It’s ironic that BlackBerry Limited (NASDAQ/BBRY) announced that it was looking at viable strategic alternatives on Monday on the same day speculation grew that rival Apple Inc. (NASDAQ/AAPL) could be looking at launching a much-needed new “iPhone” in September.
So, BlackBerry appears to be throwing in the towel, which, of course, I have said it should have done since the iPhone became the go-to smartphone in the U.S.
BlackBerry CEO Thorsten Heins—once the optimist—appears to be facing reality in light of the market gains in not only Apple but also Samsung and “Android”-based smartphones. BlackBerry’s new line of the “Z10” and “Q10” are good phones, but it’s a case of too little too late. While the Z10 may be technically better than the iPhone, the difference was simply not enough to sway users to give up their iPhones and “Galaxys” (Samsung).
Even on the low end of the smartphone market in the emerging markets, BlackBerry was not faring well and is losing market share to cheap Chinese phone makers ZTE and Huawei Technologies. There’s also speculation that Apple may finally be launching a cheaper version of its iPhone to compete in the low-cost but critical markets in Asia and Latin America. Apple was recently meeting with some of the top mobile-phone providers in China. We can guess why.
While BlackBerry is dead as a viable investment (the company does have some valuable patents), Apple is now at a critical juncture of its history. You kind of wish the late Steve Jobs were still around. The stock has rallied but remains far below its high of $705.00.
Apple’s chart shows the decline from the peak, but the stock was able to hold at $400.00. The blue oval indicates the breakout from the downtrend, but for the stock to have enough legs to move higher, the company must deliver some fresh news that it can compete globally.
Chart courtesy of www.StockCharts.com
Apple is still king in America, but watch out for Samsung.
What Apple needs to do is to compete with Samsung in the global economy as well as Nokia Corporation (NYSE/NOK) and the other cheap smartphone providers. We are talking about a market with well over a billion users, and that’s huge for any smartphone maker.
If Apple can somehow cut the cost to buy its phone in the emerging markets (read “Whoever Does This First Will Be the Winner in the Smartphone Market”), then it has a chance to become that $1,000 stock that many had expected it to be. It will not be easy, but it is possible.