New Phone Bullish for BBRY Stock
Recent years have not been nice for investors of BlackBerry Limited (NASDAQ:BBRY). Just this year alone, BBRY’s stock price has plunged more than 30%. Sure, the company has lost much of its competitiveness in the hardware business, but its newly launched “Android” phone, the BlackBerry “Priv,” might help it regain some lost grounds. Moreover, BBRY is expanding its fast-growing device management business with two new acquisitions.
The neat thing about the current BlackBerry is that the company is willing to adapt to new situations. Previously, BlackBerry had always been using its own operating system, “BlackBerry OS.” The company tried to use its latest “BlackBerry OS 10” operating system to regain some of the market share that was lost to smartphones running on “iOS” or Android platforms. However, it didn’t really help the stock. According to data from International Data Corporation (IDC), BlackBerry OS only had 0.3% of market share in the second quarter of 2015. (Source: “Smartphone OS Market Share, 2015 Q2,” International Data Corporation, last accessed December 7, 2015.)
Such a small market share meant the company was caught in a vicious cycle: developers were reluctant to create apps for an OS with such a tiny market share and consumers were unwilling to use the company’s devices and OS because of the lack of apps. Finally, BlackBerry’s CEO John Chen decided to make a big change, introducing a phone that works on the latest Android OS instead.
BlackBerry Priv: BlackBerry’s First Android Smartphone
Last month, BlackBerry launched its first-ever Android smartphone, the BlackBerry Priv. It is a slider phone featuring a dual-curved, all-touch display and BlackBerry’s signature full QWERTY keyboard. The company has really thought it through this time: the device is an Android phone, comes with a physical keyboard in addition to a touchscreen, and also incorporates all of BlackBerry’s robust security features. So far, there have been many positive reviews of the device. However, it’s the sales figures that really matter; the company has yet to announce them.
Other than being moving to be more adaptive at its smartphone business, BlackBerry is also taking steps to boost its device management business. In September, the company announced that it would acquire its former rival Good Technology for $425 million in cash. Good Technology, which is based in California, has been a long-term rival for BlackBerry in the secure mobile communications business. It offers secure e-mail, applications, and communications services to corporations and governments.
Buying Good Technology would bring new clients to BlackBerry’s device management business. Since Good Technology has experience managing devices that run on Android, “Windows,” and iOS operating systems, the acquisition would also help BlackBerry provide stronger cross-platform capabilities.
Also in September, BlackBerry closed its acquisition of AtHoc for $250 million in cash. AtHoc was a leading provider of secure, networked crisis communications. Its platform can alert all kinds of devices to help organizations and people connect and share information in times of a crisis. The acquisition is crucial for BlackBerry’s “Internet of Things” (IoT) platform.
The Bottom Line on BBRY Stock
Moving forward, uncertainty remains for BlackBerry, as the company experiments with new products and services. Just like any trial and error process, not all projects are going to work out at the first attempt. This could also mean that the company won’t have a clear forecast of its financials and that worries investors. However, BlackBerry still has the potential to get it right and when that happens, BBRY’s stock price won’t be this cheap.