat of entry is low when product differentiation exists which it does in the smartphone industry. Apple, Android, Samsung, and BlackBerry all have distinct products that resulted in consumer brand loyalty "In essence, they had built what was considered the best and most secure email service available. They also had a cultivated a cult following among customers­-so much so that some began to refer to the BlackBerry as a "CrackBerry,""(Burr et al., Make or Break at RIM(in2013):Launching BlackBerry 10). The fact that buyers face low to no switching costs provoke a high threat level, which leads us to the substitutes force of the Porter's …show more content…
Exhibit 4 in "Make or Break at RIM(in2013):Launching BlackBerry 10" shows that 20% of global users used IOS, 3% Android, and 66% other which indicates a moderate threat level for competitors. A high threat level exists in the form of incumbents firms highly committing to the business in the industry. BlackBerry serves as a good illustration of an incumbent firm commitment when it acquired, QNX which is acknowledged to be a versatile, and reliable operating system “Only three years after the acquisition, QNX was already in use in nearly 7 out of 10 in vehicle computers" (Burr et al., Make or Break at RIM(in2013):Launching BlackBerry 10). The perishability of a product is also a factor that indicates a high threat level; smartphones have a life expectancy of two years. Another factor that produces a high rivalry threat level is that products and services are direct substitutes, which is the case with Apple, and Android. The five forces model analysis resulted in moderate, low, moderate, and high respectively, which yields an overall moderate profit

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