Brand Wars: Why the mobile networks are smart to stick with BlackBerry and why Windows Phone can't win

In a smartphone platform market dominated by iOS and Android, it's a fun game to speculate which challenger platform could succeed in establishing itself as the credible third platform. Windows Phone and BlackBerry are the two favorites, but there is also speculation that Samsung may build their own platform, or that Amazon may enter the smartphone category following their entry into tablet space.

Indeed some pundits argue that these challengers need not bother as there is no room for a third platform in the smartphone market.

For the network operators, they need to make a careful choice about which challenger platform(s) they stock and promote to their customers.

Part of this decision will be driven by supplier push factors, i.e. evaluating which smartphone manufacturers will pay the network operator to stock and promote their smartphones. For cash squeezed network operators, this revenue stream is an important consideration.

Most of this decision will be driven by customer pull factors, i.e. trying to figure out which competing platform will enjoy the most customer demand to help make the network operator's sales role an easy as possible. 

Drilling into this decision, mobile network operators face a dilemma in determining how to divide their channel space between the two big challengers, BlackBerry and Windows Phone.

Analysing this decision through a strategic lens, Windows Phone would seem to be the best bet given the strength of Microsoft's balance sheet to invest whatever is necessary in terms of software engineering development and marketing support to make their smartphone platform a success.

The flip side of this view is that RIM have a finite amount of cash, $2.9b by reports, that needs to sustain it through the launch of the BlackBerry 10 platform later this month. Opinion seems to be that 2013 is make or break for BlackBerry, and that the business will fold or be bought out if the BlackBerry 10 smartphones don't get immediate traction. 

Given the obstacles faced by RIM in challenging Microsoft, why should mobile networks bother to stock the BlackBerry platform in any meaningful way?

One answer is driven by business and corporate customers. Although they have been abandoning the platform over recent years, business customers are arguably the customer segment most sympathetic to the BlackBerry brand. Network operators look to offset margin erosion in the fiercely competitive consumer segment with the more stable margins available in the business segments, hence it makes sense to stock business friendly smarphones.  

Focusing on the consumer market though, I'd argue that network operators should prioriatise BlackBerry over Windows Phone due to the brand superiority BlackBerry enjoys over Windows Phone.

Measuring consumer brand engagement is a bit of a black art, although many marketing agencies will quite happily take your money to perform brand sentiment analysis, usually in the form of customer surveys or focus groups.

An easier (and free) way of doing this is by using the Google Trends analysis function, which provides a longitudinal comparative analysis of up to 5 search terms, driven by the volume of these searches.  You can look at searches worldwide, or restrict to searches originating from a particular country.

Here's an example of people in the UK searching Google for the terms iPhone, Android,  BlackBerry, Windows Phone and Lumia since 2004.

This story looks pretty familiar. We can see the growing volume of iPhone searches over time, with peaks emerging during the frenzies occurring in the period preceding a new iPhone model launch.

The graph is normalised against the biggest peak search volume of any of the variables, so in this case, the peak volume of Google searches for "iPhone" in the UK since 2004 occurred in September 2012, the month of the iPhone 5 launch.

The iPhone's search volume highwater mark of September 2012 is given the scale of 100, and all other searches for iPhone and the remaining platforms are normalised against this 100 scale.

Searches to date in January 2013 show:

  • iPhone: 49
  • Android: 20
  • Blackberry: 16
  • Samsung Galaxy: 15
  • Windows Phone: 2

Although Samsung Galaxy is a sub-set of Android platform, I thought I'd include it given the strength and market leadership of the Samsung Galaxy brand within the Android platform.

Takeouts here are:

  • UK people are still Googling "iPhone" in January 2013 at almost half the rate they did during the September 2012 peak frenzy, and at 2/3s the rate they did during the September 2011 iPhone 4S launch frenzy, showing consumer interest in the iPhone brand remains very strong;
  • UK people Google "iPhone" at 2.5x the volume they do "Android";
  • "Android" as a brand has been embraced by consumers - they actively search using this brand name;
  • few people are Googling "Windows Phone" compared to the other platforms.

(The "Note" at the bottom of the chart indicates Google made some changes to their geographical categorisation of searches at this date. It does not impact the relativities of the platform search comparisons)

To improve the clarity of the relative performace of the smartphone challenger brands, I'll swap out "iPhone" for "Lumia", as Lumia is the most high profile brand on the Windows Phone platform.

BlackBerry's search volume soared during the second half 2011, but this result flatters to deceive as it coincided with BlackBerry service outages. Not surprisingly, there is sharp decline in 2012 coinciding with the brand becoming less relevant to consumers as they abandoned their BlackBerries for an iPhone or Samsung Galaxy.   

Still, despite all the problems faced by BlackBerry over the past two years, consumers still search "BlackBerry" at a comparable rate to which they search for "Android" and "Samsung Galaxy".  This suggests BlackBerry as a brand is still relevant to consumers, and performs at a similar level to the Android and Samsung Galaxy brands.

Microsoft and Nokia should be much more worried. Despite all the marketing spend invested in the Windows Phone and Lumia brands, there is no evidence these brands are gaining significant traction with consumers to allow them to compete with brands such as BlackBerry or Android, let alone iPhone.

Now it's time to get really cruel.

What happens if you swap out BlackBerry, Android and Samsung Galaxy for some recent big name tech failures, like Google TV, 3D TV and BlackBerry Playbook?

You get something like this:

Here you can see clearly that Windows Phone as a brand shares the same place in the hearts of consumers as Google TV, BlackBerry Playbook and 3D TV. It's not an encouraging sign for Microsoft.

Nokia should be more happy, as there is evidence they are getting some traction with the Lumia brand compared with the Windows Phone brand, but it is still a long way off the brand engagement enjoyed by BlackBerry, Samsung Galaxy and Android.

Windows Phone is a great smartphone platform, but a terrible brand. As long as Microsoft fails to address the core problem of brand failure, BlackBerry is going to have a strong advantage in establishing themselves as the third smartphone platform.

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