Since 2013 there have been three main factors that influence the Smartphone industry including 1) the relationships between hardware manufacturers and platform leaders, 2) the carrier support and market demand, and 3) the decision by many major communications companies to capitalize upon major trends. Within the smartphone industry there are five key forces at work. The first is the constant threat of new entrants. The fixed cost for research and design on hardware and software exists but there is still a need for good talent, manpower, and high initial investment especially with regard to intellectual property rights. The second is the bargaining power of the supplier. Most hardware used to produce smart phones are exactly the same, including the same storage, glass screens, and architecture processors which means the supplier has more power. The third is the bargaining power of the buyer. Buyers have many choices on the market today and changing phones/providers is easier than ever. Many suppliers are now offering significant variety in terms of the applications and features afforded. Many buyers in fact give the suppliers increased bargaining power. The fourth is the threat of a substitute. For example, tablets are often substituted for smart phones because of their similar functionality, interface, and applications. The cross price elasticity is high from a featured phone. That all influences the fifth key force which is the intensity of rivalry, something that grows because of the aforementioned four factors and often results in better quality, advanced specifications, and improvements such as software bundles, cameras, better processors and storage, or increased connectivity.
That being said, BlackBerry Limited gains its primary revenue from the wireless BlackBerry solution, something that includes phones, tablets, service, as well as software. This company, above its competitors, maintains strong relationships with hundreds of global carriers and loyal customers around the world, particularly because of its core competency with regard to security encryption and its QWERTY keyboard. Blackberry Limited is a global leader among mobile communications with positive financial results for the last few years. The company can thank acquisitions, joint development deals, partnerships with communications companies, and the launch of new BlackBerry devices for this growth.
Competition from Apple and Samsung has been less successful in recent years only in the public. Apple and Samsung have endured multiple legal battles, those surrounding infringement cases. But above and beyond that, Samsung has dealt with a variety of press problems when it admitted to paying ghostwriters to leave negative reviews, and when it was sued over its bad working conditions in Brazil. These have negatively influenced the company’s success financially. Apple has remained competitive with its alternative products. Samsung however, has floundered behind both.
In terms of profitability, Apple ranked among the most profitable in 2014, and while Apple did face a slight drop in its profitability over the years, it has been able to remain constant while BlackBerry and Samsung have fluctuated more violently.
With regard to Return on Assets, Apple has remained ahead of Samsung and Blackberry.
Based on ROI Apple has done quite well over the last four years, but in 2011 was tied with Blackberry. With regard to liquidity, Blackberry proves again that it is ahead of the competition, with Apple not far behind. In terms of a quick ratio, BlackBerry remains ahead of tis competition as of 2014. With respect to financial leverage, Blackberry has tied with its biggest competitor Apple, for the first time in four years. In terms of the number of days of sales outstanding, Blackberry took the lead for the last four years, with Samsung closely behind. Based on the number of inventory days, Samsung has been forced to fall far behind its competitors, stretching itself too thinly. Over the last four years, Apple has seen higher payable days but BlackBerry has jumped significantly over the last two, doubling the amount of payable days and leaving Samsung behind with its dropping figures.
Overall, BlackBerry is doing well against its main competitors, significantly when compared to Samsung. It stands to reason that with Samsung’s efforts to be more than just smart phones it has damaged its productivity and efficiency over the last years and in the interim, BlackBerry has taken charge and leapt ahead of the curve.