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A person poses the Blackberry Torch 9860 at a release party to promote the BlackBerry OS 7 devices in Toronto August 3, 2011. (MARK BLINCH/REUTERS)
A person poses the Blackberry Torch 9860 at a release party to promote the BlackBerry OS 7 devices in Toronto August 3, 2011. (MARK BLINCH/REUTERS)

BlackBerry's perceived brand value takes a dive Add to ...

As if the release on Thursday afternoon of disappointing second-quarter results weren’t bad enough, Research In Motion Ltd. also got a failing grade on its brand stewardship from a global brand consultancy.

In a study on the top 15 Canadian brands, London-based Brand Finance said BlackBerry’s brand value had dropped almost 24 per cent since January, down to only $3.3-billion.

The company has lost its lead position in the smart phone industry to competition from Apple Inc. and devices powered by Google Inc.’s Android system. This summer, it announced its first large-scale layoffs.

“The trouble with a company like RIM is, they are your classic product-push kind of company: They’re engineers who’ve learned how to do marketing – and probably not very well,” said David Haigh, the chief executive officer of Brand Finance. “Whereas if you look at Apple – yeah, they may have started off as engineers, but they’re primarily marketers who’ve learned how to fulfill the desires of their target customers.”

Most other Canadian brands fared better on the study, including the perennially winning financial institutions, which took five of the top six slots. Even so, Brand Finance believes the nation’s banks have fallen short of their potential.

“Given the opportunity that was handed on a plate to Canada with the financial crisis, [the banking sector has]made a pretty poor job of actually taking that forward into the world markets and saying there is a significant difference between Canadian financial brands and any other financial brands,” Mr. Haigh said. “It hasn’t really capitalized, and my perception is partly it’s because Canadians are a bit modest.”

The study noted that the combined value of the top 10 Canadian brands is $47.3-billion: an impressive figure, but still short of the Brand Finance-determined value of the world’s most valuable brand, Google ($48.3-billion).

Brand valuations are determined by calculating a company’s expected revenue and so-called “royalty relief,” which is based on the estimated cost of licensing brands in the sector. Royalty rates range from one industry to another: A brewer might pay between 6 and 8 per cent of revenue for the local rights to a global beer brand, while a high fashion licensee might pay 12 per cent.

Brand Finance normally issues its study once a year, in January, but Mr. Haigh said that, “because of the double-dip recession, we’ve done [the study again]now to show the huge impact on brand values in the last six to nine months.”

Simon Houpt

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